AN INITIATIVE MEASURE

AN INITIATIVE MEASURE AMENDING SECTIONS 5-101, 5-110, 5-111, 5-112, 5-113 AND 5-601, ARIZONA REVISED STATUTES; REPEALING SECTION 5-601.01, ARIZONA REVISED STATUTES MAKING AN APPROPRIATION; RELATING TO GAMING.

Be it enacted by the People of the State of Arizona:

Section 1. Title

This act may be cited as the “Fair Gaming Act.”

Section 2. Purpose and intent

The people of this state declare that the intent and purposes of this Act include the following:

1. To assure the continuation of Indian casinos after the expiration of the current tribal-state compacts.

2. To require substantially similar regulation and supervision of tribal and racing permittee gaming devices.

3. To require full public disclosure of all gaming revenues by both Indian tribes and racing permittees.

4. To limit non-tribal gaming devices to not more than ten dog, horse and harness racetrack enclosures, at not more than two racetrack enclosures in each county and not more than 6,450 gaming devices statewide and to require a substantial part of the gaming device revenues be used to preserve live dog and horse racing in this state to preserve the jobs of over 6,000 people in the agricultural and racing industries.

5. To use 40 percent of the revenues from non-tribal gaming devices primarily to support:

--reading programs for students in kindergarten through third grade;

--prescription drugs for seniors and for rural health care;

--scholarships for graduates of Arizona high schools and community colleges;

--enhanced police, fire and emergency services;

--tourism promotion;

--a compulsive gambling fund;

--the general fund of this state.

6. To authorize 8 percent of the revenues from tribal gaming devices to be shared with this state for tribes electing to receive gaming rights beyond what this state must allow to tribes.

7. To allow rural tribes that cannot now enjoy the benefits of Indian gaming to share in those benefits by enabling them to transfer their gaming device allocations to other tribes.

8. To assure that rural tribes receive a fair share of gaming revenues by requiring minimum payments by the receiving tribes to the transferring tribes.

9. To prevent any future expansion of gaming in this state unless approved by a vote of the people pursuant to the Voter Protection Act.

10. To establish that the authorization, regulation and limitation of commercial gaming, including horse, harness and dog racing, pari-mutuel wagering, operation and use of gaming devices and card games, are matters of statewide concern requiring uniform and exclusive regulation by this state and to provide for state regulation and taxation of the operation of gaming devices and to preempt local taxation and regulation of the operation of pari-mutuel wagering and gaming devices at racetrack enclosures.

11. To override all other laws, ordinances and enactments that are inconsistent with this Act.

Section 4. Section 5-101, Arizona Revised Statutes, is amended to read:

5-101. Definitions

In this article, unless the context otherwise requires:

1.  "Additional wagering facility" means a facility which is not the enclosure in which authorized racing takes place but which meets the requirements of section 5-111, subsection A and is used by a permittee for handling pari-mutuel wagering.

2.  "Applicant" means a person, partnership, association or corporation placing before the department an application for a permit or license.

3.  "Association" means a body of persons, corporations, partnerships or associations, united and acting together without a charter from the state for the prosecution of some common enterprise.

4.  "Commercial horse racing" means horse racing conducted other than by a county fair association.

5.  "Commission" means the Arizona racing commission.

6.  "Concessionaire" means a person, partnership, association or corporation that offers goods or services for sale to the public, a permittee or a licensee at an enclosure in which authorized racing takes place or an additional wagering facility.

7.  "County fair facility" means any place, enclosure or track constructed in accordance with a permit issued by the commission for the purpose of running county fair horse racing dates as well as any commercial dates for horse racing that may be awarded by the commission in reference to such a location.

8.  "County fair racing association" means an association duly authorized by the board of supervisors to conduct a county fair racing meeting for the benefit of the county.

9.  "Dark day simulcast" means a simulcast received on a day when there are no posted races conducted at the enclosure in which authorized racing takes place.

10.  "Department" means the Arizona department of racing.

11.  "Desensitized" means that a horse's or dog's legs upon arrival at the receiving barn, saddling paddock or lockout kennel do not respond appropriately to tests for feeling administered by an official veterinarian.

12.  "Director" means the director of the Arizona department of racing.

13.  "Dog racing" means racing in which greyhound dogs chase a mechanical lure.

14.  "Entered" means that a horse or dog has been registered with an authorized racing official as a participant in a specified race and has not been withdrawn prior to presentation of the horse or dog for inspection and testing as provided in section 5-105.

15.  "Financial interest" means any direct pecuniary interest.

16.  "Firm" means a business unit or enterprise that transacts business.

17.  "GAMING DEVICE" MEANS AN ELECTROMECHANICAL DEVICE OR A DEVICE CONTROLLED BY AN ELECTRONIC MICROPROCESSOR OR ANOTHER MANNER THAT ALLOWS A PLAYER OR PLAYERS TO PLAY GAMES OF CHANCE, WHETHER OR NOT THE OUTCOME ALSO IS AFFECTED IN SOME PART BY SKILL, AND WHETHER THE DEVICE ACCEPTS COINS, TOKENS, BILLS, COUPONS, TICKET VOUCHERS, SMART CARDS, ELECTRONIC IN-HOUSE ACCOUNTING SYSTEM CREDITS OR OTHER SIMILAR FORMS OF CONSIDERATION AND, THROUGH THE APPLICATION OF CHANCE, ALLOWS A PLAYER OR PLAYERS TO BECOME ENTITLED TO A PRIZE, WHICH MAY BE COLLECTED THROUGH THE DISPENSING OF COINS, TOKENS, BILLS, COUPONS, TICKET VOUCHERS, SMART CARDS, ELECTRONIC IN-HOUSE ACCOUNTING SYSTEM CREDITS OR OTHER SIMILAR FORMS OF VALUE.

18. "GROSS GAMING REVENUE" MEANS NET WIN FROM GAMING DEVICES, WHICH IS THE DIFFERENCE BETWEEN GAMING WINS AND LOSSES, BEFORE DEDUCTING COSTS AND EXPENSES.

17. 19.  "Handle" means the total amount of money contributed to all pari-mutuel pools by bettors.

18. 20.  "Harness racing" means horse racing in which the horses are harnessed to a sulky, carriage or similar vehicle and driven by a driver.

19.  21. "Horse racing" means racing in which horses are mounted and ridden by jockeys.  For purposes of county fair racing meetings, "horse racing" means racing in which horses or mules are mounted and ridden by jockeys.

20.  22. "License" means the license issued by the department to each employee or other person participating in any capacity in a racing meeting, including officials and employees of the pari-mutuel department.

21. 23.  "Pari-mutuel wagering" means a system of betting which provides for the distribution among the winning patrons of at least the total amount wagered less the amount withheld under state law.

22. 24.  "Permit" means a permit for a racing meeting issued under the provisions of this article.

23. 25.  "Racing meeting" means a number of days of racing allotted by the commission in one permit.

24. 26.  "Simulcast" means the telecast shown within this state of live audio and visual signals of horse, harness or dog races conducted at an out-of-state track or the telecast shown outside this state of live audio and visual signals of horse, harness or dog races originating within this state for the purpose of pari-mutuel wagering.

