CHAPTER 163

DELAWARE RACING COMMISSION

AN ACT TO AMEND AN ACT ENTITLED "AN ACT TO PROVIDE FOR THE REGULATION, CONTROL AND LICENSING OF HORSE RACING IN THE STATE OF DELAWARE, TO CREATE A DELAWARE RACING COMMISSION, AND TO PRESCRIBE ITS POWERS AND DUTIES AND PROVIDING FOR SALARIES AND EXPENSES THEREFOR, AND TO PROVIDE FOR THE FEES TO BE CHARGED AND TAXES TO BE COLLECTED FOR THE CONDUCT OF HORSE RACING WITHIN THE STATE OF DELAWARE AND THE DISPOSITION THEREOF" BEING CHAPTER 62, VOLUME 38, LAWS OF DEL, AWARE, AS AMENDED.

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:

Section 1. That Section 15 of an Act entitled "An Act to provide for the Regulation, Control and Licensing of Horse Racing in the State of Delaware, to Create a Delaware Racing Commission, and to Prescribe Its Powers and Duties and Providing for Salaries and Expenses Therefor, and to Provide for the Fees to Be Charged and Taxes to Be Collected for the Conduct of Horse Racing Within the State of Delaware and the Disposition Thereof," as amended (being Sec. 5510 of the Revised Code of Delaware of 1935, as amended), be and it is hereby further amended by striking out all of said Section 15 of said Act, as amended, and inserting in lieu thereof the following:

Section 15. Within the enclosure of any horse race meeting licensed and conducted under this Act, but not elsewhere, the wagering or betting on horse races by the use of pari mutuel machines or totalizators is hereby authorized and permitted.

The Delaware Racing Commission shall have power in its discretion, to grant a license or licenses to any person, firm or corporation, to make, conduct and sell pools by the use of pari mutuel machines or totalizators, for the purpose of receiving wagers or bets on horse races within the enclosure of any race meeting licensed and conducted under this Act, but not otherwise, under such regulations as the Commission shall prescribe.

The Commission shall have power to prescribe regulations governing the granting of applications for licenses, the granting of licenses, and the conditions under which any licensee may conduct, sell, or make any such pool.

The qualifications of any licensee shall be such as to afford a reasonable belief that the licensee will be financially responsible and will conduct the business of operating said pools in a proper and orderly manner. A licensee to make, conduct and sell pools by the use of pari mutuel machines or totalizators, must be a person, association or corporation licensed to conduct a race meeting under this Act.

The Delaware Racing Commission shall have power to require the keeping of books and records by a licensee of a pari mutuel or totalizator pool in such form, or in such manner, as the Commission shall prescribe. The Commission shall also have the power to regulate the duties of any employee of any such licensee, and to visit, investigate, and to place expert accountants and such other persons as it may deem necessary in the office or place of business of any person, corporation or association licensed to operate a pari mutuel or totalizator pool for the purpose of satisfying itself that the Commission's rules and regulations are strictly complied with. The Commission shall also have power to issue, under the hand of its Chairman and the seal of the Commission, subpoenas for the attendance of witnesses and the production of books, papers and documents of a licensee, before the Commission, and to administer oath or affirmation to such witnesses whenever in the judgment of the said Commission it may be necessary for the effectual discharge of its duty. If any person shall refuse to obey any such subpoena, or to testify, or to produce any books, papers or documents, then any member of the Commission may apply to the Superior Court of the county in which he or the Commission may be sitting, and, thereupon, the said court shall issue

its subpoena requiring said person to appear and testify, or to produce such books, papers and documents before the Commission. Any person failing to obey or refusing to obey a subpoena of the said court shall be deemed guilty of contempt of court and shall be punished accordingly. False swearing on the part of any witness shall be deemed perjury and shall be punished as such.

All licenses for the operation of pari mutuel or totalizator pools shall be revocable at any time, without hearing, in the absolute discretion of the Delaware Racing Commission.

