CHAPTER 446

FORMERLY

HOUSE BILL NO. 628

AS AMENDED BY HOUSE AMENDMENT NO. 1

AN ACT TO AMEND TITLES 3, 2B AND 29 OF THE DELAWARE CODE AND THE LAWS OF DELAWARE RELATING TO THE ESTABLISHMENT OF VIDEO LOTTERIES AT RACETRACKS, THE ADMINISTRATION OF SUCH LOTTERIES, AND HORSE RACING AND HARNESS RACING.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. This Act shall be known as the "Horse Racing Redevelopment

Act."

Section 2. Amend §4801, Chapter 4B, Title 29, Delaware Code by

designating all of said section as subsection (a) of said §4801 and by adding new subsection (b) as follows:

"(b) In authorizing a video lottery, it is the further purpose of the

General Assembly to (1) provide non-state supported assistance in the form of increased economic activity and vitality for Delaware's harness and thoroughbred horse racing industries, which activity and vitality will enable the industry to improve its facilities

and breeding stock, and cause increased employment, and (2) restrict the location of such lottery to locations where wagering is already permitted and controls exist."

Section 3. Amend §4803, Chapter 48, Title 29, Delaware Code, by adding thereto new subsections (f) and (g) to read as follows:

"(f) 'Video lottery' shall mean any lottery conducted with a video

lottery machine or a network of linked video lottery machines with an aggregate progression prize or prizes.

(g) 'Video lottery machine' shall mean any machine in which bills, coins

or tokens are deposited in order to play in a game of chance in which the results, including options available to the player, are randomly and immediately determined by the machine. A machine may use spinning reels or video displays or both, and may or may not dispense coins or tokens directly to winning players. A machine shall be considered a video lottery machine notwithstanding the use of an electronic credit system making the deposit of bills, coins or tokens unnecessary."

Section 4. Amend §4805(a), Chapter 4B, Title 29, Delaware Code, by

inserting the words and the players of video lottery machines," in the second sentence thereof after the first use of "winning tickets," and before the word "including".

Section 5. Amend §4805(a)(10), Chapter 4B, Title 29, Delaware Code, by

inserting the word "ticket" between the words "licensed" and "sales agents".

Section 6. Amend §4805(a)(11), Chapter 4B, Title 29, Delaware Code, by

deleting the words "and from all other sources".

Section 7. Amend §4805(a)(12), Chapter 4B, Title 29, Delaware Code, by

deleting the period at the end thereof and by substituting the words "and the players of video lottery machines.".

Section 8. Amend §4805(a), Chapter 4B, Title 29, Delaware Code, by adding thereto new paragraphs (13) through (23) to read as follows:

"(13) Value of bills, coins or tokens needed to play video lottery machines;

(14) Licensing of agents for video lotteries;

(15) Payout from video lottery machines, provided that such payouts shall not be less than 87% on an average annual basis, and further provided that video lottery agents may return a payout greater than 877. but not greater than 957. upon 10 days written notice to the Director, and further provided that video lottery agents may, with the approval of the Lottery Director, return a greater payout percentage than 95%;

(16) A licensure requirement and enforcement procedure (taking no more than 90 days to complete, unless extenuating circumstances require a longer period, in which

case the Director and the State shall act with all deliberate speed to complete the process) for officers, directors, key employees and persons who own directly or indirectly 107. or more of such agent, which licensure requirement shall include the satisfaction of such security, fitness and background standards as the Director may deem necessary relating to competence, honesty and integrity, such that a person's reputation, habits and associations do not pose a threat to the public interest of the State or to the reputation of or effective regulation and control of the video lottery; it being specifically understood that any person convicted of any felony, a crime involving gambling, or a crime of moral turpitude within ten (10) years prior to applying for a license hereunder or at any time thereafter shall be deemed unfit. The Delaware State Police shall conduct the security, fitness and background checks required under this rule or regulation;

