Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 06 - Racing Commission
Rule 006.06.19-023 - CGR 23 Off-Track Pari-Mutuel Sports Wagering and Off-Track Pari-Mutual Other Event Wagering
Universal Citation: AR Admin Rules 006.06.19-023
Current through Register Vol. 49, No. 9, September, 2024
23.010 Scope. This Rule governs and its applicability is limited to off-track pari-mutuel wagering on sporting events and other events for which approval has been granted by the Commission pursuant to Amendment 100. Off-track pari-mutuel wagering on horse and greyhound races conducted by franchise holders shall continue to be governed by the Arkansas Horse Racing Law, Ark. Code Ann. § 23-110-101, et seq., and Arkansas Greyhound Racing Law, Ark. Code Ann. § 23-111-101, et seq., respectively, and the rules of the Commission thereunder, and not these Rules.
23.020 Definitions. As used in this Rule:
1. "Breakage" means the odd cents over a
multiple of ten cents arising from the computation of odds and payoffs on
off-track pari-mutuel sports wagers.
2. "Commission" means the Arkansas Racing
Commission or the Commission's designee.
3. "Commission on wagers" means an amount
retained and not returned to patrons by a pari-mutuel sports book from the
aggregate amount of off-track pari-mutuel sports wagers.
4. "Common pari-mutuel pool" means a
pari-mutuel wagering pool consisting of the off-track pari-mutuel sports wagers
placed at two or more pari-mutuel sports books.
5. "Manual merge" means the process used in
the event of a systems or communications failure by which participating
pari-mutuel sports books transmit to the systems operator through telephone,
telecopy, cellular or other means of communication, the sports books' wagering
information, and the process by which the systems operator includes the
off-track pari-mutuel sports wagers in the common pari-mutuel pool in such
event.
6. "Off-track pari-mutuel
sports system" means a computerized system or component of a system that is
used to receive wagering information from and transmit pool data to a
pari-mutuel sports book.
7.
"Off-track pari-mutuel sports wager" means a pari-mutuel wager on a sporting
event or other event offered as part of a common pari-mutuel pool, whether or
not the wager is actually included in the common pari-mutuel pool.
8. "Other event" means any event other than a
horse race, dog race, or athletic sporting event.
9. "Pari-mutuel sports book" means an
establishment within this state that has been authorized to accept off-track
pari-mutuel sports wagers pursuant to Amendment 100, or an out-of-state
facility approved to accept off-track pari-mutuel sports wagers. Where
applicable, the term also includes a person or governmental agency from outside
this state that operates such a facility, and an association of such
facilities.
10. "Pool data" means
data regarding the results, payoffs, odds or payoff prices, and the aggregate
amount of off-track pari-mutuel sports wagers accepted on each sporting event
or other event by all pari-mutuel sports books.
11. "Post time" means five minutes before the
scheduled start of a sporting event or other event or such other time as
designated by the Commission.
12.
"Sporting event" means an individual race, game, match or contest, and any
group, series or part thereof. The term does not include horse or dog
races.
13. "Systems operator" or
"operator of a system" means a person engaged in providing the off-track
pari-mutuel sports system or services directly related to the reconciliation of
a common pari-mutuel pool and transfers of funds between the participating
pari-mutuel sports books.
14.
"Wagering information" means the amount of off-track pari-mutuel sports wagers
accepted for each sporting event or other event by a single pari-mutuel sports
book.
23.030 Authorization required to accept off-track pari-mutuel sports wagers; application.
1. A person shall not
accept off-track pari-mutuel sports wagers in Arkansas unless the person has
received authorization from the Commission to accept such wagers. Authorization
to accept off-track pari-mutuel sports wagers shall only be granted to a
nonrestricted operation licensed to accept wagers on sporting events or other
events.
2. An application for
authorization to accept off-track pari-mutuel sports wagers must be submitted
using such forms as the Commission approves. The application must be
accompanied by an internal control system that complies with these
Rules.
23.040 Conduct of off-track pari-mutuel sports wagering.
1. Off-track pari-mutuel sports wagering may
be conducted only at a pari-mutuel sports book.