25. 27.  "Undesirable" includes known bookmakers, touts, persons convicted of a violation of any provision of this article or of any law prohibiting bookmaking or any other illegal forms of wagering, or any other person whose presence would, in the opinion of the director, be inimical to the interests of the state.

26. 28.  "Week" means seven consecutive days beginning on Monday and ending on Sunday, mountain standard time.

Section 5.  Section 5-110, Arizona Revised Statutes, is amended to read:

5-110.  Racing days, times and allocations; emergency transfer; county fairs; charity days

A.  Permits for horse, harness or dog racing meetings shall be approved and issued for substantially the same dates allotted to permittees for the same type of racing during the preceding year or for other dates that permittees request, provided that, in the event there is a conflict in dates requested between two or more permittees in the same county for the same kind of racing, the permittee whose application is for substantially the same dates as were allotted to the permittee in the preceding year shall be entitled to have preference over other permittees.  In the event two or more permittees have agreed that the dates to be allotted to each of them each year shall be alternated from one year to the next, the commission shall recognize their agreement and such permittees may be accorded preference over any other permittee as to those dates to be allotted to such permittees on an alternating basis.  Except as otherwise provided, the commission shall allot dates to the respective permittees after giving due consideration to all of the factors involved and the interests of permittees, the public and this state.

B.  The commission may require by the terms of any permit that the permittee offer such number of races during any racing meeting as the commission shall determine, provided that the permittee shall be permitted to offer not less than the same number of races each day as offered in the prior year.  The commission shall require each horse racing permittee to conduct for a period of thirty days a number of races equal to an average of not less than two races for each day of racing exclusively for quarter horses.  If, in the opinion of the commission, the permittee is offering acceptable quarter horse races but an honest effort is not being put forth to fill these races by the horsemen, the commission may rescind the two race per day quarter horse requirement.

C.  Live racing and wagering on simulcast races shall be permissible in either daytime or nighttime, but there shall be no live daytime dog racing on the same day that there is live daytime horse or harness racing in any county in which commercial horse or harness racing has been conducted prior to February 1, 1971, and no live nighttime horse or harness racing on the same day that there is live nighttime dog racing in the same county.  There shall be no wagering on simulcast dog races before 4:15 p.m., mountain standard time, on the same day that there is live daytime horse or harness racing in any county in which commercial horse or harness racing has been conducted before February 1, 1971, EXCEPT AT A DOG RACING PERMITTEE’S RACETRACK ENCLOSURE AND, IF CONSENT IS GIVEN BY ALL COMMERCIAL RACING PERMITTEES IN THE COUNTY WHERE THE DOG RACING PERMITTEE’S RACETRACK ENCLOSURE IS LOCATED, AT ANY ADDITIONAL WAGERING FACILITIES OPERATED BY THE DOG RACING PERMITTEE, and no wagering on simulcast horse or harness racing after 7:30 p.m., mountain standard time, on the same day that there is live nighttime dog racing in the same county EXCEPT AT A HORSE OR HARNESS RACING PERMITTEE’S RACETRACK ENCLOSURE AND, IF CONSENT IS GIVEN BY ALL COMMERCIAL RACING PERMITTEES IN THE COUNTY WHERE THE HORSE OR HARNESS RACING PERMITTEE’S RACETRACK ENCLOSURE IS LOCATED, AT ANY ADDITIONAL WAGERING FACILITIES OPERATED BY THE HORSE OR HARNESS RACING PERMITTEE. HORSE OR HARNESS RACING PERMITTEES THAT ACCEPT WAGERS ON SIMULCAST HORSE OR HARNESS RACING AFTER 7:30 P.M. SHALL MAKE THE SAME RACING PROGRAM AVAILABLE TO DOG RACING PERMITTEES IN THE SAME COUNTY UNDER AN ADDITIONAL WAGERING FACILITIES AGREEMENT. DOG RACING PERMITTEES THAT ACCEPT WAGERS ON SIMULCAST DOG RACING BEFORE 4:15 P.M. SHALL MAKE THE SAME RACING PROGRAM AVAILABLE TO HORSE OR HARNESS RACING PERMITTEES IN THE SAME COUNTY UNDER AN ADDITIONAL WAGERING FACILITIES AGREEMENT. The hours during which any other dog, harness or horse racing is to be conducted shall be determined by the commission.  The application for a permit shall state the exact days on which racing will be held and the time of day during which racing will be conducted.

D.  If the commission determines that an emergency has obligated or may obligate a permittee to discontinue racing at a location, the commission may authorize the permittee to transfer racing for the number of days lost to any other location.

E.  A racing meeting, when operated by a county fair racing association or under lease during the county fair to any individual, corporation or association, shall not come under the limitation placed on days of racing in this section.

F.  The department shall be the judge of whether a county fair racing meeting is being operated in accordance with the provisions of this section.  A county fair racing meeting conducted by an individual, corporation or association, other than the properly authorized county fair racing association, shall come under the general provisions of this article the same as a commercial meeting.  Notwithstanding this subsection, a county fair racing meeting, whether conducted by a county fair racing association or by an individual, corporation or association other than a county fair racing association, is exempt from the requirement prescribed in section 5‑111 to pay to the state a percentage of the pari‑mutuel pool collected at the meeting.

G.  The commission may allow a permittee, in addition to the days specified in this permit, to operate up to three racing days during any one meeting as charity days.  From the THE amount THAT WOULD OTHERWISE BE deducted from the total handled in the pari‑mutuel pool on charity days, the permittee shall deduct an amount equal to the purses and the cost of conducting racing on these days, and shall donate the balance PAYABLE TO THE STATE ON CHARITY DAYS SHALL BE DONATED to nonprofit organizations and corporations which benefit the general public, which are engaged in charitable, benevolent and other like work and which are selected by the permittee and approved by the department.  In no event shall the amount given to charity from charity racing days be less than the amount which otherwise would have gone to this state as the state's share on a noncharity racing day.

H.  Notwithstanding any other provision of this chapter, any dog racing permittee to which a permit to conduct dog racing in this state has been issued may in any racing year modify the racing date allocations made to the permittee for conducting dog racing at a track by reallocating up to two‑thirds of the racing dates allocated to that permittee for dog racing at a track to another track in this state at which the permittee or a corporation of common ownership to the permittee conducts dog racing.  For the purpose of this section, a corporation of common ownership to the permittee is a corporation which is owned or controlled, directly or indirectly, by the same corporation that owns or controls the permittee and which holds a permit to conduct dog racing in this state.

I.  Notwithstanding any other provision of this article, any dog racing permittee that has offered live dog racing in eight out of ten calendar years from 1980 to 1990 in counties that have a population of less than five hundred thousand persons according to the most recent United States decennial census shall be considered as operating a racetrack enclosure for all purposes under this article and shall not be required to conduct live racing as a condition of that permittee's racing permit.  Any permittee qualified under this subsection may conduct wagering on telecasts of races conducted at racetrack enclosures within this state or at racetrack enclosures outside this state without offering live racing at that permittee's racetrack enclosure.