(1) A licensure requirement and enforcement procedure (taking no more than 90 days to complete, unless extenuating circumstances require a longer period, in which case the Director and the State shall act with all deliberate speed to complete the process) for those persons or entities including video lottery manufacturers who propose to contract with a video lottery agent or the State for the provision of goods or services including management services, which licensure requirements shall include the satisfaction of such security, fitness and background standards of officers, directors, key employees, and persons who own, directly or indirectly, ten percent or more of such entity, as the Director may deem necessary relating to competence,
honesty and integrity, such that a person's reputation, habits and
associations do not pose a threat to the public interest of the State or to the reputation of or effective regulation and control of the video lottery; it being specifically understood that any person convicted of any felony, a crime involving gambling, or a crime of moral turpitude within ten (10) years prior to applying for a license hereunder or at any time thereafter shall be deemed unfit. The Director may determine whether the licensing standards of another state are comprehensive, thorough, and provide similar adequate safeguards and, if so, may, in his discretion, license an applicant already licensed in such state without the necessity of a full application and background check. The Delaware State Police shall conduct the security, fitness and background checks required under this rule or regulation;

(1) Standards for advertising, marketing and promotional materials used by video lottery agents;

(1) Regulations and procedures for the accounting and reporting of the payments required under §4815(b) hereof, including the calculations required for payments under §4815(b)(3)b.

(1) The registration, kind, type, number and location of video lottery machines on the licensee's premises, subject to the Director's obligations set forth in §4820(b).

(1) The on-site security arrangements for the video lottery machines.

(1) Requiring the reporting of information about the video lottery agent, its employees, vendors and finances necessary or- desirable to ensure the security of the video lottery system. None of the information disclosed pursuant to this subsection shall be subject to disclosure under the Freedom of Information Act, 29 Del.C. §§10001-10005.

(1) The reporting and auditing of financial information of licensees including, but not limited to, the reporting of profits or losses incurred by licensees and the reporting by licensees of such employment and payroll information as is necessary for the Director to determine compliance with §10148(1) of Title 3 or §100048 of Title 3 of this Code as the case may be. None of the information disclosed pursuant to this subsection shall be subject to disclosure under the Freedom of Information Act, 29 Del.C, §§10001-10005."

Section 9. All regulations and licensure requirements called for or

required by this Act shall be promulgated by December 31, 1994, unless extenuating circumstances require a longer period.

Section 10. Amend §4805(b)(2), Chapter 48 inserting the words "and generated by the machines", after the words "lottery tickets" and, Title 29, Delaware Code, by operation of video lottery before the word "appoint".

Section 11. Amend §4805(b), Chapter 48, Title 29, Delaware Code, by

adding a new subsection (13) to read as follows:

"(13) License as video lottery agents each person, corporation or association which, in 1993, held either a horse racing meet pursuant to Title 3 or Title 28 of this Code or a harness horse racing meet pursuant to Title 3 of this Code and who satisfies such fitness and background standards as the Director may promulgate pursuant to section 4805 (a)(16) of this subchapter. In the event that there shall have been or shall be a change of ownership or such person, corporation or association after the close of the 1993 racing meet then the issuance by the Director of a license to serve as a video lottery agent shall be conditioned upon the Director's determination that such person, corporation or association shall have met the requirements of section 4806(a)(1)-(4) and (b) hereof and satisfies such fitness and background standards as the Director may promulgate pursuant to section 4805 (a)(16) of this subchapter. Change of ownership occurring after the Director has issued a license shall automatically terminate the license 90 days thereafter unless the Director has determined after application to issue a license to the new owner(s) because the new owner(s) have met the requirements of §4806(a)(1)-(4) and (b) hereof and satisfied such fitness and background standards as the Director may promulgate pursuant to §4805(a)(16) of this subchapter. Any license granted pursuant to this subsection is a privilege personal to the video lottery agent and is not a legal right. A license granted or renewed pursuant to this subsection may not be transferred or assigned to another person, nor may a license be pledged as collateral. For purposes of this
subsection, 'a change of ownership' shall have occurred if more than twenty percent of the legal or beneficial interests in such person, corporation or association shall be transferred, whether by direct or indirect means."

Section 12: Amend §4805(b), Title 29, Del. C., by adding a new subsection (14) thereto to read as follows:

"(14) Whenever he deems necessary, examine all accounts, bank accounts, financial statements and records of the licensee in a licensee's possession or under its control in which it has an interest and the licensee must authorize all third parties, including parents, subsidiaries or related entities, in possession or control of the accounts or records of the licensee to allow examination of any of those accounts or records by the Director. None of the information disclosed pursuant to this subsection shall be subject to disclosure under the Freedom of Information Act, 29 Del, C. §§10001-10005."