2. A pari-mutuel sports book shall comply
with the provisions of these Rules.
3. A pari-mutuel sports book shall not accept
off-track pari-mutuel sports wagers after post time. Off-track pari-mutuel
sports wagers become final at the start of the sporting event or other
event.
4. A pari-mutuel sports book
shall conspicuously display, at periodic intervals to be determined by the
Commission, both the aggregate amount of off-track pari-mutuel sports wagers
accepted and the odds for each sporting event or other event on which off-track
pari-mutuel sports wagering is being conducted.
5. A pari-mutuel sports book shall pay
winning off-track pari-mutuel sports wagers in accordance with the pari-mutuel
payoff on the off-track pari-mutuel sports wagers accepted on a sporting event
or other event, irrespective of whether all wagering information from all
pari-mutuel sports books actually was included in the common pari-mutuel
pool.
6. A pari-mutuel sports book
shall return at least one dollar and five cents for each winning dollar
wagered.
7. The pari-mutuel sports
books shall be jointly responsible for any deficiencies and shall share in any
excesses resulting from the requirements of subsections 5 and 6 of this
section.
8. A pari-mutuel sports
book shall not pay any systems operator or any other pari-mutuel sports book
any compensation for the right to be part of a common pari-mutuel pool unless
the agreement setting forth the terms of the compensation has been approved
pursuant to section 23.140 of this Rule.
9. A pari-mutuel sports book shall adopt,
conspicuously display, and adhere to written house rules governing off-track
pari-mutuel sports wagering transactions with patrons. Prior to adopting or
amending such house rules, a pari-mutuel sports book shall submit the rules to
the Commission for the Commission's approval.
10. A pari-mutuel sports book shall allow a
patron to cash an outstanding off-track pari-mutuel sports wagering ticket for
at least 30 days from the date the sporting event is concluded. A ticket which
is not redeemed within such time becomes valueless, unless the time period is
extended by the licensee, and the sum of money represented by the ticket shall
then accrue to the issuing licensee.
23.050 Approval to share in revenues; application.
1. A pari-mutuel sports
book shall not share the revenue from off-track pari-mutuel sports wagering
with any person unless the person who is to share in the revenue has been
licensed by or received approval from the Commission.
2. An application for approval to receive a
share of the revenue from off-track pari-mutuel sports wagering must be
submitted using such forms as the Commission approves.
23.060 Criteria for licensing and approval to share in revenue.
The Commission may consider the following suitability criteria in determining whether to approve an application by a person to receive a share of the revenue from off-track pari-mutuel wagering:
(a) A person of good character, honesty and
integrity;
(b) A person whose prior
activities, criminal record, if any, reputation, habits and associations do not
pose a threat to the public interest of this State or to the effective
regulation and control of gaming or charitable lotteries, or create or enhance
the dangers of unsuitable, unfair or illegal practices, methods and activities
in the conduct of gaming or charitable lotteries or in the carrying on of the
business and financial arrangements incidental thereto; and
(c) In all other respects qualified to be
licensed or found suitable consistently with the declared policy of the
State.
23.070 Requirements imposed upon out-of-state pari-mutuel sports books approved to share in the revenue or otherwise receive compensation.
1. An out-of-state pari-mutuel sports book
approved to share in the revenue or otherwise receive compensation from
pari-mutuel sports books within this state for the right to be part of a common
pari-mutuel pool shall comply with all applicable state and federal laws
regarding wagers on sporting events or other events for which it is offering a
common pari-mutuel pool.
23.080 Participation in common pari-mutuel pool. All pari-mutuel sports books in Arkansas must be offered the right to accept wagers in a common pari-mutuel pool at the same fee or rate.
23.090 Licensing of off-track pari-mutuel sports systems operator.
1. A pari-mutuel sports book shall not use an
off-track pari-mutuel sports system unless the systems operator has been
licensed by the Commission.
2. An
application for a license to serve as a systems operator must be submitted
using such forms as the Commission approves. The application must be
accompanied by an internal control system that complies with these
Rules.
