Current through Register Vol. 63, No. 3, March 1, 2024
(1) Prior to
operating a hub, the entity must submit a completed application on commission
provided forms to: Oregon Racing Commission, P.O. Box 366, Gresham, OR 97030;
or fax the application to: (971) 673-0213; or email the application to:
orc.info@orc.oregon.gov for a license, and be granted a license, from the
commission, to conduct simulcasting and pari-mutuel wagering in accordance with
ORS 462.725 and these rules as a
"Multi-Jurisdictional Simulcasting and Interactive Wagering Totalizator Hub."
(a) A license may range from one to five
years in length and the length should be so noted in the application
submitted.
(b) The current, daily
licensing fee is to be remitted no later than June 30th preceding the July 1
start of each year licensing has been granted or is being requested. Upon
request from a hub entity the executive director shall permit the hub entity to
make semiannual or quarterly payments of the daily licensing fee with the first
payment due no later than June 30.
(2) An applicant for a "Multi-Jurisdictional
Simulcasting and Interactive Wagering Totalizator Hub" license must provide the
following information as part of the application thirty days prior to the
scheduled commission meeting at which the application is to be presented:
(a) The applicant's legal name;
(b) If the applicant is a corporation, the
names, addresses, dates of birth of its shareholders, directors and officers;
if a shareholder is a corporation the date of incorporation, the place of
incorporation and the names, addresses, and dates of birth of its shareholders,
directors and officers must be provided;
(c) If the applicant is a partnership the
names, addresses, dates of birth of the partners; if a partner is a corporation
the date of incorporation, the place of incorporation and the names, addresses,
and dates of birth of its share holders must be provided;
(d) If the applicant is a corporation
ultimately owned by a not-for-profit entity without any shareholders, or is a
publicly traded corporation, the information required in subsection (2)(b) and
(2)(c) of this rule shall be required from the directors of the membership
organization, or the directors and officers of the publicly traded corporation,
in lieu of the shareholders;
(e)
The names of the race tracks the applicant, or its agent, has contracts with
that allow the applicant to provide the simulcast signals and pari-mutuel
wagering on the product;
(f)
Financial information from the applicant that demonstrates whether the
applicant has the financial resources to install and operate a hub;
(g) A detailed budget showing anticipated
revenue, expenditures and cash flows by month, from the hub's operation during
the license period;
(h) The number
of days that the applicant is planning to operate the hub during the fiscal
year in which they are seeking to be licensed;
(i) A list of all hub personnel containing
the name, position, job location, license number and expiration date. All
current gaming licenses should be listed, regardless of jurisdiction;
(j) A chart illustrating the organizational
structure, including reporting lines;
(k) A list of all states where the hub is
operating; and
(l) Documentation of
proper filing that the Hub applicant and/or parent company is registered to do
business in the state of Oregon.
(3) As part of the application for licensure
as a hub, the applicant shall submit a detailed plan of operations in a format
and containing such information as required by the commission. At a minimum,
the operating plan shall address the following issues:
(a) The manner in which the proposed
simulcasting and wagering system will operate;
(b) The requirements for a "qualified
subscriber based service" or "closed loop subscriber based system" set out in
OAR 462-220-0010(2);
(c) Programs
for responsible wagering; Beginning July 1, 2023, responsible wagering programs
must include at a minimum:
(A) Annual training
for all staff that interact directly with account holders;
(B) Advertising must include responsible
wagering messaging;
(C) An account
holder may request a one year, three year, five year or a lifetime
self-exclusion;
(D) An account
holder that has elected to self-exclude will be removed from any type of direct
advertising or promotions; and
(E)
Responsible wagering resources must be available on all ADW web and other
sites, and must include information about where to get additional
help.
(d) Mitigation for
the effects of account wagering on the source market in Oregon. In addition to
the source market mitigation plan as outlined in the application, more detailed
source market information shall be provided by the hub at the commission's
request. A mitigation plan must include one of the following options:
(A) An agreement with a state commercial race
meet licensee as defined in ORS
462.062, a copy of which has
been submitted to the commission; or
(B) A written agreement with the Oregon HBPA,
a copy of which has been submitted to the commission; or
(C) A written plan submitted to, and approved
by, the commission that mitigates the effect of account wagering and provides
equitable compensation to the commercial race meet licensee as defined in ORS
462.062. Source market fees
shall be paid statewide on Oregon accounts. Accounts must be available to
Oregon residents if a hub is licensed in Oregon.
(e) The requirements for accounts established
and operated for persons whose principal residence is outside of the state of
Oregon. The commission may require changes in a proposed plan of operations as
a condition of granting a license. No subsequent changes in the system's
operation may occur unless ordered by the commission or until approval is
obtained from the commission after it receives a written request.
(f) A list of any affiliate sites or
potential affiliate sites of the hub. The operating plan must provide the
following information and meet the following affiliate guidelines:
(A) The name and web address of the affiliate
site.