Section 13. Amend §4805, Chapter 48, Title 29, by adding a new Subsection (c) to read as follows:

"(c) Licenses granted pursuant to subsection (b)(13) above shall be for a period of five years in duration. The license may be revoked or suspended for cause at any time upon 30 days written notice to the licensee. "Cause" shall by way of example and not by limitation include, falsifying any application for license or report required by the rules and regulations, the failure to report any information required by the rules and regulations, the material violation of any rules and regulations promulgated by the Director, or any conduct by the licensee which undermines the public confidence in the video lottery system or serves the interest of organized gambling or crime and criminals in any manner. A license may be revoked for an unintentional violation of any federal, state or local law, rule or regulation provided that the violation is not cured within a reasonable time as determined by the Director; or a longer period where the video lottery agent has made diligent efforts to cure. The Secretary of Finance shall within a reasonable time, if requested, appoint a hearing officer to hold a hearing to determine whether the license should be revoked or suspended. The hearing officer's decision revoking or suspending the license shall be appealable to the Superior Court under the provisions of the Administrative Procedures Act. Any decision of the Director relating to the business plan or the number of video lottery machines to be awarded to licensees under §4820(b) shall be appealable under the Administrative Procedures Act in the manner of a case decision. At least one hundred and eighty days prior to the expiration of a license, the licensed agent may apply for renewal of such license. A license renewal application shall be acted upon within 100 days, and the failure to grant or deny such renewal within 100 days shall be deemed a renewal. Notwithstanding the foregoing, nothing in this subsection (c) shall otherwise prohibit the termination or revocation of a license in accordance with the rules and regulations adopted hereunder."

Section 14. Amend §4807, Chapter 48, Title 29, Delaware Code, by adding the words or a video lottery agent as the case may be at the end of §4807.

Section 15. Amend §4810(a), Chapter 48, Title 29, Delaware Code, by

substituting a semi-colon for the period at the end thereof, and by thereafter adding the words "nor shall any person under the age of 21 years be permitted to play a video lottery machine."

Section 16. Amend §4815, Chapter 48, Title 29, Delaware Code, by

designating all of said section as subsection (a) of said §4815 and by adding a new subsection (b) as follows:

"(b) All proceeds, net of proceeds returned to players pursuant to

paragraph 1 of this subsection, from the operation of a video lottery shall be electronically transferred daily into the State Lottery Fund and shall be applied as follows:

(1) Proceeds Returned to Players. A portion of such proceeds, but not less than 87% of the total proceeds on an average annual basis received from the operation of a video lottery, shall be retained by and returned to the players under rules prescribed by the Director. Proceeds returned to players in excess of the payout authorized pursuant to Section 4805(a)(15) of this subchapter shall be the sole responsibility of the video lottery agent and the State Lottery's proceeds shall not be reduced on account of such excess payment.

(2) Proceeds Returned To The State. Of amounts remaining after all payments to players under paragraph (1) of this subsection, there shall be returned to the State:

(i) 12.5% of the average daily win (the amount remaining after all payments to players) not exceeding $25,000;

(i) 157. of the average daily win exceeding $25,000 but not in excess of $50,000;

(i) 20% of average daily win exceeding $50,000 but not in excess of $75,000; and

(i) 30% of average daily win in excess of $75,000.

The funds retained by the State Lottery shall be applied as follows: first, to the administrative costs and expenses in respect of the video lottery including, but not limited to, administrative expenses including payroll and other employment costs attributable to the operation of the video lottery by the State Lottery Office, law enforcement and security expenses, including payroll and other employment costs of the State Lottery, the Office of the Attorney General and the Delaware State Police, attributable to the operation by the State Lottery of a video lottery; second, $100,000 or 1%, whichever is greater, of the proceeds distributed under (b)(2)(1)-(iv) of this section, to the Division of Alcoholism, Drug Abuse and Mental Health of the Department of Health & Social Services for funding programs for the treatment, education and assistance of compulsive gamblers and their families; and, third, the remainder shall be paid into the State's General Fund.

