810 KAR 1:011. Pari-mutuel wagering.

 

      RELATES TO: KRS 138.510-138.550,

230.210-230.375, 230.990

      STATUTORY AUTHORITY: KRS 230.215,

230.240, 230.260, 230.280, 230.290, 230.300, 230.310, 230.320, 230.361, 230.370

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

230.215(2) grants the commission the authority to regulate conditions under

which thoroughbred racing and pari-mutuel wagering thereon shall be conducted

in Kentucky. KRS 230.361(1) requires the authority to promulgate administrative

regulations governing and regulating mutuel wagering on horse races under the

pari-mutuel system of wagering. This administrative regulation establishes the

requirements for the operation of pari-mutuel wagering under KRS Chapter 230

and 810 KAR Chapter 1.

 

      Section 1. Pari-Mutuel System of Wagering

Required. (1) The only wagering permitted on a live or historical horse race

shall be under the pari-mutuel system of wagering. All systems of wagering

other than pari-mutuel shall be prohibited. Any person participating or attempting

to participate in prohibited wagering shall be ejected and excluded from

association grounds.

      (2) Wagering conducted in conformity with

KRS Chapter 230 and 810 KAR Chapter 1 is pari-mutuel.

 

      Section 2. Totalizator or Other Approved

Equipment Required. (1) Pari-mutuel wagering on live and historical horse races

shall only be conducted through the use of a totalizator or other similar

mechanical equipment approved by the commission pursuant to KRS 230.361.

      (2) The totalizator or other mechanical

equipment shall be available for testing under the supervision of the

commission upon request by the commission to ensure its proper working order.

 

      Section 3. Wagering on an Historical

Horse Race Authorized. (1) Wagering on an historical horse race is hereby authorized

and may be conducted in accordance with KRS Chapter 230 and 810 KAR Chapter 1.

      (2) Wagering on an historical horse race

shall only be conducted by:

      (a) An association licensed to conduct a

live horse race meet; or

      (b) Two (2) or more associations licensed

to conduct a live horse race meet:

      1. Who form a joint venture; or

      2. Pursuant to an agreement between them.

      (3) Wagering on an historical horse race

shall only be permitted in a designated area on the licensed premises of an

association licensed to conduct a live horse race meeting. Wagering on

historical horse racing shall not be offered in any other location.

      (4) An association may conduct wagering

on historical horse races of any horse breed regardless of the type of breed

that primarily races in live meets conducted by the association. An association

may conduct wagering on historical races on any days and hours approved by the

commission, and shall not be limited to times during which the association is

conducting a live horse race meeting.

      (5) Any wager placed on an historical

horse race is an exotic wager.

      (6) Before offering wagering on an

historical horse race, an association shall first obtain the commission’s

written approval of all wagers offered as set forth in 810 KAR 1:120.

      (7) All wagering on an historical horse

race shall incorporate the following elements:

      (a) A patron may only wager on an

historical horse race on a terminal approved by the commission;

      (b) An association shall at all times

maintain at least two (2) terminals offering each type of exotic wager on an

historical horse race;

      (c) Once a patron deposits the wagered

amount in the terminal offering wagering on an historical horse race, an

historical horse race shall be chosen at random;

      (d) Prior to the patron making his or her

wager selections, the terminal shall not display any information that would

allow the patron to identify the historical race on which he or she is wagering,

including the location of the race, the date on which the race was run, the

names of the horses in the race, or the names of the jockeys that rode the

horses in the race;

      (e) The terminal shall make available

true and accurate past performance information on the historical horse race to

the patron prior to making his or her wager selections. The information shall

be current as of the day the historical horse race was actually run. The information

provided to the patron shall be displayed on the terminal in data or graphical

form; and

      (f) After a patron finalizes his or her

wager selections, the terminal shall display a video replay of the race, or a

portion thereof, and the official results of the race. The identity of the race

shall be revealed to the patron after the patron has placed his or her wager.

 

      Section 4. Payouts Only Out of Pari-Mutuel

Pools: Seed Pools Required. (1)(a) A wager on an historical horse race, less

deductions permitted by KRS Chapter 230 or 810 KAR Chapter 1, shall be placed

in pari-mutuel pools approved by the commission.

      (b) A payout to a winning patron shall be

paid from money wagered by patrons and shall not constitute a wager against the

association.

