23-111-509. Disposition of wagering money.

23-111-509. Disposition of wagering money. (a) Each franchise holder conducting a racing meet under the provisions of this chapter shall keep its books and records in such manner as to clearly show the total amount of moneys wagered on each race held or conducted at each meet and the disposition of the moneys. (b)(1) In the calendar year 1995 and each calendar year thereafter, the franchise holder shall withhold and retain for its own use and benefit sixteen percent (16%) of all moneys wagered on live, on-premises races up to and including one hundred twenty-five million dollars ($125,000,000) and twelve percent (12%) of all moneys wagered on live, on-premises races in excess of one hundred twenty-five million dollars ($125,000,000). (2)(A) From the amount withheld and retained by the franchise holder, the franchise holder shall agree that the following credits will be made in the following percentage amounts of all moneys wagered on live, on-premises races up to and including one hundred twenty-five million dollars ($125,000,000) per calendar year, which shall be in addition to any other credits or payments: (i) Seven-eighths of one percent (.875%) to be used by the franchise holder for supplements for increasing purses awarded at races conducted at the franchise holder's facility; (ii) Three-eighths of one percent (.375%) to the institutions or funds described in §§ 23-111-503 — 23-111-505 and 23-111-515 on a proportionate basis; (iii) One-half of one percent (0.5%) to be used by the franchise holder for capital improvements to be made by the franchise holder at the racing facility; and (iv) One-half of one percent (0.5%) to be used by the franchise holder for promotions to be conducted by the franchise holder to encourage patronage and tourism. (B) These credits will not accrue on moneys wagered on live, on-premises races in excess of one hundred twenty-five million dollars ($125,000,000) per calendar year. (C) The Arkansas Racing Commission may audit and verify receipts and expenditures of the franchise holder in determining compliance with this subdivision (b)(2). (D) If there is a final determination by the commission that any of the credits or payments provided in this subsection have not been used for the purposes specified in this section, the franchise holder shall pay the amount equal to any moneys used for an unauthorized purpose to the commission for the use and benefit of the State of Arkansas. (3)(A) “Capital improvements” as used in this section shall include all items and expenditures incurred for new construction with related equipment, reconstruction, renovation, reconditioning, and repairing of facilities with related equipment, or for debt service on money borrowed by the franchise holder for those enumerated purposes. (B) In the case of capital improvements, the commission may use a multiyear approach based on a multiyear program being undertaken by the franchise holder so that accountability for expenditures may be based on expenditures made during the entire multiyear period out of the capital improvement moneys derived during the multiyear period. (c)(1) In the calendar year 1995 and each calendar year thereafter, for all racing meets conducted by the franchise holder, the franchise holder shall withhold and pay to the commission for the use and benefit of the State of Arkansas, as a privilege tax: (A) Three percent (3%) of all moneys wagered on live, on-premises races up to and including one hundred twenty-five million dollars ($125,000,000), together with one-third (1/3) of the odd cents or breaks; and (B) Seven percent (7%) of all moneys wagered on live, on-premises races in excess of one hundred twenty-five million dollars ($125,000,000), together with one-third (1/3) of the odd cents or breaks. (2)(A) For all races simulcast to the grounds of the franchise holder's Arkansas race track from other race tracks and races conducted in the past and rebroadcast by electronic means and shown on a delayed or replayed basis on the grounds of the franchise holder's Arkansas race track under § 23-111-508(d)(3), the franchise holder shall withhold and pay to the commission for the use and benefit of the State of Arkansas, as a privilege tax, one percent (1%) of all moneys wagered on such races on the grounds of a franchise holder's Arkansas race track. (B) From the one percent (1%) reduction in the simulcast privilege tax provided for in this section, the franchise holder shall agree that the following credits shall be made in the following percentage amounts, which shall be in addition to any other credits for payments: (i) One-fourth of one percent (0.25%) to be used by the franchise holder for supplements for increasing purses awarded at races conducted at the franchise holder's facility; (ii) One-fourth of one percent (0.25%) to be used by the franchise holder for promotions conducted by the franchise holder to encourage patronage and tourism; (iii) One-fourth of one percent (0.25%) to be used by the franchise holder for capital improvements made by the franchise holder at the racing facility; (iv) One-fifth of one percent (0.20%) to be used by the franchise holder to directly offset increased simulcasting expenses over and above those incurred during calendar year 2000, including interface fees, host signal fees, licensing fees, and equipment costs related to simulcast. The franchise holder shall provide such