(3) Application of Remaining Proceeds. The proceeds remaining after payments as set forth in paragraphs (1) and (2) above shall be applied as follows:

a. Reimbursements to State. There shall be deducted from the video lottery agent an amount necessary to reimburse the State for all costs of equipment (both video lottery machines and related equipment), whether leased or owned by the State, used or under the control of such agent and for a proportionate share of the cost of the central computer used to monitor the equipment used by the agent. The payments or reimbursements made by a video lottery agent hereunder shall be solely for the cost to the State of such equipment, and the State shall not be entitled to receive any markup or additional payments or reimbursements for equipment beyond such cost.

b. Purses.

(i) For video lottery agents licensed only to conduct horse racing meets under Chapter 101 of Title 3 or Chapter 4 of Title 28, such agents shall be paid and shall pay additional purses (and related administrative expenses of the horsemen's association) to be applied under the direction of the Delaware Thoroughbred Racing Commission, for races conducted at such agent's racetrack in accordance with 3 Del, C, §10148 or 28 Del. C. §427 as appropriate, in an amount calculated as follows: 107. of the proceeds remaining after payments made under subsection (b)(1) above.

(ii) For video lottery agents licensed only to conduct harness racing

meets under Chapter 100 of Title 3, such agents shall be paid and shall pay additional purses (and related administrative expenses of the horsemen's association) to be applied under the direction of the Delaware Harness Racing Commission to purses for races conducted at such agent's racetrack in accordance with 3 Del. C §10048, in an amount calculated as follows:

1. Where the average daily win (the amount remaining after all payments to players) for the preceding calendar year is less than or equal to $25,000 per day, the agent shall pay an amount equal to 10% of the proceeds remaining after payments made under subsections (b)(1), (b)(2), and (b)(3)a. above.

2. Where the average daily win for the preceding calendar year is greater than $25,000 and less than or equal to $50,000, the agent shall pay 107. of the first $25,000 in proceeds remaining after payments made under subsections (b)(1), (b)(2) and (b)(3)a. above, and 20% of such remaining proceeds in excess of $25,000.

3. Where the average daily win for the preceding calendar year is greater than $50,000, the agent shall pay 207. of the proceeds remaining after payments made under subsections (b)(1), (b)(2), and (b)(3)a. above. During the first
year of operation, the additional purses will be based upon the average daily win for the then current year.

(iii) For video lottery agents licensed to conduct harness horse racing meets under Chapter 100 of Title 3 on January 1, 1993, such agents, which In the future also conduct horse racing meets under Chapter 101 of Title 3 or Chapter 4 of Title 28, shall be paid and shall pay additional purses (and related administrative expenses of the horsemen's association) administered by either the Delaware Thoroughbred Racing Commission or the Delaware Harness Racing Commission, as appropriate, in accordance with the formula set forth in subsection (ii) above, for races conducted at such agent's racetrack based on the ratio of live horse racing days to total live racing days and live harness horse racing days to total live racing days.

(iv) For video lottery agents licensed to conduct horse racing meets

under Chapter 101 of Title 3 on January 1, 1993, such agents, which in the future also conduct harness horse racing meets under Chapter 100 of Title 3, shall be paid and shall pay additional purses (and related administrative expenses of the horsemen's association) administered by either the Delaware Thoroughbred Racing Commission or the Delaware Harness Racing Commission, as appropriate, In accordance with the formula set forth in subsection (i) above, for races conducted at such agent's racetrack based on the ratio of live horse racing days to total live racing days and live harness racing days to total live racing days.

c. Commissions To Agents. The portion of such proceeds remaining after

the payments required by paragraphs a. and b. above shall be paid to such video lottery agent as commission, provided, however, that no such commissions shall be paid after three years from the date the first customer plays the video lottery. It is the intent of the General Assembly and the Governor that before that date legislation be enacted to establish an appropriate and equitable distribution of the proceeds of the video lottery so as to ensure that the State's General Fund receives an appropriate share of the proceeds of the video lottery, and further that video lottery agents are expected to provide the financial information necessary to enable the Genera} Assembly and the Governor to make such a determination based on a full and adequate factual record."