      (c) An association conducting wagering on

an historical horse race shall not conduct wagering in such a manner that

patrons are wagering against the association, or in such a manner that the

amount retained by the association as a commission is dependent upon the

outcome of any particular race or the success of any particular wager.

      (2) An association shall only pay a

winning wager on an historical horse race out of the applicable pari-mutuel

pool and shall not pay a winning wager out of the association’s funds. Payment

of a winning wager shall not exceed the amount available in the applicable

pari-mutuel pool.

      (3) An association offering wagering on

an historical horse race shall operate seed pools in a manner and method

approved by the commission as set forth in 810 KAR 1:120. For each wager made,

an association may assign a percentage of the wager to seed pools. The seed

pools shall be maintained and funded so that the amount available at any given

time is sufficient to ensure that a patron will be paid the minimum amount

required on a winning wager.

      (4) An association shall provide the

funding for the initial seed pool for each type of exotic wager. The funding

for the initial seed pool shall be non-refundable and in an amount sufficient

to ensure that a patron will be paid the minimum amount required on a winning

wager.

 

      Section 5. Location of Terminals Used for

Wagering on an Historical Horse Race. (1) Terminals offering wagering on historical

horse races shall be located within designated areas which have the prior

written approval of the commission. Designated areas shall be established in

such a way as to control access by the general public and prevent entry by any

patron who is under eighteen (18) years of age or is otherwise not permitted to

place wagers.

      (2) Each association shall monitor persons

entering and leaving the designated areas and shall prevent access to any

patron who is under eighteen (18) years of age or is otherwise not permitted to

place wagers on historical horse races.

      (3) Each association shall provide

terminals that are accessible to handicapped patrons.

 

      Section 6. Records to be Maintained. (1)

Each association and each simulcast facility authorized under KRS 230.380 shall

maintain complete records of all pari-mutuel wagering transactions on live and

historical horse races, including the amounts wagered at each betting window,

self-service totalizator, mobile pari-mutuel teller, and terminal.

      (2) A copy of the wagering records shall

be retained and safeguarded for a period of not less than two (2) years and

shall not be destroyed without the prior written permission of the commission.

 

      Section 7. Equipment. (1) The association

and the totalizator provider shall install a primary and secondary device,

which activate the stop betting function of the totalizator system. The chief

state steward, or his or her designee, shall use the primary device to stop

wagering at the start of a live horse race. If wagering is not stopped by the

primary device at the start of the race, the totalizator operator shall stop

wagering using the secondary device. The secondary device shall be installed in

the totalizator room and shall only be used by the totalizator operator.

      (2) If there is a complete breakdown of

the totalizator or mechanical equipment during the wagering on a live horse

race, the wagering on that race shall be declared closed. If the totalizator

remains capable of computing payouts, the payouts for that race shall be

computed based on the amounts wagered prior to the breakdown. If the totalizator

is incapable of computing payouts, then refunds shall be issued for all amounts

wagered on that race.

      (3) If there is a complete breakdown of a

terminal offering wagering on an historical horse race, the association

offering the wager shall make a full refund of the patron’s balance on the terminal

at the time of the breakdown.

 

      Section 8. Entries in a Live Horse Race.

(1) The chief state steward shall timely advise an association’s pari-mutuel

manager, prior to the beginning of wagering on each live horse race, of the

horses that will compete in the race.

      (2) If two (2) or more horses entered for

the same live horse race are determined by the commission to have common ties

through ownership or training, they may be joined by the commission as a mutuel

entry. The mutuel entry shall become a single betting interest and a wager on

one (1) horse in a mutuel entry shall be a wager on all horses in the same

mutuel entry. If the number of horses competing in a live horse race exceeds

the numbering capacity of the totalizator, the racing secretary shall assign

the highest pari-mutuel numbers to horses so that the highest numbered horse

within the numbering capacity of the totalizator together with horses of higher

numbers, shall be grouped in the mutuel field as a single betting interest, and

a wager on one (1) horse in the mutuel field shall be a wager on all horses in

the same mutuel field.

      (3) A refund at cost value shall be made

to all holders of a purchased ticket bearing the number of a horse in any race

that has been scratched or withdrawn before the horse has become a starter,

unless the horse is part of a mutuel entry, and one (1) or more of the entry

starts.

