TITLE 71 INDIANA HORSE RACING COMMISSION

Amends 71 IAC 3-2-9 regarding the judge's list. Amends 71 IAC 3.5-2-9 regarding the steward's list. Amends 71 IAC 8-3-5 regarding out of competition testing. Amends 71 IAC 8-4-1 regarding sample collection procedures. Amends 71 IAC 8-11-2 regarding a licensee subject to testing and positive sample results. Adds 71 IAC 8.5-1-2.1 regarding clenbuterol being prohibited in quarter horses. Amends 71 IAC 8.5-2-5 regarding out of competition testing. Amends 71 IAC 8.5-3-1 regarding sample collection procedures. Adds 71 IAC 8.5-8-1.5 regarding the veterinarian's list for a quarter horse clenbuterol positive. Adds 71 IAC 9-2.1 regarding advance deposit wagering definitions. Adds 71 IAC 9-2.2 regarding advance deposit wagering. Amends 71 IAC 9-2.5-1 regarding wagering rules. Amends 71 IAC 11-1-12 regarding contracts with a permit holder and approval by the commission or executive director. Effective August 29, 2018.

SECTION 1. 71 IAC 3-2-9 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31

Sec. 9. (a) The judges shall maintain a judge's list of the horses that are ineligible to be entered in a race because of poor or inconsistent performance or behavior on the race track that may endanger the health and safety of the participants and for the protection of the wagering public. The reasons for a horse to be placed on the judge's list and ordered to qualify shall include, but not be limited to, the following on a fast or good track:

(b) Any horse on the veterinarian's list shall also be considered to be on the judge's list and ineligible to race until removed.

(c) Any horse that has tested positive for a foreign substance in violation of these rules that has not been cleared by the official veterinarian or judges shall be considered to be on the judge's list and ineligible to race until removed.

(b) (d) Horses racing at all county fair race tracks that return to pari-mutuel race tracks to compete must have a clean charted line in qualifying time within thirty (30) days or they must requalify. Time allowances for half-mile tracks shall be set by the race secretary at the pari-mutuel track, except as indicated in the conditions of the Indiana sires stakes.

(c) (e) Horses that are on the judge's list or are not eligible to compete due to the qualifying standards at the Indiana pari-mutuel race track may be allowed to compete in "paid in events" if they have a clean line in qualifying time in the last thirty (30) days (race date to race date) unless declared ineligible under subsection (f) (h) or (g). (i).

(d) (f) The judges may place a horse on the judge's list when there exists a question as to the exact identification, ownership, or trainer of a horse.

(e) (g) A horse may not be released from the judge's list without permission of the judges.

(f) (h) Qualifying standards shall not be waived for non-Indiana late closers, Indiana sire stakes finals, late closer finals, and all "paid in events" if there exists a compromise with the health and safety of the participants in those races.

(g) (i) Horses that are placed on the vet's or judge's list as sick, lame, or injured for a specified number of days, which includes the race date or are required to qualify before racing by the vet or starter, shall not be eligible to race under subsection (c). (e).

SECTION 2. 71 IAC 3.5-2-9 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31

Sec. 9. (a) The stewards shall maintain a steward's list of the horses that are ineligible to be entered in a race because of poor or inconsistent performance or behavior on the race track that may endanger the health and safety of other participants in racing.

(b) Any horse on the veterinarian's list shall also be considered to be on the steward's list and ineligible to race until removed.

(c) Any horse that has tested positive for a foreign substance in violation of these rules that has not been cleared by the official veterinarian or stewards shall be considered to be on the steward's list and ineligible to race until removed.

(b) (d) The stewards may place a horse on the steward's list when there exists a question as to the exact identification, ownership, or trainer of said horse.

(c) (e) A horse that has been the subject of a finding by a commission-approved laboratory that the antibody of erythropoietin or darbepoietin was present in the sample taken from the horse shall be placed on the steward's list. Such horse shall not be released from the steward's list unless and until it has tested negative by a commission-approved laboratory for the antibodies of erythropoietin or darbepoietin.

(d) (f) A horse may not be released from the steward's list without permission of the stewards.

SECTION 3. 71 IAC 8-3-5 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31-12

Sec. 5. (a) Any horse eligible to race in Indiana under this subsection is subject to testing without advance notice for prohibited substances, practices, and procedures as specified in subsection (f), while the horse is located on the grounds of a racetrack under the jurisdiction of the commission, or stabled off association grounds while under the care or control of trainer or owner licensed by the commission under the restrictions listed in subsection (e). A horse is eligible to race in Indiana if it is listed:

(b) If a horse to be tested is not covered under subsection (a), the executive director or judges may nevertheless test any such horse as eligible to race in Indiana for prohibited substances, practices, and procedures specified in subsection (f), unless the owner or trainer or other authorized representative or designee of such horse immediately represents in writing that the horse is not intended to be, and will not be, raced in Indiana for a minimum of three hundred sixty-five (365) days. If the owner, trainer, or other authorized representative or designee so represents, the horse shall be deemed ineligible for racing in Indiana for no less than three hundred sixty-five (365) days from that date. This three hundred sixty-five (365) day ineligibility to race in Indiana shall follow the horse even if sold or transferred to another owner or trainer. An owner or trainer may, however, consent to the collection of a sample from a horse selected for testing under this rule, even if the horse is not presently intended to be raced in Indiana, and if such horse tests negative, it will remain eligible to race in Indiana.