Section 17. Amend Subchapter II of Chapter 48, Title 29, Delaware Code, by renumbering the provisions of Subchapter II from §§4820-4825 to §§4830-4835.

Section 18. Amend Chapter 48, Title 29, Delaware Code, by adding thereto a new §4819 to read as follows:

"§4819. Restrictions on location and use of video lottery machines.

(a) Video lottery machines shall only be located within the confines of an existing racetrack property in this State on which was conducted in 1993 either a horse racing meet pursuant to Title 3 or Title 28 of this Code or a harness horse racing meet pursuant to Title 3 of this Code; and provided further, that video lottery machines shall not be located in a hotel, motel or other overnight sleeping facility.

(a) In respect of any pari-mutuel harness racing or pari-mutuel horse
racing property the racing operations on which were lawful under any county or municipal zoning ordinance as of January 1, 1993, the use of video lottery machines on such property pursuant to the provisions of this Act shall not be deemed to change the character of such lawful land use and such use of video lottery machines shall not be prohibited by any such county or municipal zoning ordinance, including amendments thereto.

(b) Video lottery machines shall be connected to the Lottery's central computer system, and shall not be available for play on Christmas, Easter or between the hours of 2:00 a.m. and 1:00 p.m. on Sundays, or between the hours of 2:00 a.m. and 8:00 a.m. on all other days."

Section 19. Amend Chapter 48, Title 29, Delaware Code, by adding thereto a new §4820 to read as follows:

"§4820. Rights and obligations of Director and video lottery agent

relating to video lottery machines.

(a) All video lottery machines shall be owned or leased by the State and shall be obtained from manufacturers licensed under §4805(a)(17). All video lottery machines shall be leased or purchased under the procedures set forth in Section 6922, Title 29 of this Code. Any video lottery agent must file with the Director a copy of any current or proposed agreement or disclose any other relationship between the agent, its parents, subsidiaries, related entities, directors, officers or key employees for the sale, lease, maintenance, repair or other assignment to the agent's facility of video lottery machines,- or any other relationship with any vendor, manufacturer or other party which stands to benefit financially from the possession or use of video lottery machines by such agent. Failure to file such information shall constitute grounds for the revocation or suspension of a license.

(b) Upon submission by a video lottery agent of a proposed plan for the purchase or lease of video lottery machines In accordance with procedures to be established by the Director, the Lottery Director shall lease or purchase the number, type, and kind of video lottery machines necessary for the efficient and economical operation of the Lottery, or convenience of the players and in accordance with the plan of the licensee, provided that no more than 500 video lottery machines shall be located within the confines of a racetrack property unless the Director approves up to an additional 500 for each racetrack property, and further provided that the Director may amend such plan where he finds that such amendments are necessary to increase revenues from the video lottery, protect the public welfare or ensure the security of the video lottery.

(a) Each video lottery agent shall be responsible for the security and
safekeeping of the video lottery machines of which it has physical custody.

(a) The Director shall contract with an Independent laboratory to test video lottery machines and related equipment on a periodic basis to ensure that the machines and equipment comply with the requirements of this chapter and any other applicable standards and regulations. The manufacturer, vendor

or lessor of such machines and equipment shall pay all costs associated with such testing.

(e) Each video lottery agent shall hold the Director and this State
harmless from and defend and pay for the defense of any and all claims which may be asserted against the Director, the State or the employees thereof, arising from the participation in the video lottery system; specifically excluding, however, any claims arising from the negligence or willful misconduct of the Director, the State or the employees thereof.

(a) Each video lottery agent shall provide access to all records of the licensee and the physical premises of the business or businesses where the video lottery agent's video lottery activities occur for the purpose of monitoring or inspecting the video lottery agent's activities and the video lottery games, video lottery terminals and associated equipment. None of the information disclosed pursuant to this subsection shall be subject to disclosure under the Freedom of Information Act, 29 Del. C. §§10001-10005."

Section 20. Amend Chapter 101, Title 3, Delaware Code, by adding thereto a new §10148 to read as follows:

"§10148. Restrictions on licensee acting as video lottery agent.