 

      Section 9. Sale of Pari-Mutuel Tickets on

Live Horse Races. (1) The following types of pari-mutuel wagering shall be

permitted on a live horse race at all licensed associations and simulcast

facilities:

      (a) Normal win, place, and show wagers on

each race;

      (b) Any exotic wager previously approved

by the commission; and

      (c) Any new exotic wager approved in

writing by the commission pursuant to 810 KAR 1:120.

      (2) Pari-mutuel tickets on live horse

races shall not be sold except by a licensed association or a simulcast

facility authorized by KRS 230.380.

      (3) Pari-mutuel tickets on a live horse

race shall only be sold at regular ticket windows, self-service totalizator

machines, by mobile pari-mutuel tellers with hand-held totalizator devices, or

by any other method approved in writing by the commission prior to being

offered to the public. At least one (1) regular ticket window shall be made accessible

to handicapped patrons.

      (4)(a) Pari-mutuel stored value cards or

cash vouchers may be offered by an association. The dollar amount on the stored

value card or cash voucher may be redeemed at any time at any regular ticket

window or used to fund additional wagers.

      (b) Cash vouchers shall be valid for one

(1) year after the date of issuance. Failure to present any cash voucher for

redemption within one (1) year of issuance shall constitute a waiver of the

right to receive payment on the voucher.

      (5) A pari-mutuel wager shall not be made

on a race after the totalizator has been locked for that race.

      (6) Any claim by a patron that he or she

has been issued a pari-mutuel ticket other than that which was requested shall

be made before the patron has left the ticket window or before the mobile

teller has initiated a transaction with another patron. A claim for an

incorrect ticket shall not be honored after the totalizator has been locked.

 

      Section 10. Payment on Pari-Mutuel Tickets

on Live Horse Races. (1) At the end of each live horse race, the placing judges

shall advise the manager of the pari-mutuel department by the use of the

totalizator equipment or by telephone of the official placement of the horses,

and payouts shall not be made until the receipt of the notice.

      (2) Payment of valid pari-mutuel tickets

shall be made on the basis of the order of finish as declared

"official" by the stewards. A subsequent change in the order of

finish or award of purse money that may result from a subsequent ruling by the

stewards or commission shall not affect the pari-mutuel payout.

      (3) Each association shall deduct from

each pari-mutuel pool a commission, not exceeding the commission provided by

KRS 230.3615. The remainder of the pool after the deduction of the commission

shall be the net pool for distribution as payouts to ticket holders.

      (4) Payment on valid pari-mutuel tickets

shall be made only if presented and surrendered within one (1) year following

the running of the live horse race on which the wager was made. Failure to

present a ticket within one (1) year shall constitute a waiver of the right to

receive payment on the ticket.

      (5) The association shall be responsible

for the correctness of all payout prices posted as "official." If an

error is made in posting the payout figures, and ascertained before any tickets

are cashed, the posting error shall be corrected, accompanied by a public

address announcement, and only the correct amounts shall be used in the payout,

irrespective of the initial error.

      (6) A mutilated pari-mutuel ticket that

is not easily identifiable as being a valid ticket shall not be accepted for

payment.

      (7) An association shall establish a

written procedure for granting patrons an opportunity to file a claim on a lost

pari-mutuel ticket and provide a copy to the commission.

      (8) Prior to posting payouts, the

association’s pari-mutuel manager shall require the verification of the winning

runners and prices prior to posting official results.

      (9)(a) If an error is made in calculating

the payout on a winning wager, resulting in overpayment, the association shall

be responsible for the amount between the correct payout and the amount paid.

      (b) If the error in calculation results

in a payout being too low, the amount between the correct payout and the amount

paid shall be added to the net pool of the same position in the following race

on the same day or, if it is the last race of the day, then it shall be added

to the net pool of the same position in the same race on the following day. If

an error occurs in computing the daily double pool, the underpayment shall be

added to the daily double pool of the following day.

      (c) If an error occurs causing

underpayment on the last race of the entire racing meeting, the amount of the

underpayment shall be paid to the Kentucky Revenue Cabinet.

 

      Section 11. Minimum Wagers and Payouts.