(c) The executive director or judges may order any horse of a licensed trainer to report to a track under the jurisdiction of the commission for out of competition testing. The trainer is responsible to have the horse or horses available at the designated time and location. In the event that a horse is ordered to report to a track pursuant to the authority granted by this subsection, a licensed trainer is entitled to reimbursement by the commission for mileage (at the current rate paid by the state of Indiana as specified in the current Indiana financial management circular) to and from the location where the horse was stabled when the horse was ordered to report to the track. Under no circumstances will a trainer be entitled to reimbursement for mileage in excess of the actual mileage to the track from the place where the horse was stabled when ordered to report and from the track to the place where the horse is first stabled following the testing. The trainer is not entitled to receive reimbursement from the commission for any other expense relating to any order under this subsection to report to a track for out of competition testing.

(d) The official veterinarian, a licensed veterinarian authorized by the commission, a veterinary technician under the direct supervision of the official veterinarian, or a licensed veterinarian authorized by the commission may take a urine, blood, or hair sample from a horse for testing as provided for in this section.

(e) Unless sample collection occurs on the grounds of a racetrack or other location within Indiana under the commission's jurisdiction, the commission's representatives must arrive for the taking of blood, urine, or hair samples from an eligible horse as defined in subsections subsection (a) or (b), only between the hours of 7:00 a.m. and noon, after announcing their presence at the premises where the horse(s) to be tested is (are) located and showing their credentials to collect samples from the horse(s) selected for testing for prohibited substances, practices, and procedures as specified in subsection (f). The commission's representatives or designees will request to meet with the trainer or owner of the selected horse(s). If neither is available, the collection will be deferred until the trainer and/or owner, or their representative or designee, becomes reasonably available, but the collection must occur not later than one (1) hour after the commission's designee arrives at the premises in the case of an eligible horse under subsection (a), and not later than two (2) hours in the case of an eligible horse under subsection (b). If the collection does not occur within the time provided for in this subsection, any horse that would have been subject to testing and eligible to race in Indiana will be deemed to be ineligible for racing in Indiana pursuant to the provisions of subsections (a) and (b). In addition, the owner and/or trainer of the horses may be subject to any other sanctions allowed by Indiana law and regulations, including, but not limited to, a fine, suspension, and/or summary suspension. It is a defense to any action brought against an owner and/or trainer for sanctions or as a result of any declaration a horse is ineligible because the sample collection did not occur within the time provided for by this subsection that good cause existed that prohibited the owner, trainer, and/or their representative or designee from complying with the time limits set forth in this subsection. The owner, trainer, and/or their representative or designee has the burden of proving the good cause defense by a preponderance of the evidence.

(f) Prohibited substances, practices, and procedures are defined as the following:

(g) The trainer and/or his/her designees shall cooperate with the official veterinarian or any licensed veterinarian or licensed veterinary technician authorized by the commission or any commission employee by:

(h) The collection of blood or urine or hair samples under this rule shall be collected as provided by 71 IAC 8-4-1 and shall be divided in three (3) parts to be analyzed as follows:

(i) The collection of hair samples under this rule shall be collected as provided by 71 IAC 8-4-1 and shall be analyzed as follows:

(i) (j) In the absence of extraordinary mitigating circumstances, a minimum penalty of a ten (10) year suspension will be assessed for any violation of subsection (f)(1) and (f)(2). of this rule. The Association of Racing Commissioners International, Inc. Uniform Classification Guidelines for Foreign Substances and Recommended Penalties and Model Rule will be considered for violations of (f)(3), (f)(4), and (f)(5) [subsection (f)(3), (f)(4), and (f)(5)] of this rule with additional penalties for any drug not FDA approved for use in horses.

SECTION 4. 71 IAC 8-4-1 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31-12

Sec. 1. (a) All collection procedures shall be done in accordance with chain of custody guidelines.

(b) Before sending an equine sample to the primary testing laboratory, the official veterinarian or a designated commission employee shall divide the specimen into two (2) parts provided a sufficient amount is collected.

(c) The official veterinarian or designated commission employee shall attempt to collect a minimum of fifty (50) milliliters of urine. A urine specimen shall not be split if less than fifty (50) milliliters is collected from the horse. In such instances, the commission is entitled to submit the entire urine specimen for testing or detain the horse an adequate amount of time until it can be obtained. If an insufficient volume of urine is obtained, the trainer and owner are not entitled to a split sample.

(d) The official veterinarian, a licensed veterinarian authorized by the commission, or a veterinary technician under the direct supervision of a commission authorized veterinarian shall collect a minimum of thirty (30) milliliters of blood, which shall be divided into two (2) portions, one (1) of which shall be forwarded to the primary laboratory.