Every person, association or corporation engaged in the business of conducting a race meeting under this Act shall pay to the Delaware Racing Commission, for the use of the State of Delaware, a sum equal to three per cent (35) of the total contributions to all pari mutuel and totalizator pools conducted or made on any and every race track licensed under this Act, and on every race at such track.

The Delaware Racing Commission shall authorize commissions on pari mutuel or totalizator pools to the person, firm or corporation operating a race meeting, which said commissions shall be a sum equal to three per cent (3%) of the total contributions to all pari mutuel and totalizator pools conducted or made at said race meeting, and every race at said meeting, plus the odd cents of all redistributions to be made on all pari mutuel or totalizator pool contributions exceeding the sum equal to the next lowest multiple of five.

In addition to the commissions permitted to the person, firm or corporation operating a race meeting under the provisions of the preceding paragraph (hereinafter called the Licensee), the Commission shall authorize as further commissions to such Licensee the further sum of one and one-half per cent (11/25) of the total contributions to all pari mutuel or totalizator pools; provided, however, that in no event and at no track licensed under this Act shall the total of the commissions allowed to any licensee, plus the amount payable to the Delaware Racing Commission from such pools for the use of the State of Delaware, exceed seven and one-half per cent (71/2%) of the total contributions to all such pari mutuel or totalizator pools conducted or made at any track, plus the odd cents of all redistributions to be made on all pari mutuel or totalizator pool contributions exceeding the sum equal to the lowest multiple of five. The appropriation and use of the money constituting such further commission of one and one-half per cent (11/2%) of such total contributions to all pari mutuel or totalizator pools for the purposes of the retirement or redemption of any funded debt or shares of stock having a preference on dissolution, or both, incurred or issued by such licensee in financing the purchase of his or its lands and the construction of his or its buildings or equipment thereon, may occur at any time after said commission is earned; the appropriation and use of the money constituting such further commission of one and one-half per cent (11/2%) of such total contributions to all pari mutuel or totalizator pools for the other purposes hereinafter set forth shall be authorized by the Commission only after the closing of the racing season during which such pools were made or conducted, and only after the completion of an audit of the financial operations of the licensee. Said additional one and one-half per cent (11/2%) commission shall be used only for the following purposes:

All of the said additional one and one-half per cent (11/2%) commission shall, after the deduction of all taxes assessable thereon, be applied exclusively to the retirement or redemption of any funded debt or shares of stock having a preference on dissolution, or both ,incurred or issued by such licensee in financing the purchase of his or its lands and the construction of his or its buildings or equipment thereon, until the total amount of such funded debt and shares of stock so retired or redeemed hereunder shall equal twenty-five per cent (25%) of the sum equal to the total redemption price of such funded debt, plus the total redemption price of all such shares of stock, or, if such shares shall not be redeemable, then the total dissolution value of such shares; thereafter three-fourths of the said one and one-half per cent (11/2%) additibnal commission shall be so applied until the total of all such retirements and redemptions shall equal fifty per cent (50%) of such
sum equal to the total redemption price of such funded debt, plus the total redemption price of such shares of stock; thereafter one-half of the said one and one-half per cent (11/2%) commission shall be so applied until the total retirements and redemptions shall equal seventy-five per cent (75%) of such sum equal to the total redemption price of such funded debt, plus the total redemption price of such shares of stock; thereafter one-fourth of said one and one-half per cent (11/2%) commission shall be so applied until all of such funded debt and such shares of stock have been retired or redeemed. Any portion of the said one and one-half per cent (11/2%) commission not required herein to be applied to the redemptibn of such funded debt and shares of stock may, in the discretion of the licensee, be used for further retirement or redemption of such funded debt and shares of stock, or, if not so used, shall be applied first to any operating deficits of the current or preceding fiscal years, and, second, to any improvements in the racing plant required by the Delaware Racing Commission; and thereafter shall be applied to any one or more of the following purposes, without order of preference, viz.:

Any other improvements to the racing plant; suitable monetary rewards for the breeders of winning horses at the said racing plant; stakes or purses for races at said racing plant; or a suitable reserve fund for any of the above five purposes in this section set forth.

Approved February 20, 1939.