During any calendar year in which a licensee under this chapter has also been licensed by the Director of the State Lottery Office to maintain video lottery machines within the confines of a racetrack licensed under this chapter, the following rules shall apply:

(1) As to each racetrack so licensed by the Director of the State Lottery Office, the licensee shall conduct live racing operations on at least 100 days. Each licensee shall also employ during the live racing operations a
minimum of 100 additional employees than the average daily number employed during the most recent racing meet held prior to the enactment of this Act. The licensee's continued failure to substantially comply with this requirement after notice from the Director shall constitute grounds for revocation or suspension of the video lottery agent's license.

(1) An amount determined pursuant to §4815(b)(3) of Title 29 of the
Delaware Code shall be added to the purses for the races to be held at the licensee's racetrack. The allocation of said sums among the races to be held at the licensee's racetrack shall be in accordance with contracts currently in force with the Horsemen's Association recognized for the purposes related to the allocation of purses, provided that all such sums shall have been allocated no later than the end of the calendar year immediately following the calendar year of receipt of said sums by the licensee."

Section 21. Amend Chapter 4, Title 28, Delaware Code, by adding thereto a new §427 to read as follows:

"§427. Restrictions on licensee acting as video lottery agent.

During any calendar year in which a license under this chapter has also been licensed by the Director of the State Lottery Office to maintain video lottery machines within the confines of a racetrack licensed under this chapter an amount calculated pursuant to §4815(b)(3) of Title 29 of the Delaware Code shall be added to the purses for the races to be held at the licensee's racetrack. The allocation of said sums among the races to be held at the licensee's racetrack shall be In accordance with contracts currently in force, or with the Horsemen's Association recognized for purposes related to the allocation of purses, if applicable; provided that all of such sums shall have been allocated no later than the end of the calendar year immediately following the calendar year of receipt of said sums by the licensee."

Section 22. Amend Chapter 100, Title 3, Delaware Code, by adding thereto a new §10048 to read as follows:

"§l0048. Restrictions on licensee acting as video lottery agent.

During any calendar year in which a licensee under this chapter has also been licensed by the Director of the State Lottery Office to maintain video lottery machines within the confines of a racetrack licensed under this chapter, the following rules shall apply:

(1) As to each racetrack so licensed by the Director of the State Lottery Office, the licensee shall conduct live racing operations on at least 901. of the number of days such live racing operations were awarded for and conducted in 1992 in accordance with section 10023(c) of this chapter, or in the event there is only one licensee under this Chapter the licensee shall conduct 60 days of live racing operations, unless the Commission shall award less than said number of days or the supply of horses is insufficient to support racing on such number of days. Each licensee shall also employ during the live
racing operations a minimum of 50 additional employees than the average daily number employed during the most recent racing meet held prior to the enactment of this Act. The licensee's continued failure to substantially comply with
this requirement after notice from the Director shall be grounds for revocation or suspension of the video lottery agent's license.

(2) An amount calculated pursuant to §4815(b)(3) of Title 29 of the Delaware Code shall be added to the purses for the races to be held at the licensee's racetrack. The allocation of said sums among the races to be held at the licensee's racetrack shall be in accordance with contracts currently in force with the Horsemen's Association recognized for purposes related to the allocation of purses, if applicable; provided that all such sums shall have been allocated no later than the end of the calendar year immediately following the calendar year of receipt of said sums by the licensee."

Section 23. Amend Subchapter I, Chapter 100, Title 3 of the Delaware Code by adding the following language to the end of section 10023(c):

"In addition, the Commission may award additional dates, beyond any limits prescribed elsewhere, for racing days limited exclusively to the receiving and accepting of wagers or bets on electronically televised simulcasts of harness horse races."

Section 24. Amend Subchapter II, Chapter 101, Title 3 of the Delaware Code by striking the period at the end of the second sentence of §10122(c) thereof, and adding the following language to said sentence:

"; provided, however, that the Commission may award additional dates, beyond any limits prescribed elsewhere, for racing days limited exclusively to the receiving and accepting of wagers or bets on electronically televised simulcasts of horse races."

Section 25. Amend Subchapter III, Chapter 101, Title 3 of the Delaware Code, by deleting §10142 thereof in its entirety.

Section 26. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to that end the provisions of this Act are declared to be severable.