(e) The official veterinarian, a licensed veterinarian authorized by the commission, or a veterinary technician under the direct supervision of a commission authorized veterinarian designated commission employee shall collect a minimum of a hair sample that is at least the same size in diameter as a standard pencil. A hair sample shall be ineligible for split sample testing.

(f) If the split sample testing laboratory determines that there is insufficient sample volume to make a specific identification of the sample contents, or if an act of God, power failure, accident, labor strike, or any other event beyond the control of the commission or its representatives prevents the split sample from being tested, then the results of tests performed by the primary laboratory shall be considered prima facie evidence of the condition of the horse.

(g) The official veterinarian or his/her designee shall retain the part of the urine specimen and/or the part of the blood specimen that is not sent to the primary laboratory.

(h) If the retained part of a specimen is sent for testing, the official veterinarian or designated commission employee shall arrange for the transportation of the specimen in a manner that ensures the integrity of the sample.

(i) Blood samples shall be centrifuged.

(j) The provisions of subsections (b), (c), and (d) do not apply to 71 IAC 8-3-5.

SECTION 5. 71 IAC 8-11-2 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31-8-4

Sec. 2. A permit holder shall provide an alcohol breath testing device that is approved by the commission and operated by a person certified to use such a device. All drivers, judges, starters, the paddock judge, horse identifier, photo finish technician, test barn veterinarian, racing veterinarian, outriders, and drivers of starting gates shall submit to a breath test prior to the beginning of their duties at each program in which they participate. Any licensee on the track surface during training hours or any licensee scheduled to drive in a qualifying race is subject to testing at the discretion of the judges. In addition, the racing secretary, the judges, the commission director of security, or the track chief of security may order a licensee to submit to a breath test at any time there is reason to believe the licensee may have consumed sufficient alcohol to cause the licensee to fail a breath test. A positive test result as defined by 71 IAC 8.5-11-1(b) section 1(b) of this rule shall be prima facie evidence that there has been a violation of 71 IAC 8.5-11-1. of [sic] section 1 of this rule. In the event of such positive test, it is presumed that:

SECTION 6. 71 IAC 8.5-1-2.1 IS ADDED TO READ AS FOLLOWS:

Affected: IC 4-31-12

Sec. 2.1. (a) No quarter horse participating in a race shall carry in its body clenbuterol in excess of the threshold provided in section 4.2(5) of this rule. A finding by the chemist or commission designee that clenbuterol in excess of the threshold is present in the test sample shall be prima facie evidence that clenbuterol was administered and carried in the body of the horse while participating in a race. Such a finding shall also be taken as prima facie evidence that the trainer and his or her agents responsible for the care or custody of the horse have been negligent in the handling or care of the horse.

(b) Upon a finding of a violation of this section, whether by pre-race testing or post-race testing, the owners or lessees of the horse from which the specimen was obtained shall forfeit any purse money and any trophy or award. If the purse money, trophy, or award is associated with a qualifying race, a positive test for clenbuterol shall render the horse ineligible for any subsequent related race.

(c) In the event a sample from a quarter horse results in clenbuterol in excess of the threshold, the quarter horse shall be placed on the veterinarian's list as provided in 71 IAC 8.5-8-1.5.

SECTION 7. 71 IAC 8.5-2-5 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31-12

Sec. 5. (a) Any horse eligible to race in Indiana under this subsection is subject to testing without advance notice for prohibited substances, practices, and procedures as specified in subsection (f), while the horse is located on the grounds of a racetrack under the jurisdiction of the commission, or stabled off association grounds while under the care or control of a trainer or owner licensed by the commission under the restrictions listed in subsection (e). A horse is eligible to race in Indiana if it is listed:

(b) If a horse selected to be tested is not covered under subsection (a), the executive director or stewards may nevertheless test any such horse as eligible to race in Indiana for prohibited substances, practices, and procedures specified in subsection (f), unless the owner or trainer or other authorized representative or designee of such horse immediately represents in writing that the horse is not intended to be, and will not be, raced in Indiana for a minimum of three hundred sixty-five (365) days. If the owner, trainer, or other authorized representative or designee so represents, the horse shall be deemed ineligible for racing in Indiana for no less than three hundred sixty-five (365) days from that date. This three hundred sixty-five (365) day ineligibility to race in Indiana shall follow the horse even if sold or transferred to another owner or trainer. An owner or trainer may, however, consent to the collection of a sample from a horse selected for testing under this rule, even if the horse is not presently intended to be raced in Indiana, and if such horse tests negative, it will remain eligible to race in Indiana.

(c) The executive director or stewards may order any horse of a licensed trainer to report to a track under the jurisdiction of the commission for out of competition testing. The trainer is responsible to have the horse or horses available at the designated time and location. In the event that a horse is ordered to report to a track pursuant to the authority granted by this subsection, a licensed trainer is entitled to reimbursement by the commission for mileage (at the current rate paid by the state of Indiana as specified in the current Indiana financial management circular) to and from the location where the horse was stabled when the horse was ordered to report to the track. Under no circumstances will a trainer be entitled to reimbursement for mileage in excess of the actual mileage to the track from the place where the horse was stabled when ordered to report and from the track to the place where the horse is first stabled following the testing. The trainer is not entitled to receive reimbursement from the commission for any other expense relating to any order under this subsection to report to a track for out of competition testing.