(B) The person or companies
involved in the affiliate agreement.
(C) That the affiliate site agreement is
clearly noted as either a marketing or service agreement.
(D) Customers using the affiliate site will
be customers of the licensed hub, subject to the same verification process and
account operational procedures as any other customer of said hub
licensee.
(E) The wagers placed
through the affiliate site will be processed through equipment owned and
operated by the licensed hub and their commission approved tote
provider.
(F) The commission
approved totalizator provider will incorporate the handle of the affiliate site
into the handle report for the licensed hub, or generate a separate daily
report for this handle. In either case, the handle will count as part of the
hub licensee's handle, and the hub licensee will be responsible for all taxes
on the handle generated from their own site and any affiliate sites.
(G) The affiliate site will be branded in
some form to indicate to the customer that they will be wagering through
systems operated by the licensed hub. The commission reserves the right to
approve or deny any affiliate sites. Additionally, the commission may determine
a handle level at which an affiliate site may need to apply for its own hub
license, or at which the hub licensee must be subject to the tax rate described
in OAR 462-220-0040(3).
(4) Multi-jurisdictional hubs that offer
handicapping contests must list each contest as a live money contest and/or an
entry fee contest. All applications for approval must be accompanied by
agreement(s) from the tracks.
(5)
The commission may conduct investigations or inspections or request additional
information from the applicant as it deems appropriate in determining whether
to approve the license application.
(6) The fee of $200 per day that the hub is
scheduled to operate must accompany the application. If the license is denied
by the commission the fee will be refunded less the amount equal to the amount
that the commission expended in conducting investigations and inspections which
was in excess of the expenses that would have otherwise been incurred by the
commission.
(7) To ensure that the
funds of an applicant's account holders will be properly held and maintained by
the applicant:
(a) The applicant must provide
evidence to the commission that the applicant has established a segregated
account (the Bank Account) in which all funds of its account holders will be
deposited in an insured account, approved by the commission, solely for the
benefit of the account holders:
(A) No hub
shall use the funds deposited in the Bank Account for any purpose except to
facilitate the wagering activities and other instructions or agreements of
account holders. The funds of an account holder held in the Bank Account shall
remain the property of the account holder for all purposes until wagered by the
account holder or otherwise withdrawn or used in accordance with the account
holder's instruction or agreement;
(B) The hub shall maintain a record of each
deposit, withdrawal or other use of funds held in the Bank Account for each
account holder (the Customer Record);
(C) Any account holder, who claims that any
credit or debit to his or her Customer Record is incorrect or who claims that
any deposit, withdrawal or use of the account holder's funds is incorrect, may
file a claim with the commission. The commission shall investigate all claims
and provide the hub with an opportunity to respond to such claim. The hub may
submit any information, documentation or other evidence supporting its position
with respect to the claim. If the commission determines that the Customer
Record is incorrect or that any deposit, withdrawal or use of an account
holder's funds was incorrect, the hub shall have 10 days to correct same as
instructed by the commission. Such correction may require the hub to correct
the Customer Record for the account holder, to deposit additional funds into
the Bank Account for the account holder, to remit funds directly to the account
holder, or any combination thereof.
(b) The applicant must provide a $50,000
irrevocable bond, letter of credit, or other security instrument to the
commission, in a form acceptable to the commission, which designates the
commission as the beneficiary thereof (the Security Instrument). The Security
Instrument shall permit the commission to make draws to cover such amounts as
the commission finds is necessary. For example, if a hub fails to deposit funds
into the Bank Account for an account holder or to remit funds directly to the
account holder, as described in subsection (7)(a)(C) above, within 10 days of
the commission's decision, the commission may draw down on or take other
appropriate action against the Security Instrument to ensure the account holder
is immediately made whole.
(8) An applicant licensed under this section
may enter into such agreements, as for what it deems good and sufficient
reasons, that are necessary to promote, advertise and further the sport of
racing or that may be necessary for the effective operation of interstate
account wagering, including, without limitation, television production and
telecommunications services.
(9) An
applicant must maintain an operational presence within the State of Oregon. A
call center for customer wagering, a sub-contract with an existing call center
for customer wagering, or a business office is required. In addition,
totalizator equipment must be located in Oregon, and services must be provided
by a totalizator vendor identified in the hub operating plan as approved by the
commission.
(10) An applicant must
provide the following to the commission:
(a)
Access to customer call monitoring, account holder detail, and electronic
wagering data;
(b) On site
regulatory visits of the call center by authorized commission staff;
and
(c) Reimbursement to the
commission for expenses associated with out-of-state regulatory
visits.
(11) An
applicant must maintain all customer account-related documentation for a period
of not less than one year, and audio recording for a period of not less than
three months.
Statutory/Other Authority: ORS
462.270(3)
& 462.725
Statutes/Other Implemented: ORS
462.725