(1) The minimum wager to be accepted by any licensed association on a live

horse race shall be ten (10) cents. The minimum payout on a one (1) dollar wager

on a live horse race shall be one (1) dollars and ten (10) cents, unless a

minus pool occurs. If a minus pool occurs, the minimum payout for a one (1)

dollar wager shall be one (1) dollar and five (5) cents.

      (2) The minimum wager to be accepted by

any licensed association on an historical horse race shall be ten (10) cents.

The minimum payout on any wager shall not be less than the amount wagered.

 

      Section 12. Minors Prohibited from

Wagering. A minor shall not be permitted by any licensed association or

simulcast facility to purchase or cash a pari-mutuel ticket.

 

      Section 13. Odds and payouts posted. (1)

Approximate odds for live horse races, based on win pool betting for finishing

first for each betting interest, shall be posted on one (1) or more boards or

television screens within view of the wagering public at intervals of not more

than ninety (90) seconds.

      (2) If daily double wagering is conducted

on a live horse race, before off-time of the second daily double race, the

probable payout for each two (2) dollar daily double wager combining the winner

of the first daily double race with every horse or betting interest in the

second daily double race shall be posted; except that if a dead heat for first

in the first daily double race occurs, or a scheduled starter in the second

daily double race is excused so as to cause a consolation daily double pool, then

posting of all possible payouts shall not be mandatory, but the association

shall make every effort to compute such daily double prices and advise the

public by posting or public address announcement as soon as possible and prior

to the running of the second daily double race.

      (3) For wagering on an historical horse

race, approximate odds or payouts for each wagering pool shall be posted on

each terminal for viewing by patrons at intervals of no more than ninety (90)

seconds.

 

      Section 14. Betting Explanation. (1) Each

association shall publish in the daily race program, for each day of live horse

racing, a general explanation of pari-mutuel wagering offered on live horse

races and an explanation of each type of betting pool offered. The explanation

also shall be posted in conspicuous places about the association grounds to

adequately inform the public and shall be submitted to the commission prior to

publication for approval.

      (2) Each association shall post, in

conspicuous places in the designated area, a general explanation of pari-mutuel

wagering offered on historical horse races and an explanation of each betting

pool offered. The explanation shall be submitted to the commission for approval

prior to its posting.

 

      Section 15. Prior Approval Required for

Number of Live Horse Races. Each association desiring to conduct more than nine

(9) live horse races on a single day shall first apply in writing to the commission

and obtain specific approval of the number of live horse races to be offered on

a single day.

 

      Section 16. Pools Dependent upon Entries

for Live Horse Races. (1) If horses representing five (5) or fewer betting

interests qualify to start in a live horse race, the association may prohibit

show wagering on that race. If horses representing four (4) or fewer betting

interests qualify to start in a live horse race, the association may prohibit

both place and show wagering on that race.

      (2) If a horse is scratched by the

stewards after wagering has commenced or a horse is prevented from running in a

live horse race because of failure of a starting-gate door to open properly,

and the number of actual starters representing different betting interests is:

      (a) Reduced to five (5), the association

may cancel show wagering on that race and the entire show pool shall be

refunded upon presentation and surrender of show tickets; or

      (b) Reduced to four (4) or fewer, the

association may cancel both place and show wagering on that race and the entire

place and show pool shall be refunded upon presentation and surrender of place

and show tickets.

 

      Section 17. Emergency Situation. If any

emergency arises in connection with the operation of the pari-mutuel department

not provided for by this administrative regulation, the pari-mutuel manager

shall take immediate corrective action and shall by the quickest means possible

notify the chief state steward and render a full report to the commission.

 

      Section 18. Severability. In the event that any provision or administrative

regulation of this chapter is found to be invalid, the remaining provisions of

this chapter shall not be affected nor diminished thereby. (KSRC Ch. 11, 11.01

to.13; 1 Ky.R. 904; eff. 5-14-75; Am. 5 Ky.R. 625; eff. 3-7-79; 10 Ky.R. 671;

eff. 12-2-83; 14 Ky.R. 620; eff. 11-6-87; 15 Ky.R. 2171; 16 Ky.R. 165; eff.

7-14-89; 18 Ky.R. 2003; eff. 3-3-92; 28 Ky.R. 476; 874; eff. 10-12-2001; TAm

eff. 8-9-2007; 37 Ky.R. 828; 2855; eff. 7-1-11.)