Section 6.  Section 5-111, Arizona Revised Statutes, is amended to read:

5-111.  Wagering percentage to permittee and state; exemptions

A.  The commission shall prescribe rules governing wagering on races under the system known as pari-mutuel wagering.  Wagering shall be conducted by a permittee only by pari-mutuel wagering and only on the dates for which racing or dark day simulcasting has been authorized by the commission. Wagering for a licensed racing meeting shall be conducted by a permittee only within an enclosure in which authorized racing takes place and, in counties having a population of less than five hundred thousand persons or at least one million five hundred thousand persons, as shown by the most recent United States decennial census, at those additional facilities which are owned or leased by a permittee and which are used by a permittee for handling wagering as part of the pari-mutuel system and pool of the permittee at the enclosure where the authorized racing is conducted.  In all other counties, wagering may also be conducted at additional facilities which are owned or leased by a permittee who is licensed to conduct live racing in those counties or who has the consent of all commercial permittees currently licensed to conduct live racing in those counties and which are used by a permittee for handling wagering and as part of the pari-mutuel system and pool of the permittee at the enclosure where the authorized racing is conducted.  If the additional facilities have not been used for authorized racing before their use for handling wagering, a permittee shall not use the facilities for handling wagering before receiving approval for such use by the governing body of the city or town, if located within the corporate limits, or by the board of supervisors, if located in an unincorporated area of the county.  A permittee may televise the races to the additional facilities at the times the races are conducted.  For the purpose of section 5-110, subsection C only, a race upon which wagering is permitted under this subsection shall be deemed to also occur at the additional facility in the county in which the additional facility is located, and as such shall be limited in the same manner as actual live racing in such county.  For the purpose of subsections B and C of this section, the wagering at the additional facility shall be deemed to occur in the county in which the additional facility is located.

B.  During the period of any permit for dog racing in any county, the state shall receive five and one-half per cent of all monies handled in the pari-mutuel pool operated by the permittee, to be paid daily during the racing meeting.  In all counties having a population of one million five hundred thousand persons or more, according to the most recent United States decennial census, four and three-quarters per cent of the gross amount of monies handled in a pari-mutuel pool shall be deducted from the pari-mutuel pool and shall be deposited daily into a trust account for the payment of purse amounts.  In counties having a population of less than one million five hundred thousand persons according to the most recent United States decennial census, four per cent of the gross amount of monies handled in a pari-mutuel pool shall be deducted from the pari-mutuel pool and shall be deposited daily in a trust account for the payment of purse amounts.  In addition, twenty‑five per cent of any reduction in pari-mutuel taxes each year resulting from the application of the hardship tax reduction credit determined pursuant to subsection I of this section shall be deposited in the trust account for supplementing purse amounts in an equitable manner over the racing meeting as determined by the commission.  Notwithstanding any other provision of this subsection, the percentage paid by a permittee to the state does not apply to monies handled in a pari-mutuel pool for wagering on simulcasts of out‑of‑state races.  During a week in which a permittee conducts live racing at the permittee's racetrack enclosure, the permittee shall deduct from monies handled in a pari-mutuel pool for wagering on simulcasts of out-of-state races and deposit daily in a trust account for the payment of purse amounts the same percentage of the pari-mutuel pool as is deducted for purses for live races unless otherwise agreed by written contract.  Unless otherwise agreed by written contract, if the commission reasonably determines that live racing will not be conducted within one calendar year at a racetrack enclosure, the permittee shall deduct from monies handled in a pari-mutuel pool for wagering on simulcasts of out‑of‑state races and deposit daily in a trust account to supplement purses of any dog track where live racing is conducted within a one hundred mile radius.  The supplementing provided by this subsection shall be in the most equitable manner possible as determined by the commission.  The permittee shall allocate the funds in the trust account and pay purse amounts at least biweekly.  The permittee may, at the permittee's discretion, MAY pay additional amounts to augment purses from the amounts received by the permittee under this subsection.

C.  During the period of a permit for horse, harness or dog racing, the permittee which conducts such meeting may deduct up to and including twenty‑five per cent of the total amount handled in the regular pari‑mutuel pools and may, at the permittee's option, deduct up to and including thirty per cent of the total amount handled in the exacta, daily double, quinella and other wagering pools involving two horses or dogs, and up to and including thirty-five per cent of the total amount handled in the trifecta or other wagering pools involving more than two horses or dogs in one or more races. The amounts if deducted shall be distributed as prescribed in subsection D of this section and section 5-111.02 for horse or harness racing permittees.  For dog racing permittees, unless otherwise agreed by written contract, the permittee shall allocate to purses from amounts wagered on live racing conducted in this state an amount equal to fifty per cent of any amounts that are deducted pursuant to this subsection in excess of twenty per cent of the total amount handled in the regular pari-mutuel pools, twenty‑one per cent of the total amount handled in the exacta, daily double, quinella and other wagering pools involving two dogs or twenty-five per cent of the total amount handled in the trifecta or other wagering pools involving more than two dogs in one or more races.  For dog racing permittees the percentages prescribed in subsection B of this section shall be distributed to the state and to the trust account for payment of purse amounts and the permittee shall receive the balance.  If the dog racing permittee has made capital improvements, the distribution to the state shall be adjusted as provided in section 5‑111.03.  Monies deposited in the trust account for payment of purses pursuant to this subsection shall be in addition to amounts deposited pursuant to subsection B of this section.

D.  During the period of a permit for horse or harness racing, the state shall receive two per cent of the gross amount of the first one million dollars of the daily pari-mutuel pools and five per cent of the gross amount exceeding one million dollars of the daily pari‑mutuel pools.  Notwithstanding any other provision of this subsection, the percentage paid by a permittee to the state does not apply to monies handled in a pari-mutuel pool for wagering on simulcasts of out-of-state races.  The permittee shall retain the balance of the total amounts deducted pursuant to subsection C of this section.  Of FROM the amount retained DEDUCTED by the permittee PURSUANT TO SUBSECTION C OF THIS SECTION FROM LIVE OR SIMULCAST RACING AFTER REDUCTION FOR ALLOCATIONS TO THIS STATE AS PROVIDED IN SUBSECTION C OF THIS SECTION, less the amount payable to the permittee for capital improvements pursuant to section 5‑111.02, breakage distributed to the permittee pursuant to section 5‑111.01, and other applicable state, county and city transaction privilege or other taxes, unless otherwise agreed by written contract, THE PERMITTEE SHALL ALLOCATE fifty per cent shall be used for OF THE BALANCE TO purses.  Unless otherwise agreed by written contract, fifty per cent of the revenues PROCEEDS received by the permittee from simulcasting races as provided in section 5-112, net of costs of advertising, shall be utilized as a supplement to the general purse structure.  All amounts which are deducted from the pari-mutuel pool for purses pursuant to this section and sections 5‑111.01, 5-112 and 5-114 and revenues PROCEEDS which are received from simulcasting and which are to be used as a supplement to the general purse structure pursuant to this subsection shall be deposited daily into a trust account for the payment of purse amounts.