information necessary to reflect the increase in simulcast expenses. Any portion of this amount not needed to offset increased simulcast expenses shall be paid to the commission for the use and benefit of the State of Arkansas; and (v) Five one-hundredths of one percent (0.05%) to be distributed as provided in § 23-111-515(b)(1)(B). (C)(i) The commission shall seek the assistance of the Department of Finance and Administration to audit and verify receipts and expenditures of the franchise holder in determining compliance with this section. The franchise holder must deliver to the department any documents requested to check and verify compliance with this section within thirty (30) days of receiving a written request for the documents. If the department does not receive the requested documents within the time provided, the Secretary of the Department of Finance and Administration shall notify the commission, which shall issue an order to show cause why such documents have not been provided. (ii) The franchise holder shall not be permitted credit for expenditures under this section until the franchise holder submits documentation of each expenditure listing the specific expenditure and the payee of the expenditure and stating in specific terms the benefit created by the expenditure. (iii) In the case of patronage and tourism promotion and capital improvements, the commission may use a multiyear approach based on a multiyear program's being undertaken by the franchise holder so that accountability for expenditures may be based on expenditures made during the entire multiyear period out of the patronage and tourism promotion and capital improvement moneys derived during the multiyear period, provided that the multiyear period shall not exceed five (5) years, unless the commission makes a specific determination that a longer period is necessary to finance long-term construction projects for the joint benefit of patrons, dogmen, and the franchise holder. (iv) The franchise holder may seek prior approval of expenditures from the commission for expenditures. The application for such approval must contain the information required by this section. The prior approval will be subject to final verification by the department and approval by the commission that the expenditure meets the requirements of this section. (3) The licensee shall withhold no more than nineteen percent (19%) of the total moneys wagered in simulcast racing, except when the state of the host race meet allows for withholding a greater percentage, then the licensee shall withhold no more than the percentage allowed by the state of the host meet. (d) The franchise holder shall withhold and pay to the city or town in which the race track is located two-thirds (2/3) of the odd cents or breaks on all moneys wagered on live, on-premises races and on simulcast races, or if the track is not located within the corporate limits of a city or town, then the two-thirds (2/3) of the odd cents or breaks on all money wagered on live, on-premises races and on simulcast races shall be paid to the county in which the track is located. (e)(1) Excepting only the moneys retained for the use and benefit of the franchise holder, the amounts paid to the commission for the use and benefit of the State of Arkansas, and the amount paid to the city, town, or county, as provided in subsection (d) of this section, all moneys received by the franchise holder from wagers shall be paid over to patrons holding winning pari-mutuel tickets, as their respective interests may appear, upon presentation of the tickets. (2)(A) However, all winning pari-mutuel tickets not presented to the franchise holder for redemption on or before the one hundred eightieth day next following the last racing day of each racing meet hereafter held shall be void. (B) Of the moneys represented by the void pari-mutuel tickets, the franchise holder shall immediately distribute the proceeds as follows: (i) One-half (½) of the amount thereof shall be paid to the treasurer of the county in which the racing track is located for credit to the general fund of the county; and (ii) One-half (½) of the amount thereof shall be paid to the treasurer of the city in which the racing track is located and shall be credited to the general fund of the city. (C) The money shall be used for charitable purposes only, benefiting young females and young males of the city as determined by the mayor and the governing body of the city. It is the intent that the funds shall be made available to and used by the Boys and Girls Clubs or similar nonprofit charitable organizations providing recreational youth services benefiting young females and young males of the city. (f) Breaks or breakage shall be computed as the amount of odd cents remaining in each pari-mutuel pool after redistributions are made in a sum equal to the next lowest multiple of ten cents (10¢). Provided, in the event of a minus pool, the commission shall have the authority to establish the minimum payout on winning wagers. (g) All moneys due the State of Arkansas by the permit holder under subsection (c) of this section shall be paid to the commission daily, and all amounts due the city, town, or county under subsection (d) of this section shall be paid over to the treasurer of the city, town, or county immediately following the close of the racing meet. (h) The rate of tax on any additional methods of wagering shall be established by law.