23.100 Requirements imposed upon systems operator.
1. Each systems operator shall maintain an
office in Arkansas and designate a key employee located in the Arkansas office
to supervise and be responsible for the day-to-day operations of the off-track
pari-mutuel sports system.
2. Each
systems operator shall comply with the internal control system and all
amendments to such system as have been approved by the Commission pursuant to
these Rules. Each systems operator shall, if required by the Commission, amend
the written internal control system to comply with any requirements consistent
with these Rules that the Commission deems appropriate.
3. Each systems operator shall prepare
financial statements covering all financial activities of the systems operator
for each business year and shall engage an independent accountant licensed by
the Arkansas state board of accountancy to audit the financial statements in
accordance with generally accepted auditing standards, unless the Commission
allows the systems operator upon written request to engage the independent
accountant to review the financial statements in accordance with standards
established by the American Institute of Certified Public
Accountants.
4. Each systems
operator shall submit to the Commission two copies of its audited or reviewed
financial statements not later than 120 days after the last day of the system
operator's business year.
5. If a
systems operator changes its business year, the systems operator shall prepare
and submit to the Commission audited or reviewed financial statements covering
the "stub" period from the end of the previous business year to the beginning
of the new business year, not later than 120 days after the end of the stub
period or incorporate the financial results of the stub period in the financial
statements for the new business year.
6. Reports that directly relate to the
independent accountant's review or audit of the systems operator's financial
statements must be submitted within 120 days after the end of the systems
operator's business year.
7. Each
systems operator shall require the independent accountant engaged by the
systems operator to audit or to review the systems operator's financial
statements to submit to the systems operator two copies of a written report of
its compliance with the internal control system approved by the Commission. Not
later than 150 days after the end of the systems operator's business year, the
systems operator shall submit a copy of the independent accountant's report or
any other correspondence directly relating to the systems operator's system of
internal control to the Commission, accompanied by the systems operator's
statement addressing each item of noncompliance noted by the independent
accountant and describing the corrective measures taken.
8. The Commission may request additional
information and documents from either the systems operator or the systems
operator's independent accountant, through the systems operator, regarding the
financial statements or the services performed by the independent
accountant.
23.110 Approval of off-track pari-mutuel sports system. A pari-mutuel sports book shall not use an off-track pari-mutuel sports system unless the system has been approved pursuant to the provisions of these Rules governing associated equipment.
23.120 Minimum technical requirements for off-track pari-mutuel sports systems. An off-track pari-mutuel sports system must include a fully redundant computer system and must:
1. Receive and
aggregate by pool all off-track pari-mutuel sports wagering information
received separately from each of the pari-mutuel sports books;
2. Receive and report to each pari-mutuel
sports book at periodic intervals to be approved by the Commission all pool
data compiled through the system;
3. After each sporting event or other event
on which off-track pari-mutuel sports wagering is conducted, report to each
pari-mutuel sports book the results and payoffs; and
4. Provide all accounting and reconciliation
reports required by the Commission.
23.130 Operation of the off-track pari-mutuel sports system. A systems operator shall:
1. Immediately notify the pari-mutuel sports
books in the event that it is unable to receive wagering information or
transmit pool data, and shall cause the system to cease accepting off-track
pari-mutuel sports wagers if it is unable to receive the wagering information
or transmit the pool data.
2. Cause
the system to cease accepting off-track pari-mutuel sports wagers from the
pari-mutuel sports books at post time.
23.140 Approval of agreements.
1. The terms and conditions of any agreement
between pari-mutuel sports books, or between pari-mutuel sports books and a
systems operator relating in any way to the operation of an off-track
pari-mutuel sports system, a common pari-mutuel pool or transmission of
wagering information or pool data regarding sporting events or other events on
which off-track pari-mutuel sports wagering will be conducted, must be approved
by the Commission upon a recommendation of the Commission, or by the Commission
pursuant to these Rules, after whatever investigation the Commission deems
necessary.