E.  Any county fair racing association may apply to the commission for one racing meeting each year and the commission shall set the number of days and the dates of such meetings.  A racing meeting conducted under this subsection shall be operated in such manner that all profits accrue to the county fair racing association, and the county fair racing association may deduct from the pari-mutuel pool the same amount as prescribed in subsection C of this section.  All county fair racing meetings, whether conducted by county fair racing associations under the provisions of this subsection or by an individual, corporation or association other than a county fair racing association, are exempt from the payment to the state of the percentage of the pari-mutuel pool prescribed by subsection D of this section and are also exempt from the provisions of section 5-111.01.

F.  Monies from charity racing days are exempt from the state percentage of the pari-mutuel pool AND SHARE OF DAILY GROSS GAMING REVENUE prescribed in this section.

G.  Sums held by a permittee for payment of unclaimed pari-mutuel tickets AND UNCLAIMED GAMING DEVICE WINNINGS are exempt from the provisions of the revised Arizona unclaimed property act, title 44, chapter 3.

H.  All of the amounts received by a permittee from the gross amount of monies handled in a pari-mutuel pool and all amounts held by a permittee for payment of purses pursuant to this section and sections 5-111.01, 5-112 and 5-114 are exempt from the provisions of title 42, chapter 5.

I.  On August 1 of each year a permittee is eligible for a hardship tax credit pursuant to this subsection.  For purposes of this subsection, "permittee" shall include includes any person who has succeeded to the interest of a permittee and who is authorized to conduct racing at the facility for which the permit was issued.  The department shall determine the amount of any hardship tax credit as follows:

1.  Determine the percentage decrease in pari-mutuel wagering by determining the percentage decrease in pari-mutuel wagering between the base period amount and the amount of pari‑mutuel wagering in the previous fiscal year at the racetrack and the additional wagering facilities operated by the permittee.  The base period amount is the highest total annual pari-mutuel wagering at the racetrack and all additional wagering facilities as reported to the department for fiscal year 1989‑1990, 1990‑1991, 1991‑1992, 1992‑1993 or 1993‑1994.

2.  Determine the permittee's hardship tax credit by multiplying the total pari-mutuel tax due as a result of wagering at the racetrack and all additional wagering facilities for the previous fiscal year before applying any hardship tax credit amount by the percentage decrease in pari-mutuel wagering determined pursuant to paragraph 1 of this subsection and multiplying the result by three.

3.  The permittee's pari-mutuel tax due as otherwise determined under subsections B and D of this section shall be reduced for the current period and any future periods by an amount equal to the amount of the hardship tax credit determined pursuant to this subsection.  The hardship tax credit is in addition to any other tax exemptions, rebates and credits.

I.  THE OPERATION OF GAMING DEVICES AT RACETRACK ENCLOSURES IS A MATTER OF STATEWIDE CONCERN AND REQUIRES UNIFORM REGULATION BY THE STATE AND NOT BY ANY POLITICAL SUBDIVISION. THE COMMISSION HAS THE EXCLUSIVE AUTHORITY TO REGULATE THE OPERATION OF GAMING DEVICES AND SHALL ADOPT RULES REGULATING THE OPERATION OF GAMING DEVICES. A COMMERCIAL RACING PERMITTEE MAY OPERATE GAMING DEVICES AT A RACETRACK ENCLOSURE AT WHICH IT MAY LAWFULLY CONDUCT LIVE RACING AND IS NOT SUBJECT TO FURTHER COUNTY OR MUNICIPAL LAND USE REGULATION OF THE LOCATION OF GAMING DEVICE OPERATIONS, EXCEPT THAT NOTHING IN THIS SECTION SHALL RESTRICT THE AUTHORITY OTHERWISE GRANTED TO COUNTIES AND MUNICIPALITIES UNDER TITLE 9, CHAPTER 4, ARTICLE 6.1 AND TITLE 11, CHAPTER 6, TO REGULATE BY LAWFUL ORDINANCE THE LOCATION OF RACETRACK ENCLOSURES. THE RULES OF THE COMMISSION SHALL PERMIT THE OPERATION OF GAMING DEVICES BY COMMERCIAL PERMITTEES WITHIN RACETRACK ENCLOSURES ON THE DAYS AND DURING THE HOURS PERMITTED FOR THE SALE OF SPIRITUOUS LIQUOR PURSUANT TO SECTION 4-244. THE COMMISSION IS EXEMPT FROM THE RULE MAKING REQUIREMENTS OF TITLE 41, CHAPTER 6 FOR PURPOSES OF THIS SECTION. THE COMMISSION SHALL ADOPT RULES PURSUANT TO THIS SECTION WITHIN NINETY DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION. THE RULES SHALL:

1. DEFINE AND LIMIT FORMS OF PAYMENT FOR WAGERS THAT MAY BE USED WITH GAMING DEVICES, INCLUDING COINS, TOKENS, BILLS, COUPONS, TICKET VOUCHERS, PERSONAL CHECKS, CASH, CASH EQUIVALENTS, SMART, DEBIT, CHARGE AND CREDIT CARDS, ELECTRONIC IN-HOUSE ACCOUNTING SYSTEM CREDITS OR OTHER SIMILAR FORMS OF CONSIDERATION.

2. LIMIT AMOUNTS TO BE WAGERED ON GAMING DEVICES CONSISTENT WITH SIMILAR LIMITATIONS UNDER SECTION 5-601, SUBSECTION J, PARAGRAPH 30.

3. ESTABLISH STANDARDS FOR AMOUNTS TO BE PAID AS PRIZE WINNINGS BY GAMING DEVICES.

4. ESTABLISH STANDARDS FOR INSPECTING GAMING DEVICES FOR ACCURACY AND RELIABILITY AND MAINTENANCE SCHEDULES.

5. ESTABLISH STANDARDS FOR MONITORING GAMING DEVICE USE, SURVEILANCE AND OPERATION, INCLUDING THE PHASE-IN OF A COMPUTERIZED MONITORING SYSTEM.

6. ESTABLISH STANDARDS AND REQUIREMENTS FOR RECORDING AND REPORTING GAMING DEVICE ACTIVITY, PERFORMANCE, MONITORING, AUDITING, REVENUES AND EXPENDITURES.

7. ESTABLISH STANDARDS FOR INVESTIGATION OF BACKGROUND AND LICENSING REQUIREMENTS FOR EMPLOYEES AS PROVIDED IN SECTION 5-108, SUBSECTION A.

8. ESTABLISH GUIDELINES FOR AUTOMATED TELLER MACHINE USE AND THE USE OF SMART, DEBIT, CHARGE AND CREDIT CARDS OR OTHER FORMS OF CREDIT IN GAMING FACILITIES.

9. REQUIRE THE PERMITTEE TO POST SIGNS AT ALL PUBLIC ENTRANCES AND EXITS TO THE RACETRACK ENCLOSURE THAT STATE THAT HELP IS AVAILABLE IF A PERSON HAS A PROBLEM WITH GAMBLING AND THE STATEWIDE TOLL FREE CRISIS HOTLINE TELEPHONE NUMBER, ESTABLISHED BY THE ARIZONA STATE LOTTERY COMMISSION.