(d) The official veterinarian, a licensed veterinarian authorized by the commission or a veterinary technician under the direct supervision of the official veterinarian, or a licensed veterinarian authorized by the commission may take a urine, blood, or hair sample from a horse for testing as provided for in this section.

(e) Unless sample collection occurs on the grounds of a racetrack or other location within Indiana under the commission's jurisdiction, the commission's representatives must arrive for the taking of blood, urine, or hair samples from an eligible horse as defined in subsections subsection (a) or (b), only between the hours of 7:00 a.m. and noon, after announcing their presence at the premises where the horse(s) to be tested is (are) located and showing their credentials to collect samples from the horse(s) selected for testing for prohibited substances, practices, and procedures as specified in subsection (f). The commission's representatives or designees will request to meet with the trainer or owner of the selected horse(s). If neither is available, the collection will be deferred until the trainer and/or owner, or their representative or designee, becomes reasonably available, but the collection must occur not later than one (1) hour after the commission's designee arrives at the premises in the case of an eligible horse under subsection (a), and not later than two (2) hours in the case of an eligible horse under subsection (b). If the collection does not occur within the time provided for in this subsection, any horse that would have been subject to testing and eligible to race in Indiana will be deemed to be ineligible for racing in Indiana pursuant to the provisions of subsections (a) and (b). In addition, the owner and/or trainer of the horses may be subject to any other sanctions allowed by Indiana law and regulations, including, but not limited to, a fine, suspension, and/or summary suspension. It is a defense to any action brought against an owner and/or trainer for sanctions or as a result of any declaration a horse is ineligible because the sample collection did not occur within the time provided for by this subsection that good cause existed that prohibited the owner, trainer, and/or their representative or designee from complying with the time limits set forth in this subsection. The owner, trainer, and/or their representative or designee has the burden of proving the good cause defense by a preponderance of the evidence.

(f) Prohibited substances, practices, and procedures are defined as the following:

(g) The trainer and/or his/her designees shall cooperate with the official veterinarian, or any licensed veterinarian or licensed veterinary technician authorized by the commission, or any commission employee by:

(h) The collection of blood or urine or hair samples under this rule shall be collected as provided by 71 IAC 8.5-3-1 and shall be divided in three (3) parts to be analyzed as follows:

(i) The collection of hair samples under this rule shall be collected as provided by 71 IAC 8.5-3-1 and shall be analyzed as follows:

(i) (j) In the absence of extraordinary mitigating circumstances, a minimum penalty of a ten (10) year suspension will be assessed for any violation of subsection (f)(1) and (f)(2). of this rule. The Association of Racing Commissioners International, Inc. Uniform Classification Guidelines for Foreign Substances and Recommended Penalties and Model Rule will be considered for violations of (f)(3), (f)(4), and (f)(5) [subsection (f)(3), (f)(4), and (f)(5)] of this rule with additional penalties for any drug not FDA approved for use in horses.

SECTION 8. 71 IAC 8.5-3-1 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31-12

Sec. 1. (a) All collection procedures shall be done in accordance with chain of custody guidelines.

(b) Before sending an equine sample to the primary testing laboratory, the official veterinarian or a designated commission employee shall divide the specimen into two (2) parts provided a sufficient amount is collected.

(c) The official veterinarian or a designated commission employee shall attempt to collect a minimum of fifty (50) milliliters of urine. A urine specimen shall not be split if less than fifty (50) milliliters is collected from the horse. In such instances, the commission is entitled to submit the entire urine specimen for testing or detain the horse an adequate amount of time until it can be obtained. If an insufficient volume of urine is obtained, the trainer and owner are not entitled to a split sample.

(d) The official veterinarian, a licensed veterinarian authorized by the commission, or a veterinary technician under the direct supervision of a commission authorized veterinarian shall collect a minimum of thirty (30) milliliters of blood, which shall be divided into two (2) portions, one (1) of which shall be forwarded to the primary laboratory.

(e) The official veterinarian, a licensed veterinarian authorized by the commission, or a veterinary technician under the direct supervision of a commission authorized veterinarian designated commission employee shall collect a minimum of a hair sample that is at least the same size in diameter as a standard pencil. A hair sample shall be ineligible for split sample testing.

(f) If the split sample testing laboratory determines that there is insufficient sample volume to make a specific identification of the sample contents, or if an act of God, power failure, accident, labor strike, or any other event beyond the control of the commission or its representatives prevents the split sample from being tested, then the results of tests performed by the primary laboratory shall be considered prima facie evidence of the condition of the horse.

(g) The official veterinarian or his/her designee shall retain the part of the urine and/or blood specimen that is not sent to the primary laboratory.

(h) If the retained part of a specimen is sent for testing, the official veterinarian or designated commission employee shall arrange for the transportation of the specimen in a manner that ensures the integrity of the sample.