Section 27. Amend Chapter 48, Title 29, Delaware Code, by adding thereto a new §4821 to read as follows:

"§4821, Decision To Forego Video Lottery.

Any person, corporation or association licensed under Chapter 100 of Title 3 to conduct a harness horse racing meet during 1993 which conducted live harness horse races on 30 days or less during 1993 may forego the opportunity to become a video lottery agent under Chapter 48 of Title 29. Any such person, corporation or association electing to forego such opportunity shall notify the Director and all other video lottery agents of such decision, and so long as such person, corporation or association conducts live harness horse races on at least 90% of the same number of racing days as were conducted by such person, corporation or association in 1992, and so long as such person, corporation or association maintains and awards an average purse per race which is not less than the average purse per race offered by such person, corporation or association during 1992, then such person, corporation or association shall receive an annual payment of $100,000 from all video lottery agents licensed under Chapter 101 of Title 3 and $75,000 from all video lottery agents licensed under Chapter 100 of Title 3 or Chapter 4 of Title 28, such payment to be made on an annual basis commencing six months after the first customer plays the video lottery and shall continue so long as the video

lottery is in operation. Video lottery agents licensed under more than one chapter of Title 28 and Title 3 shall only make one payment as set forth in the preceding sentence. An election to forego the opportunity to become a video lottery agent shall be effective for one year from the date of such election, after which time the licensee making the election may apply for licensure to become a video lottery agent, or may elect to forego such opportunity for an additional one year."

Section 28. Amend Chapter 48, Title 29, Delaware Code, by adding thereto a new Section 4822 to read as follows:

14822. Annual Crime Report.

The State Lottery Office, with the assistance of the Attorney General's Office and the State Bureau of Identification, shall annually provide to the General Assembly a report detailing the crimes that occur within the communities surrounding each racetrack property."

Section 29. Amend Chapter 48, Title 29, Delaware Code, by adding a new section 4823 to read as follows:

14823. The Horse Racing Redevelopment Act shall terminate and shall be of no further force and effect on or after five years from March 15, 1995, unless by action of the General Assembly taken before four years from March 15, 1995, the legislation is extended or reenacted."

Section 30. 1.0 Appropriated Special Fund position shall be established

in Legal (15-00-00), Office of Attorney General (15-01-00), Office of Attorney General (15-01-01). The position shall be a Deputy Attorney General assigned to the State Lottery Office to assist the Lottery Director in the administration of this Act. The Lottery Director shall transfer monies to the Office of Attorney General to cover the costs associated with the position from special funds authorized under Section 4815, Chapter 48, Title 29, Delaware Code.

Section 31. 2.0 Appropriated Special Fund positions shall be established in the Department of Finance (25-00-00), State Lottery Office (25-07-00), State Lottery Office (25-07-01). The positions shall be an operations manager and an accountant to administer the provisions of this Act. The positions shall be funded from special funds authorized under Section 4815, Chapter 48, Title 29, Delaware Code.

Section 32. The Lottery Director shall reimburse the Delaware State

Police for the contractual costs associated with the performance of security, fitness and background checks required under regulations promulgated by the Lottery Director. The monies to reimburse the Delaware State Police shall be funded from special funds authorized under Section 4815, Chapter 48, Title 29, Delaware Code.

Section 33. 2.0 Appropriated Special Fund positions shall be established in the Department of Public Safety (45-00-00), State Police (45-06-00), State Bureau of Identification (45-06-08). The positions shall be used to administer the security and law enforcement provisions of this Act. The positions shall be funded from special funds authorized under Section 4815, Chapter 48, Title 29, Delaware Code.

Section 34. The State Lottery Office, the Delaware State Police and the Office of the Attorney General shall issue a report by November 15, 1994 or before any video lottery agent is licensed detailing the security, law enforcement and public safety measures they believe to be necessary in order for the video lottery to be operated free from criminal influence and to protect communities in which the video lottery will operate from any adverse public safety consequences resulting from such lottery. Such report shall set forth with specificity the personnel and other costs necessary to take such measures. In preparing the report, the State Lottery Office, the Delaware State Police and the Office of the Attorney General shall consider the experience of other states which have implemented video lotteries or have sanctioned comparable gaming activity.

Became law without the Governors signature July 16, 1994.