10. PROHIBIT RACETRACK PERMITTEE ADVERTISING AND MARKETING REGARDING GAMING THAT SPECIFICALLY APPEALS TO MINORS AND ESTABLISH GUIDELINES FOR DETERMINING ACCEPTABLE ADVERTISING AND MARKETING.

11. ESTABLISH GUIDELINES FOR VOLUNTARY PROCEDURES FOR A PERSON TO REQUEST BANS FROM THE RACETRACK ENCLOSURES, INCLUDING PROHIBITING THE PERSON FROM THE USE OF CHECK CASHING SERVICES, AUTOMATIC TELLER MACHINES, SMART, DEBIT, CHARGE AND CREDIT CARDS OR OTHER FORMS OF CREDIT OFFERED AT A RACETRACK ENCLOSURE. A THIRD PERSON MAY NOT REQUEST A BAN ON BEHALF OF ANOTHER PERSON.

12. REQUIRE DAILY FINANCIAL REPORTING TO THE DEPARTMENT OF RACING FOR THE OPERATION OF ALL GAMING FOR EACH RACETRACK ENCLOSURE AND ANNUAL AUDITED FINANCIAL STATEMENTS FOR THE OPERATION OF ALL GAMING FOR EACH RACETRACK ENCLOSURE, WHICH SHALL BE AVAILABLE FOR PUBLIC INSPECTION AT THE DEPARTMENT OF RACING PURSUANT TO TITLE 39, CHAPTER 1, ARTICLE 2.

13. REQUIRE DISCLOSURE OF GROSS GAMING REVENUE FROM ALL TYPES OF GAMING AND CONTRIBUTIONS MADE TO THIS STATE BASED ON GROSS GAMING REVENUE THAT AT A MINIMUM IDENTIFIES THE GROSS GAMING REVENUE FOR EACH RACETRACK ENCLOSURE BY GAMING ACTIVITY AND THE ANNUAL TOTAL CONTRIBUTION TO THIS STATE BY EACH RACETRACK ENCLOSURE.

J. THE COMMISSION SHALL REGULATE AND SUPERVISE THE USE AND OPERATION OF GAMING DEVICES AT RACETRACK ENCLOSURES IN THIS STATE AND MAY DELEGATE TO THE DEPARTMENT ANY OF THE COMMISSION'S POWERS AND DUTIES NECESSARY TO CARRY OUT THE PURPOSES OF THIS CHAPTER. NO OTHER AGENCY OF THIS STATE OR ANY COUNTY, CITY, TOWN OR OTHER POLITICAL SUBDIVISION MAY LIMIT OR REGULATE THE USE AND OPERATION OF GAMING DEVICES BY A RACETRACK PERMITTEE.

K. RACING PERMITTEES SHALL PAY THIS STATE DAILY FORTY PER CENT OF DAILY GROSS GAMING REVENUE FROM GAMING DEVICES IN LIEU OF ANY OTHER STATE, COUNTY OR MUNICIPAL TAX, LICENSE, FEE, ASSESSMENT OR OTHER CHARGE ON REVENUE OR RECEIPTS FROM GAMING DEVICE OPERATIONS. THE STATE SHALL DISTRIBUTE THE STATE’S SHARE OF GAMING DEVICE RECEIPTS AS REQUIRED BY SECTION 5-113.

L. IN ADDITION TO THE PARI-MUTUEL WAGERING REVENUES THAT ARE ALLOCATED FOR HORSE, HARNESS AND DOG RACING PURSES PURSUANT TO THIS SECTION, TWENTY PER CENT OF GROSS GAMING REVENUE FROM GAMING DEVICES AFTER PAYMENT TO THIS STATE PURSUANT TO SUBSECTION K SHALL BE DEPOSITED DAILY IN A TRUST ACCOUNT FOR SUPPLEMENTING PURSE AMOUNTS UNLESS OTHERWISE PROVIDED BY A WRITTEN AGREEMENT BETWEEN A PERMITTEE AND:

1. FOR HORSE AND HARNESS RACING, THE GROUP THAT REPRESENTS THE MAJORITY OF OWNERS AND TRAINERS RACING AT THE PERMITTEE’S RACETRACK ENCLOSURE;

2. FOR DOG RACING, THE GROUP THAT REPRESENTS THE MAJORITY OF OWNERS AND TRAINERS RACING IN THIS STATE.

Section 7.  Section 5-112, Arizona Revised Statutes, is amended to read:

5-112.  Wagering legalized; simulcasting of races; unauthorized wagering prohibited; gaming devices; classification

A.  Except as provided in subsection L of this section, section 5‑101.01, subsection G and title 13, chapter 33, any person within the enclosure of a racing meeting held pursuant to the provisions of this article may wager on the results of a race held at the meeting or televised to the racetrack enclosure by simulcasting pursuant to this section by contributing money to a pari-mutuel pool operated by the permittee as provided by this article.

B.  The department may, upon request by a permittee, grant permission for electronically televised simulcasts of horse, harness or dog races to be received by the permittee.  In counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census, the simulcasts shall be received at the racetrack enclosure where a horse, harness or dog racing meeting is being conducted, provided that the simulcast may only be received during, immediately before or immediately after a minimum of nine posted races for that racing day.  In counties having a population of five hundred thousand persons or more, but less than one million five hundred thousand persons according to the most recent United States decennial census, the simulcasts shall be received at the racetrack enclosure where a horse, harness or dog racing meeting is being conducted provided that the simulcast may only be received during, immediately before or immediately after a minimum of four posted races for that racing day.  In all other counties, the simulcasts shall be received at a racetrack enclosure at which authorized racing has been conducted whether or not posted races have been offered for the day the simulcast is received. The simulcasts shall be limited to horse, harness or dog races.  The simulcasts shall be limited to the same type of racing as authorized in the permit for live racing conducted by the permittee.  The department may, upon request by a permittee, grant permission for the permittee to transmit the live race from the racetrack enclosure where a horse, harness or dog racing meeting is being conducted to a facility or facilities in another state.  All simulcasts of horse or harness races shall comply with the interstate horse racing act of 1978 (P.L. 95-515; 92 Stat. 1811; 15 United States Code chapter 57). All forms of pari-mutuel wagering shall be allowed on horse, harness or dog races televised by simulcasting.  All monies wagered by patrons on these horse, harness or dog races shall be computed in the amount of money wagered each racing day for purposes of section 5-111.

C.  Notwithstanding subsection B of this section, in counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census, simulcasts may be received at the racetrack enclosure and at any additional wagering facility used by a permittee for handling wagering as provided in section 5‑111, subsection A during a permittee's racing meeting as approved by the commission, whether or not posted races have been conducted on the day the simulcast is received, if:

1.  For horse and harness racing, the permittee's racing permit requires the permittee to conduct a minimum of nine posted races on an average of five racing days each week at the permittee's racetrack enclosure during the period beginning on October 1 and ending on the first full week in May.