2. An agreement
described in subsection 1 may be approved by the Commission if it is an
extension, renewal or modification of an agreement previously approved by the
Commission. Any material modification of a previously approved agreement, such
as an increase in the amount of the commission on wagers, must also be approved
by the Commission.
3. An agreement
described in this Rule may not be approved unless the Commission is satisfied
that:
(a) The agreement specifies the manner
in which the line or proposition for each sporting event will be
established;
(b) The agreement
specifies the amount of the commission on wagers;
(c) The agreement specifies the manner in
which breakage is to be allocated;
(d) The agreement specifies the manner in
which the parties will handle a system or communication failure and
specifically requires the systems operator to accept wagering information from
the pari-mutuel sports books through a manual merge for a reasonable amount of
time;
(e) The agreement specifies
the manner in which the pari-mutuel sports books shall be responsible for any
deficiencies and share in any excesses resulting from the requirements of these
Rules.
(f) The agreement specifies
the manner in which the parties will handle pool amounts that are not won by
patrons.
(g) The systems operator
and pari-mutuel sports books have complied with all laws applicable to
off-track pari-mutuel sports wagering;
(h) The systems operator and pari-mutuel
sports books hold all necessary licenses and approvals to participate in the
off-track pari-mutuel system;
(i)
There are means for the Commission to obtain adequate access to information
pertaining to the operation of the off-track pari-mutuel sports system, and to
investigate any associate of the systems operator and pari-mutuel sports books
in such operation;
(j) There is
assurance that the operation of the off-track pari-mutuel sports system will be
lawfully conducted after approval by the Commission and will not pose a threat
to gaming control in Arkansas;
(k)
There is assurance that the systems operator, pari-mutuel sports books and
their associates in the off-track pari-mutuel sports system will abide by the
conditions and restrictions imposed upon approval;
(l) There is assurance that the right of
Arkansas to collect license fees from the pari-mutuel sports books will be
adequately protected through an effective accounting system designed to prevent
the undetected employment of techniques to avoid payment; and
(m) There is assurance that the relationships
of the systems operator and pari-mutuel sports books with any associate will
not pose a threat to the interest of Arkansas in regulating the gaming
industry.
23.150 Deduction of commission on wagers. Except as provided in an agreement approved under these Rules, the total percentage of off-track pari-mutuel sports wagers that is to be deducted as a commission on wagers by pari-mutuel sports books in Arkansas must not exceed 25 percent.
23.160 Limits and conditions on approvals. The Commission may impose limits or place conditions upon any license or approval issued pursuant to this Rule.
23.170 Record retention; monthly reports; access to premises. Each pari-mutuel sports book and each systems operator which offers a common pari-mutuel pool, shall:
1. Maintain and retain all records required
by the Commission for at least five years after they are made, and provide them
to the Commission upon the Commission's request.
2. Allow the members of the Commission, their
agents and employees to immediately inspect and examine the premises and
immediately inspect, examine, photocopy, and audit all papers, books and
records of the pari-mutuel sports book or systems operator, on its premises or
elsewhere as practicable; and
3.
File with the Commission all reports required by the Commission.
23.180 Grounds for disciplinary action. Violation of any applicable law or rule by a pari-mutuel sports book or systems operator constitutes reasonable cause for disciplinary action.
23.190 Waivers. The Commission may waive one or more of the requirements of these Rules if it finds that such waiver is consistent with the public policy of the State.
23.200 Gross revenue computations.
1.
For purposes of this Rule, "gross revenue" means the total commission on
wagers, plus any pool amounts not won by patrons and retained by the
pari-mutuel sports book, plus the face amount of unpaid winning tickets, plus
breakage, less any rights fee paid by the pari-mutuel sports book, less any
commission on wagers returned to a patron by the pari-mutuel sports book
pursuant to these Rules.
2. As used
in this section, "rights fee" means any compensation paid by a pari-mutuel
sports book for the right to participate in a common pari-mutuel pool. The term
does not include any amount paid to a systems operator, a gaming licensee, an
association of gaming licensees or their affiliates.
23.210 Effective date of Rule. This Rule shall be effective upon passage.
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