(i) Blood samples shall be centrifuged.

(j) The provisions of subsections (b), (c), and (d) do not apply to 71 IAC 8.5-2-5.

SECTION 9. 71 IAC 8.5-8-1.5 IS ADDED TO READ AS FOLLOWS:

Affected: IC 4-31

Sec. 1.5. (a) The official veterinarian shall maintain a list of all quarter horses with clenbuterol in excess of the threshold provided in 71 IAC 8.5-1-4.2(5).

(b) A quarter horse shall not be removed from the veterinarian's list until a biological sample of hair tested by a commission approved laboratory determines clenbuterol is not in excess of the threshold limit provided in 71 IAC 8.5-1-4.2(5).

(c) Hair samples shall be collected as provided in 71 IAC 8.5-3-1 for collection procedures or 71 IAC 8.5-2-5 for out of competition testing.

(d) The trainer or owner requesting hair sample testing shall pay all costs.

(e) The trainer or owner requesting hair sample testing shall make full payment prior to hair sample collection.

(f) The quarter horse may be removed from the veterinarian's list once a commission approved laboratory determines clenbuterol in hair is below the threshold limit provided in 71 IAC 8.5-1-4.2(5).

(g) If the hair test results determine a quarter horse is above the threshold limit, the trainer or owner may request another hair sample test in accordance with this section at a later date.

SECTION 10. 71 IAC 9-2.1 IS ADDED TO READ AS FOLLOWS:

NOTE: Agency cited as Rule 2, which was renumbered by the Publisher as Rule 2.1.

Affected: IC 4-31

Sec. 1. The definitions in this rule apply through this article.

Affected: IC 4-31-7.5-2

Sec. 2. "Account holder" means an Indiana resident who has established an advance deposit wagering account.

Affected: IC 4-31-7.5-3

Sec. 3. "Advance deposit wagering" means a system of pari-mutuel wagering in which wagers of account holder are debited and payouts are credited to an account established by the account holder, regardless of whether the wagers are made in person, by telephone, or through communication by other electronic means.

Affected: IC 4-31-7.5-4

Sec. 4. "Advance deposit wagering account" means an account for advance deposit wagering held by a licensed SPMO.

Affected: IC 4-31

Sec. 5. "Advance deposit wagering terms and agreement" refers to a plan by an SPMO, subject to commission approval, detailing how a licensed SPMO will operate an advance deposit account wagering system in Indiana.

Affected: IC 4-31-7.5-5; IC 35-45-5-1

Sec. 6. "Communication by other electronic means" means communication by any electronic communication device, including any of the following:

Affected: IC 4-31

Sec. 7. As used in this article, "confidential information" includes the following:

Affected: IC 4-31-7.5-6

Sec. 8. "Licensed SPMO" means a secondary pari-mutuel organization licensed under this article.

Affected: IC 4-31-7.5-18

Sec. 9. "Net source market fee" means the difference between:

Affected: IC 4-31-7.5-7

Sec. 10. "Secondary pari-mutuel organization" or "SPMO" means an entity that offers advance deposit wagering.

Affected: IC 4-31-7.5-8; IC 4-31-7.5-10

Sec. 11. "Source market fee" means the amount of an advance deposit wager made on any race:

SECTION 11. 71 IAC 9-2.2 IS ADDED TO READ AS FOLLOWS:

NOTE: Agency cited as Rule 2.1, which was renumbered by the Publisher as Rule 2.2.

Affected: IC 4-31-7.5-1

Sec. 1. (a) Advance deposit wagering is permitted in Indiana, subject to IC 4-31-7.5 and this article.

(b) These rules have been enacted to:

Affected: IC 4-31-7.5-15

Sec. 2. (a) The commission may issue to a secondary pari-mutuel organization a license to offer advance deposit wagering to Indiana residents if the commission:

(b) The term of a license issued under this article is one (1) year.

(c) The annual license renewal fee is one thousand dollars ($1,000).

Affected: IC 4-31-7.5-13; IC 4-31-7.5-14

Sec. 3. (a) A secondary pari-mutuel organization applying for a license under this article must submit a complete application on a form prescribed by the commission that contains the following information:

(b) The commission may retain professional services, conduct investigations, or request additional information from the applicant for a license as it deems appropriate in determining whether to grant a license to an SPMO.

(c) The commission may require an applicant to pay any costs incurred by the commission for background checks, investigation, and professional fees related to the review and/or consideration of the license application that exceed five thousand dollars ($5,000).

Affected: IC 4-31-7.5

Sec. 4. (a) The commission may issue a license under IC 4-31-7.5 if the commission determines that the applicant meets all of the requirements under IC 4-31-7.5 and this article and, that on the basis of all the facts before it, the following is shown:

(b) In reviewing an application, the commission may consider any information, data, reports, findings, factors, or indices available which it considers important or relevant to its determination of whether an applicant is qualified to hold an SPMO license under IC 4-31-7.5, including, without limitation, the following:

(c) The commission may grant or deny an SPMO license subject to conditions specified by the commission and agreed to by the applicant.