2.  For dog racing, the permittee is required to conduct a minimum of twelve posted races on each of AN AVERAGE OF five RACING days each week for fifty weeks during a calendar year at the permittee's racetrack enclosure.

D.  Notwithstanding subsection B of this section, in counties having a population of five hundred thousand persons or more but less than one million five hundred thousand persons according to the most recent United States decennial census, simulcasts may be received at the racetrack enclosure and at any additional wagering facility used by a permittee for handling wagering as provided in section 5-111, subsection A during a permittee's racing meeting as approved by the commission, whether or not posted races have been conducted on the day the simulcast is received, subject to the following conditions:

1.  For horse and harness racing, the permittee may conduct wagering on dark day simulcasts for twenty days, provided the permittee conducts a minimum of seven posted races on each of the racing days mandated in the permittee's commercial racing permit.  In order to conduct wagering on dark day simulcasts for more than twenty days, the permittee is required to conduct a minimum of seven posted races on one hundred forty NINETY racing days at the permittee's racetrack enclosure.

2.  For dog racing, the permittee is required to conduct a minimum of nine posted races on each of four days each week for fifty weeks during a calendar year at the permittee's racetrack enclosure.

E.  In an emergency and upon a showing of good cause by a permittee, the commission may grant an exception to the minimum racing day requirements of subsections C and D of this section.

F.  The minimum racing day requirements of subsections C and D of this section shall be computed by adding all racing days, including any county fair racing days operated in accordance with section 5-110, subsection F, allotted to the permittee's racetrack enclosure in one or more racing permits and all racing days allotted to the permittee's racetrack enclosure pursuant to section 5-110, subsection H.

G.  Notwithstanding subsection B of this section and subject to subsections C and D of this  section, during the period of the permit for horse racing, wagering on dark day simulcasts of horse races at a permittee's additional wagering facilities shall only be allowed for a maximum number of days equal to the number of days of live horse racing scheduled to be conducted at that permittee's racetrack enclosure during the permittee's racing meeting, and during the period of a permit for dog racing, wagering on dark day simulcasts of dog races at a permittee's additional wagering facilities shall only be allowed for a maximum number of days equal to the number of days of live dog racing scheduled to be conducted at that permittee's racetrack enclosure during the permittee's racing meeting.  The number of days allowed for dark day simulcasting under this subsection shall be computed by adding all racing days, including any county fair racing days operated in accordance with section 5-110, subsection F, allotted to the permittee's racetrack enclosure in one or more racing permits and all racing days allocated to the permittee's racetrack enclosure pursuant to section 5‑110, subsection H.

H.  Simulcast signals or teletracking of simulcast signals does not prohibit live racing or teletracking of that live racing in any county at any time.

I.  Except as provided in subsection L of this section, section 5‑101.01, subsection G and title 13, chapter 33, any person within a racetrack enclosure or an additional facility authorized for wagering pursuant to section 5-111, subsection A may wager on the results of a race televised to the facility pursuant to section 5‑111, subsection A by contributing to a pari-mutuel pool operated as provided by this article.

J.  Notwithstanding subsection B of this section, the department, in counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census, may, upon request by a permittee for one day each year, grant permission for simulcasts to be received without compliance with the minimum of nine posted races requirement.

K.  Except as provided in this article and in title 13, chapter 33, all forms of wagering or betting on the results of a race, including but not limited to buying, selling, cashing, exchanging or acquiring a financial interest in pari-mutuel tickets, except by operation of law, whether the race is conducted in this state or elsewhere, are illegal.

L.  Until June 1, 2003, a permittee shall not knowingly permit a minor to be a patron of the pari-mutuel system of wagering. Beginning on June 1, 2003, a A permittee shall not knowingly permit a person who is under twenty‑one years of age to be a patron of the pari‑mutuel system of wagering OR TO USE GAMING DEVICES.

M.  Except as provided in title 13, chapter 33, any person violating any provision of this article with respect to any wagering or betting, whether the race is conducted within or without this state, is guilty of a class 6 felony.

N.  Simulcasting may only be authorized for the same type of racing authorized by a permittee's live racing permit.

0.  GAMING DEVICES MAY BE OPERATED ONLY AT A RACETRACK ENCLOSURE ONLY BY A COMMERCIAL PERMITTEE HOLDING A PERMIT FOR LIVE RACING WHERE LIVE OR SIMULCAST RACING PROGRAMS ARE CONDUCTED ON AN AVERAGE OF FIVE DAYS PER WEEK FOR AT LEAST FIFTY WEEKS IN A TWELVE-MONTH PERIOD. A PERMITTEE MAY NOT OPERATE GAMING DEVICES AT AN ADDITIONAL WAGERING FACILITY. THE TOTAL NUMBER OF RACETRACK ENCLOSURES AT WHICH GAMING DEVICES MAY BE OPERATED SHALL NOT EXCEED TEN, AND THERE SHALL BE NO MORE THAN TWO RACETRACK ENCLOSURES AT WHICH GAMING DEVICES ARE OPERATED LOCATED WITHIN A COUNTY.

P.  THE TOTAL NUMBER OF GAMING DEVICES AT ALL COMMERCIAL RACETRACK ENCLOSURES IN THIS STATE SHALL NOT EXCEED SIX THOUSAND FOUR HUNDRED FIFTY. THE TOTAL NUMBER OF GAMING DEVICES SHALL INCREASE ON JULY 1, 2008, AND EVERY FIVE YEARS THEREAFTER BY THE TOTAL INCREASE IN DEVICES FOR EACH INDIVIDUAL RACETRACK ENCLOSURE AS PROVIDED IN SUBSECTION R OF THIS SECTION.

Q. ON THE EFFECTIVE DATE OF THIS AMENDMENT TO THIS SECTION, THE MAXIMUM NUMBER OF GAMING DEVICES AVAILABLE FOR PLAY AT ONE TIME AT EACH RACETRACK ENCLOSURE SHALL BE LIMITED AS FOLLOWS:

1. FOR HORSE AND HARNESS RACING:

(A.)  NINE HUNDRED FIFTY GAMING DEVICES AT RACETRACK ENCLOSURES THAT CONDUCT A MINIMUM OF NINE POSTED LIVE RACES PER DAY ON AN AVERAGE OF FIVE RACING DAYS EACH WEEK DURING THIRTY CONSECUTIVE WEEKS IN A TWELVE-MONTH PERIOD AND HAVE ONE HUNDRED FORTY OR MORE POSTED LIVE RACE DAYS, INCLUDING AT LEAST ONE THOUSAND TWO HUNDRED POSTED LIVE RACES IN A TWELVE- MONTH PERIOD.

(B.)  FIVE HUNDRED FIFTY GAMING DEVICES AT RACETRACK ENCLOSURES THAT HAVE FEWER THAN ONE HUNDRED FORTY BUT AT LEAST FORTY-FIVE POSTED LIVE RACE DAYS IN A TWELVE-MONTH PERIOD AND THAT CONDUCT A MINIMUM OF EIGHT POSTED LIVE RACES PER DAY, INCLUDING AT LEAST THREE HUNDRED SIXTY POSTED LIVE RACES.

