CHAPTER 242 - 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 OF VOLUME 38 LAWS OF DELAWARE AS AMENDED, BEING CHAPTER 163 OF THE REVISED CODE OF DELAWARE OF 1935 AS AMENDED.

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

Section 1. That 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 Delaware, as amended (said Act being Chapter 163 of the Revised Code of Delaware of 1935 as amended), be and it is hereby further amended by striking out all of Sections 10, 11 and 15 of said Act, as amended (being respectively Sections 5505, 5506 and 5510 of said Revised Code, as amended), and inserting in lieu thereof the following new sections to be known as Sections 10, 11 and 15, respectively:

SECTION 10. Racing under this Act shall be limited to animals of the equine species. No racing under this Act shall be held between the hours of sundown and sunrise, nor shall a license be issued by the Commission for flat racing on a track less than one mile in circumference. No steeple chase race shall be run in the infield of a track less than one mile in circumference.

Every license issued under this Act shall contain a condition that all running races or race meetings conducted thereunder shall be subject to the reasonable rules and regulations, from time to time prescribed by the Jockey' Club, a corporation organized under the laws of the State of New York, and that all steeple chase races, or steeple chases shall be subject to the reasonable rules and regulations from time to time prescribed by the National Steeple Chase and Hunt Association, a corporation organized under the laws of the State of New York. Any rule or regulation of such Jockey Club or National Steeple Chase and Hunt Association may be modified or abrogated by the said Racing Commission, upon giving such Jockey Club or National Steeple Chase and Hunt Association an opportunity to be heard.

Said Commission may make rules governing, restricting or regulating the rate or charge by a licensee for admission, or for the performance of any service, or the sale of any article on the premises of such licensee.

No race shall be authorized or permitted for a purse, stake or reward of less than Seven Hundred Dollars ($700.00) (plate value, if any, shall be considered as a part of the purse, stake or reward) except in the event of a split race, in which case the purse, stake or reward shall be equally divided.

No salary, fee or compensation exceeding the sum of Two Thousand Dollars ($2,000.00) shall be paid in any calendar year by any person or persons, association or corporation licensed as hereinbefore provided, except to officials or employees actively engaged in the operations incident to the holding of the race meeting or in the maintenance of the racing plant.

All proposed extensions, additions or improvements to the buildings, stables, improvements on tracks or property, owned or leased by the licensee under this Act, shall be subject to the approval of the Commission. Said Commission shall have power to compel the production of any and all books, memoranda, or documents showing the receipts and disbursements of any corporation, person or persons, or association licensed under the provisions of this Act to conduct racing meets. The Commission may at any time require the removal of any employee or official employed by any licensee hereunder. The Commission shall also have the power to require that the books and financial or other statements of any person, corporation or association, licensed under the provisions of this Act, shall be kept in any manner which to the Commission may seem best, and the Commission shall also be authorized to visit, to investigate, and to place expert accountants and such other persons as it may deem necessary, in the offices, tracks, or places of business of any such person, corporation or association, for the purpose of satisfying itself that the Commission's rules and regulations are strictly complied with, and the salaries and expenses of such expert accountants or other persons shall be paid by the person, corporation, or association to whom they are assigned. The said Commission shall have the authority 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, 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 their duties. If any person shall refuse to obey any such subpoena, or to testify, or to produce any books, papers and 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 such person to appear and to testify, or to produce such books, papers and documents. 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.

Section 11. Every person or persons, association or corporation licensed to hold racing meets within the State of Delaware as hereinabove provided shall pay to the Commission a tax of twenty cents (20c) on each admission on each day of any such meet, excepting admissions of persons performing any duty or work in connection with the holding of the meet. The licensee may if it desires collect such amount from each ticket holder in addition to the amount or amounts charged for such ticket of admission. Accurate records and books shall at all times be kept and maintained by the licensee showing the number of admissions, employees of the licensee excepted, on each racing day of each horse racing meet. The Commission, or its duly authorized representative or representatives, shall at all reasonable times have access to the admission records of any licensee for the purpose of examining and checking the same, and ascertaining whether or not the proper amount has been, or is being, paid the State of Delaware as herein provided. The Commission may also, from time to time, require sworn statements of the number or numbers of such paid admissions and prescribe blanks upon which such reports shall be made.

Every person or persons, association or corporation, licensed to hold racing meets within the State of Delaware, as herein-before provided, shall on or before the first day of December of each year return to the Commission a full statement, under oath, of their receipts from all sources whatsoever during the calendar year, and of all expenses and disbursements, all itemized in the manner and form as shall be directed by the Commission, and with such allowances as may be approved by the Commission showing the net revenue from all sources derived by such person or persons, association or corporation, engaged in or conducting horse racing. The cost of any alterations, additions, changes or improvements made or proposed upon the property owned or leased by any such person and used by it for the convenience and comfort of the public and of the horse owners with the approval of the Commission shall be deducted as running expenses in such statements.

The Commission shall allow a licensee to reserve from the earnings after provision for the taxes and charges provided by the statutes of the State of Delaware for the use of the State, a reasonable annual depreciation on the buildings and equipment used in the holding of racing meets within the State of Delaware which sum so allowed as depreciation may be used by the licensee in the retirement of his or its funded debt and/or preference stock. From any net revenue resulting after the payment of the taxes and charges provided by the statutes of the State of Delaware for the use of the State, and after the deductions for operating expenses and depreciation charges and the payment of Federal taxes, if any, the Commission shall allow a licensee a sum not to exceed 4% of the capital investment of the licensee in his or its track, grandstand and equipment employed in holding racing meets as return on said investment. All net revenue of the licensee remaining shall be set aside and employed by the licensee for working capital, for the retirement of outstanding debt and/or preference stock, for the maintenance and development of purses, stakes and rewards, and for the maintenance and improvement of the tracks and buildings of the licensee.

Any licensee failing or refusing to pay the amount found to be due by the Commission as the tax on admissions shall be guilty of a misdemeanor and upon conviction thereof shall be liable to a fine of not more than Twenty-five Thousand Dollars ($25,000.00) in addition to the amount clue the Commission. All fines up to the amount found to be due the Commission and paid into Court by a licensee found guilty of violating this Section, shall be transmitted and paid over by the Clerk of the Court to the Commission.

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 and one-half per cent (31/4 %) 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, such odd cents to be calculated upon the basis of each dollar wagered.

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 (11/4 %) of the total contributions to all pari-mutuel or totalizator pools. The appropriation and use of the money constituting such further commission of one and one-half per cent (1% ) 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 (11A %) 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 (11/4% ) additional 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 redemption 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.

In addition to the commissions permitted to the Licensee under the provisions of the foregoing paragraphs of this section (amounting in all to four and one-half per cent (41/2 % ) of such total contributions to the said pari mutuel or totalizator pools), the Licensee shall have the right to retain further commissions of not exceeding two per cent (2% ) of such total contributions to the said pari mutuel or totalizator pools, or in its discretion any part of such additional two per cent (2%), and to use such further commissions of two per cent (2% ) or part thereof for any lawful corporate purpose.

For the purpose of making any of the calculations of amounts payable to the State of Delaware and to the Licensee under this Section, no Federal taxes, if any, shall be deducted from the amount of total contributions before applying the percentages specified in this section.

Approved February 13, 1941.