(d) The commission may require changes in the proposed plan of operations and/or advance deposit wagering terms and agreement as a condition of granting a license. A licensed SPMO shall not make subsequent material changes in the plan of operations and/or advance deposit wagering terms and agreement unless ordered by the commission or until approved by the commission after receiving a written request.

(e) A licensed SPMO shall file a license renewal request for the upcoming calendar year by Nov. 1 of the preceding year. The license renewal request must be accompanied by a cashier's check or certified check payable to the commission in the amount of one thousand dollars ($1,000) as a nonrefundable annual license fee. In addition, the licensed SPMO must submit a letter detailing any requested changes in the commission approved plan of operations and/or advance deposit wagering terms and agreement.

(f) A license issued under this article is neither transferable nor assignable, including by operation of law, without the prior written consent of the commission.

(g) Any action that suspends or otherwise prohibits a licensed SPMO from operating in another state may be used as grounds for a suspension of its Indiana SPMO license.

(h) All employees working on behalf of a licensed SPMO that are officers, directors, managers and/or involved in Indiana advance deposit wagering must hold an Indiana commission license.

Affected: IC 4-31-7.5

Sec. 5. (a) A licensed SPMO shall provide a bond or irrevocable letter of credit in an amount set by the commission for the purpose of ensuring that payments to the commission and to Indiana account holders are made. In the alternative, a licensed SPMO may provide other means of assurance of such payment including, but not limited to, evidence of bond(s), irrevocable letter(s) of credit, or other forms of financial guarantees posted and in good standing with regulatory authorities in other jurisdictions, which shall be subject to the approval of the commission. Any bond, letter of credit, or other assurance of payment acceptable to the commission provided by the licensed SPMO shall run to the Indiana horse racing commission as obligee, and shall be for the benefit of the commission and any account holder who suffers a loss by reason of the licensed SPMO's violation of IC 4-31-7.5 or this rule.

(b) In determining the amount of the bond, the commission shall consider the monthly payments due to the commission pursuant to section 6 of this rule and the projected total value of all balances in Indiana advance deposit wagering accounts held by the licensed SPMO. The bond shall be the greater of fifty thousand dollars ($50,000) or the full projected value of all balances in Indiana advance deposit wagering accounts plus the amount due to the permit holder and the commission in a monthly period pursuant to section 6 of this rule.

(c) The bond, letter of credit, or other assurance of payment shall be conditioned on the obligor as licensee faithfully complying with IC 4-31-7.5 and this article. The bond shall be continuous and may be canceled by the surety only upon the surety giving written notice to the executive director of its intent to cancel the bond. The notice of cancellation shall be effective no sooner than thirty (30) days after the notice is received by the executive director. In the event of cancellation of the bond, letter of credit, or other assurance of payment the licensed SPMO shall file a new bond, letter of credit, or other assurance of payment prior to the effective date of the cancellation notice.

Affected: IC 4-31-7.5-10

Sec. 6. (a) A licensed SPMO may accept advance deposit wagers for races conducted within or outside Indiana. Advance deposit wagers made under this chapter are considered to have been made in Indiana.

(b) A licensed SPMO must have a single written contract signed by each permit holder. The contract must be approved by the commission. The contract must:

Affected: IC 4-31-7.5-18

Sec. 7. (a) Each permit holder shall not later than the end of each month pay to the commission as an advance deposit wagering fee an amount equal to sixty percent (60%) of the net source market fee received from a licensed SPMO during the preceding month.

(b) The commission shall use twenty-five percent (25%) of the revenue received from advance deposit wagering fees under subsection (a) to promote horse racing at the state fair and county fairs.

(c) The commission shall use seventy-five percent (75%) of the revenue received to promote and encourage Indiana horse owner and horse trainer participation at a permit holder's horse racing facility as follows:

Affected: IC 4-31

Sec. 8. (a) An established advance deposit wagering account is necessary to place advance deposit wagers. An account may only be established with a licensed SPMO.

(b) An advance deposit wagering account shall be established in person at a racetrack or off track betting facility licensed by the commission before any wagering shall be conducted. An advance deposit wagering account shall only be established in the name of a natural person and is nontransferable.

(c) Any person prohibited from wagering under commission rules shall be prohibited from establishing an advance deposit wagering account or placing a wager.

(d) To establish an advance deposit wagering account, an application form must be signed or otherwise authorized in a manner acceptable to the commission and include:

(e) Each account shall have a unique identifying account number. The identifying account number may be changed at any time by the licensed SPMO provided the account holder is given notice in writing fifteen (15) days prior to the change.

(f) The account holder shall receive at the time the account is approved:

(g) The principal residential address provided in writing by the account holder at the time of application or as updated in subsection (j) is deemed to be the proper address for the purposes of mailing checks, statements of account, account withdrawals, notices, or other appropriate correspondence. The mailing of checks or other correspondence to the address given by the account holder shall be at the sole risk of the account holder.

(h) The licensed SPMO may close or refuse to open an account for what it deems good and sufficient reason and shall order an account closed if it is determined that information that was used to open an account was false, or that the account has been used in violation of these rules.