2. FOR DOG RACING:

(A.)  NINE HUNDRED FIFTY GAMING DEVICES AT RACETRACK ENCLOSURES THAT HAVE TWO HUNDRED FIFTY OR MORE POSTED LIVE RACE DAYS IN A TWELVE-MONTH PERIOD AND THAT CONDUCT A MINIMUM OF TWELVE POSTED LIVE RACES ON AN AVERAGE OF FIVE DAYS EACH WEEK FOR FIFTY WEEKS IN A TWELVE-MONTH PERIOD, INCLUDING AT LEAST THREE THOUSAND POSTED LIVE RACES.

(B.)  FIVE HUNDRED FIFTY GAMING DEVICES AT RACETRACK ENCLOSURES THAT HAVE FEWER THAN TWO HUNDRED FIFTY BUT MORE THAN FIFTY POSTED LIVE RACE DAYS IN A TWELVE-MONTH PERIOD AND THAT CONDUCT A MINIMUM OF TEN POSTED LIVE RACES ON AN AVERAGE OF FOUR DAYS EACH WEEK FOR FOURTEEN WEEKS IN A TWELVE-MONTH PERIOD, INCLUDING AT LEAST FIVE HUNDRED FIFTEEN POSTED LIVE RACES.

R.  THE MAXIMUM NUMBER OF GAMING DEVICES AVAILABLE FOR PLAY AT ONE TIME AT EACH RACETRACK ENCLOSURE SHALL BE INCREASED ON JULY 1, 2008, AND EVERY FIVE YEARS THEREAFTER BY THE PERCENTAGE INCREASE IN THE POPULATION OF THIS STATE FOR THAT PERIOD AS ESTIMATED BY THE DEPARTMENT OF ECONOMIC SECURITY. THE COMMISSION SHALL NOTIFY EACH PERMITTEE OF THE AMOUNT OF EACH AUTOMATIC INCREASE ALLOWED PURSUANT TO THIS SUBSECTION.

S. FOR PURPOSES OF DETERMINING THE NUMBER OF GAMING DEVICES AT EACH RACETRACK ENCLOSURE, A GAMING DEVICE CAPABLE OF BEING PLAYED BY MORE THAN ONE PERSON AT THE SAME TIME SHALL BE COUNTED AS ONE GAMING DEVICE FOR EACH PERSON WHO CAN PLAY THE GAMING DEVICE AT THE SAME TIME.

Section 8. Section 5-113, Arizona Revised Statutes, is amended to read:

5-113. Disposition of revenues and monies; funds; committee

A. All revenues derived from permittees, permits and licenses, as provided by this article, and all monies transferred pursuant to § 44-313, subsection A AND SECTION 5-111, SUBSECTION K shall be deposited, pursuant to §§ 35-146 and 35-147, or AND SHALL BE distributed as follows:

1. TWENTY FIVE PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION SHALL BE DEPOSITED IN THE CLASSROOM SITE FUND ESTABLISHED BY SECTION 15-977 TO BE USED FOR PURPOSE OF ESTABLISHING READING PROGRAMS FOR STUDENTS IN KINDERGARTEN PROGRAMS AND GRADES ONE THROUGH THREE.

2. TWENTY PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION SHALL BE DEPOSITED IN THE MEDICALLY NEEDY ACCOUNT ESTABLISHED BY SECTION 36-774 FOR THE PURPOSE OF ESTABLISHING PROGRAMS FOR PROVIDING ASSISTANCE TO MEDICARE ELIGIBLE PERSONS RESIDENT IN THIS STATE TO DEFRAY THE COST OF PRESCRIPTION MEDICATION OR TO ENHANCE THE AVAILABILITY OF HEALTH CARE TO ALL RESIDENTS OF THIS STATE LIVING IN RURAL AREAS OF THIS STATE.

3. TWELVE AND ONE-HALF PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION SHALL BE DEPOSITED IN THE TRANSACTION AND SEVERANCE TAX CLEARING ACCOUNT ESTABLISHED BY SECTION 42-5029 AND SHALL BE DISTRIBUTED TO INCORPORATED MUNICIPALITIES IN THIS STATE IN THE MANNER PRESCRIBED IN SECTION 42-5029, SUBSECTION D, PARAGRAPH 1 TO BE USED FOR PROVIDING ENHANCED POLICE, FIRE AND EMERGENCY SERVICES BY INCORPORATED MUNICIPALITIES.

4. TEN PERCENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION SHALL BE DEPOSITED IN THE POSTSECONDARY EDUCATION FUND ESTABLISHED BY SECTION 15-1853 ADMINISTERED BY THE COMMISSION FOR POSTSECONDARY EDUCATION TO BE USED FOR THE PURPOSE OF ESTABLISHING A PROGRAM TO PROVIDE SCHOLARSHIPS AND GRANTS TO RESIDENTS OF THIS STATE WHO GRADUATE FROM PUBLIC OR PRIVATE HIGH SCHOOLS, COMMUNITY COLLEGES OR PRIVATE POST SECONDARY INSTITUTIONS LICENSED UNDER TITLE 32, CHAPTER 30 IN THIS STATE TO ATTEND PUBLIC OR PRIVATE POSTSECONDARY EDUCATION INSTITUTIONS LICENSED UNDER TITLE 32, CHAPTER 30 LOCATED IN THIS STATE.

5. THREE PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION SHALL BE DEPOSITED IN THE TOURISM FUND ESTABLISHED BY SECTION 41-2306 TO SUPPLEMENT THE FUND AND TO BE USED FOR STATEWIDE TOURISM PROMOTION AND EXPENDITURES INCIDENTAL TO OR SUPPORTIVE OF STATEWIDE TOURISM PROMOTION.

6. FOUR MILLION DOLLARS OR TWO PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, SHALL BE DEPOSITED IN THE COMPULSIVE GAMBLING FUND ESTABLISHED BY SUBSECTION K OF THIS SECTION.

7. TWO HUNDRED THOUSAND DOLLARS OR ONE-TENTH OF ONE PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, SHALL BE DEPOSITED IN THE RACING GREYHOUND AND RACE HORSE ADOPTION FUND.

8. 1. Eight hundred thousand dollars or twenty-two per cent, whichever is less, THREE MILLION DOLLARS OR ONE AND ONE-HALF PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, shall be deposited in the Arizona county fairs racing betterment fund established by subsection B of this section.

9. 2. One million two hundred thousand dollars or thirty-three per cent, whichever is less, THREE MILLION DOLLARS OR ONE AND ONE-HALF PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, shall be deposited in the county fairs livestock and agriculture promotion fund established by subsection C of this section.

10. 3. Eight hundred thousand dollars or twenty-two per cent, whichever is less, FOUR MILLION FOUR HUNDRED THOUSAND DOLLARS OR TWO AND TWO-TENTHS PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, shall be deposited in the Arizona breeders' award fund established by subsection F of this section.