(i) Any disputes between an account holder and a licensed SPMO shall follow the dispute resolution procedures contained in the licensed SPMO's terms of agreement as approved by the commission. If the licensed SPMO fails to resolve the dispute, the commission may take appropriate action including claims against the bond or other form of financial security.

(j) An account holder must update any changes to the account holder's contact information, including, but not limited to, the account holder's permanent address and e-mail address. All updates must be made in writing (on a form provided by the licensed SPMO) or online, and must be submitted to the SPMO within thirty (30) days of the change.

Affected: IC 4-31-7.5-12

Sec. 9. (a) A licensed SPMO shall verify each application submitted for an advance deposit wagering account with respect to name, principal residence address, and date of birth by either an independent service provider or another means which meets or exceeds the reliability, security, accuracy, privacy, and timeliness provided by an independent service provider. If there is a discrepancy between the application submitted and the information provided by the verification described above or if no information on the applicant is available from such verification process, another individual reference service may be accessed or another technology meeting the requirements described above may be used to verify the information provided. If the applicant's information cannot be verified, the licensed SPMO shall not establish an account.

(b) A licensed SPMO shall allow the commission or its designee access to its premises to visit, investigate, and place expert accountants and other persons it deems necessary for the purpose of ensuring that its enabling statutes, its rules, and the advance deposit wagering terms of agreement are strictly complied with.

(c) A licensed SPMO that accept wagers shall upon request of the commission provide a full accounting and verification of the source of the wagers, and a detailed wagering information file that includes, but is not limited to, dollar amount wagered, pool on which the wager was placed, race number and racing venue, zone, breed, zip code of the account holder, time wagering stopped, and time of the wager in the form of a daily mutuel data download to the commission's designated database.

(d) A licensed SPMO shall give access to the commission, or its designee, for review and audit of all records as set forth in section 11 of this rule.

(e) A licensed SPMO shall record by means of the appropriate electronic media all wagering transactions or other wagering communications through the account wagering system, and the records of such communications shall be kept by the account wagering center for at least a period of one (1) year. These records shall be made available to commissioners, employees, and designees of the commission upon request.

(f) No employee or agent of a licensed SPMO shall divulge any confidential information related to the placing of any wager or to the operation of the licensed SPMO, except to the account holder as required by these rules, the commission, and as otherwise required by state or federal law.

(g) A licensed SPMO shall make available to all account holders contact information for a recognized problem-gambling support organization.

(h) A licensed SPMO shall not disseminate, or cause to disseminate, advance deposit wagering advertising that it determines to be deceptive to the public. A licensed SPMO shall state in all advertising in the state of Indiana that residents under the age of twenty-one (21) are not permitted to open, own, or have access to an advance deposit wagering account.

(i) If the licensed SPMO is located in Indiana, no account shall be established for any natural person under the age of twenty-one (21).

(j) Each manager, employee, or agent of a licensed SPMO has a duty to comply with the rules of the commission at all times and acknowledge that the rules are a condition under which the permits are granted.

(k) A licensed SPMO shall comply with all applicable federal laws including, but not limited to, Internal Revenue Service (IRS) requirements for reporting and withholding proceeds from advance deposit wagers by account holders and shall send to account holders subject to IRS reporting or withholding a Form W2-G summarizing the information for tax purposes following a winning wager being deposited into an account. Upon written request, the licensed SPMO shall provide account holders with summarized tax information on advance deposit wagering activities.

Affected: IC 4-31

Sec. 10. (a) Each account holder's advance deposit wagering account shall be administered in accordance with the advanced wagering deposit terms of agreement submitted by the licensed SPMO and approved by the commission, including, but not limited to:

(b) Credits to an account after the initial establishment of the account may be made as follows:

(c) Debits to an account shall be made as follows:

(d) A licensed SPMO may close accounts for violation of its terms of agreement or other appropriate reasons approved by the commission's executive director.

(e) A licensed SPMO may close accounts in which there has been no activity for at least six (6) months, returning funds remaining therein to the account holder at his/her last known principal residential address.

(f) In the event an account holder is deceased, funds accrued in the account shall be released to the decedent's legal representative upon receipt of a copy of a valid death certificate, tax releases or waivers, probate court authorizations, or other documents required by applicable laws.

(g) The licensed SPMO shall not accept wagers from an account holder in an amount in excess of the account balance.

(h) Checks, money orders, and other negotiable instruments shall be posted to the credit of the account holder in accordance with financial institution funds availability schedules.

(i) Monies deposited with the licensed SPMO for account wagering shall not bear any interest to the account holder.

(j) Notwithstanding any other rules, a licensed SPMO may at any time declare account wagering closed for receiving wagers on any pari-mutuel pool, race, group of races, racetrack or closed for all wagering. Anytime account wagering is closed during normal wagering hours by the licensed SPMO a written report must be filed with the commission within forty-eight (48) hours.

(k) A licensed SPMO has the right at any time and for what it deems good and sufficient reason to refuse to accept all or part of any wager.

(l) Except where the licensed SPMO or its employees or agents act without good faith or fail to exercise ordinary care, the licensed SPMO shall not be responsible for any loss arising from the use by any other person or persons of an account holder's account. The account holder must immediately notify the licensed SPMO of a breach of the account's security.

(m) Payment on winning pari-mutuel wagers and credits for account wagers on entries which are scratched shall be posted to the credit of the account holder as soon as practicable after the race is declared official.

Affected: IC 4-31-7.5-16

Sec. 11. (a) A licensed SPMO shall be prepared to fully account, consistent with generally accepted accounting principles (GAAP) to the commission or its designee at any time for all receipts, disbursements, and balances of any monies paid and received pursuant to IC 4-31-7.5. In connection therewith, the licensed SPMO shall be responsible for the following:

(b) A licensed SPMO shall provide to the commission or its designee full access to its records for review and audit.

(c) A licensed SPMO must file with the commission an annual financial statement audited by an independent certified public accountant no later than March 31st after the close of the calendar year.

(d) A licensed SMPO must file with its renewal application to the commission an unaudited balance sheet and profit and loss statement.

(e) A licensed SPMO must file with the commission any tax audit report received from the IRS, department of state revenue, or other federal or state agency auditing the SPMO.

(f) A licensed SPMO shall create standard operating procedures regarding all wagering monies received and distributed, including, but not limited to, a description of its:

(g) The commission may require period audits of wagering accounts by an independent certified accountant.

Affected: IC 4-31-7.5; IC 4-31-13

Sec. 12. (a) Any violations of this chapter may result in disciplinary action as outlined in IC 4-31-13 and 71 IAC.

(b) The commission or its designee may suspend or revoke a license issued to an SPMO, withdraw approval of a contract between a permit holder and a licensed SPMO, impose fines and/or impose civil penalties, if the licensed SPMO:

Affected: IC 4-31-7.5-16

Sec. 13. A secondary pari-mutuel organization that is not licensed under this chapter [sic] may not accept a wager from an individual whose physical location is within Indiana at the time the wager is made.

Affected: IC 4-31-7.5-19

Sec. 14. (a) A permit holder has a right of action against a secondary pari-mutuel organization that accepts a wager in violation of section 7 of this article [sic].

(b) If the permit holder prevails in an action filed under this section, the permit holder is entitled to the following:

(c) A secondary pari-mutuel organization that accepts a wager in violation of section 7 of this article [sic] submits to the jurisdiction of Indiana courts for purposes of this article.

SECTION 12. 71 IAC 9-2.5-1 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31

Sec. 1. (a) Wagering on credit is prohibited.

(b) All pari-mutuel tickets must be paid for in full at the time the ticket is issued from the totalizator system with:

(c) Account wagering, other than a commission-approved totalizator voucher system or mobile wagering, that approved by the commission, is prohibited.

(d) Licensees shall not make a wager based upon instructions received by telephone, facsimile, or similar device.

(e) In the event that the mutuel machine fails to lock at the commencement of a race, no licensee shall knowingly issue any tickets from his or her terminal or any other terminal. Nor shall any licensee assist any individual in procuring such tickets. Any failure to lock on time shall be immediately reported to the mutuel manager or the satellite facility manager and the commission.

SECTION 13. 71 IAC 11-1-12 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 4-31-5; IC 4-31-6-1; IC 4-35

Sec. 12. (a) The following contracts must be approved by the commission or the executive director:

(b) "Related party" means:

(c) The commission, an agent of the commission, or the executive director may review, at any time prior to execution or thereafter, a contract or transaction entered into by a permit holder or permit applicant upon demand.

(d) Commission authority to review contracts as provided in subsection (c) shall not be limited by the provisions listed in subsection (a). The commission shall have discretion to review any contract or transaction that may impact the horse racing industry in Indiana.

(c) (e) Any contract required to be approved by the commission or the executive director shall be submitted to for approval within seven (7) days of the execution of the contract. The commission or the executive director may refuse to approve a contract in subsection (a) if it is determined that the contract is not in the best interest of horse racing and pari-mutuel wagering.

(f) A contract or transaction entered into by a permit holder or permit applicant that has not been submitted to the commission or executive director for approval as provided for in subsection (d) [redesignated subsection (e) by the Publisher] shall contain a provision indicating that the commission may subsequently disapprove of the contract.

(d) (g) A contract or transaction entered into by a permit holder that exceeds the total dollar amount of fifty thousand dollars ($50,000) shall be a written contract.

(e) The commission reserves the right to terminate any contract executed by a permit holder that is not in compliance with IC 4-31, IC 4-35, or this title.

(h) The commission is required to maintain the integrity of the commission and the horse racing industry and act in the best interest of the state of Indiana. In consideration of the aforementioned goals, when entering contracts or transactions, permit holders and permit applicants shall:

(i) The commission is not undertaking the policy of approving contracts, but will maintain oversight over contracts and transactions entered into by permit holders and permit applicants. The commission reserves the right to disapprove of and terminate a contract that does not:

DIN: 20180905-IR-071180370ERA

Composed: May 02,2024 7:26:54AM EDT

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