11. 4. Forty thousand dollars or one per cent, whichever is less, TWO HUNDRED THOUSAND DOLLARS OR ONE-TENTH OF ONE PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, shall be deposited in the Arizona stallion award fund established by subsection G of this section.

12. FOUR HUNDRED THOUSAND DOLLARS OR TWO-TENTHS OF ONE PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, TO BE USED TO SUPPLEMENT PURSES IN RACES IN WHICH ARIZONA BRED HORSES, AS PRESCRIBED IN SECTION 5-114, SUBSECTION C, ARE WINNERS.

13. 5. Three hundred thousand dollars or nine per cent, whichever is less, FOUR HUNDRED THOUSAND DOLLARS OR TWO-TENTHS OF ONE PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, shall be deposited in the county fair racing fund established by subsection I of this section.

14. 6. One per cent of the revenues and monies ONE HUNDRED THOUSAND DOLLARS shall be deposited in the agricultural consulting and training fund established by subsection J of this section.

15. 7. Forty-five thousand dollars or one per cent, whichever is less, ONE HUNDRED THOUSAND DOLLARS shall be subject to legislative appropriation to the department for administration of the Arizona county fairs racing betterment fund, the Arizona breeders' award fund, the Arizona stallion award fund, and the RACING greyhound AND RACE HORSE adoption fund AND THE COMPULSIVE GAMBLING FUND. Monies that are distributed pursuant to this paragraph and that remain unspent at the end of a fiscal year do not revert to the state general fund.

16. 8. Four hundred thousand dollars or eleven per cent, whichever is less, FOUR HUNDRED THOUSAND DOLLARS OR TWO-TENTHS OF ONE PER CENT OF THE TOTAL AMOUNT RECEIVED PURSUANT TO THIS SECTION, WHICHEVER IS MORE, shall be deposited in the Arizona exposition and state fair fund established by § 3-1005 for the purpose of capital outlay.

9. Any revenues and monies that are not distributed pursuant to paragraphs 1 through 8 of this subsection at the end of a fiscal year shall be deposited in the state general fund.

17. THE REMAINDER SHALL BE DEPOSTED IN THE STATE GENERAL FUND.

B. The Arizona county fairs racing betterment fund is established under the jurisdiction of the department. The department shall distribute monies from the fund to the county fair association or county fair racing association of each county conducting a county fair racing meeting in such proportion as the department deems necessary for the promotion and betterment of county fair racing meetings. All expenditures from the fund shall be made upon claims approved by the department. In order to be eligible for distributions from the fund, a county fair association must provide the department with an annual certification in the form required by the department supporting expenditures made from the fund. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.

C. The county fairs livestock and agriculture promotion fund is established under the control of the governor and shall be used for the purpose of promoting the livestock and agricultural resources of the state and for the purpose of conducting an annual Arizona national livestock fair by the Arizona exposition and state fair board to further promote livestock resources. The direct expenses less receipts of the livestock fair shall be paid from this fund, but such payment shall not exceed thirty per cent of the receipts of the fund for the preceding fiscal year. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. All expenditures from the fund shall be made upon claims approved by the governor, as recommended by the livestock and agriculture committee, for the promotion and betterment of the livestock and agricultural resources of this state. The livestock and agriculture committee is established and shall be composed of the following members, at least three of whom are from counties that have a population of less than five hundred thousand persons, appointed by the governor:

1. Three members representing county fairs.

2. One member representing Arizona livestock fairs.

3. One member representing the university of Arizona college of agriculture.

4. One member representing the livestock industry.

5. One member representing the farming industry.

6. One member representing the governor's office.

7. One member representing the Arizona state fair conducted by the Arizona exposition and state fair board.

8. One member representing the general public.

D. The governor shall appoint a chairman from the members. Terms of members shall be four years.

E. Members of the committee are not eligible to receive compensation but are eligible to receive reimbursement for expenses pursuant to title 38, chapter 4, article 2.

F. The Arizona breeders' award fund is established under the jurisdiction of the department. The department shall distribute monies from the fund to the breeder, or the breeder's heirs, devisees or successors, of every winning horse or greyhound foaled or whelped in this state, as defined by § 5-114, in a manner and in an amount established by rules of the commission to protect the integrity of the racing industry and promote, improve and advance the quality of race horse and greyhound breeding within this state. The department may contract with a breeders' association to provide data, statistics and other information necessary to enable the department to carry out the purposes of this subsection. Persons who are not eligible to be licensed under § 5-107.01 or persons who have been refused licenses under § 5-108 are not eligible to participate in the Arizona greyhound breeders' award fund. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. For the purposes of this subsection, "breeder" means the owner or lessee of the dam of the animal at the time the animal was foaled or whelped.

G. The Arizona stallion award fund is established under the jurisdiction of the department to promote, improve and advance the quality of stallions in this state. The department shall distribute monies from the fund to the owner or lessee, or the owner's or lessee's heirs, devisees or successors, of every Arizona stallion whose certified Arizona bred offspring, as prescribed in § 5-114, finishes first, second or third in an eligible race in this state. The department may contract with a breeders' association to provide data, statistics and other information necessary to enable the department to carry out the purposes of this subsection. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. The commission shall adopt rules pursuant to title 41, chapter 6 to carry out the purposes of this subsection. The rules shall prescribe at a minimum:

1. The manner and procedure for distribution from the fund, including eligibility requirements for owners and lessees.

2. Subject to availability of monies in the fund, the amount to be awarded.

3. The requirements for a stallion registered with the jockey club, Lexington, Kentucky or with the American quarter horse association, Amarillo, Texas to be certified as an Arizona stallion.

4. The types and requirements of races for which an award may be made.

H. The greyhound RACING GREYHOUND AND RACE HORSE adoption fund is established. The department shall administer the fund. All revenues derived from license fees collected from dog breeders, racing kennels and other operations pursuant to § 5-104, subsection F, paragraphs 7, 8 and 9 shall be deposited, pursuant to §§ 35-146 and 35-147, in the fund. The department shall distribute monies from the fund to provide financial assistance to nonprofit enterprises approved by the commission to promote the adoption of former RACING GREYHOUND AND RACE HORSE ANIMALS racing as domestic pets pursuant to § 5-104, subsection G in a manner and in an amount established by rules of the commission. ONE-HALF OF THE FUND SHALL BE DISTRIBUTED TO PROMOTE RACING GREYHOUND ADOPTIONS, AND ONE- HALF OF THE FUND SHALL BE DISTRIBUTED TO PROMOTE RACE HORSE ADOPTIONS. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.

I. The county fair racing fund is established. The department shall administer the fund. Subject to legislative appropriation, the department shall use fund monies for the administration of county fair racing. Any monies remaining unexpended in the fund at the end of the fiscal year in excess of seventy-five thousand dollars shall revert to the state general fund.

J. The agricultural consulting and training fund is established. The Arizona department of agriculture shall administer the fund. Subject to legislative appropriation, the Arizona department of agriculture shall use monies in the fund for the agricultural consulting and training program established by § 3-109.01. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.

K. THE COMPULSIVE GAMBLING FUND IS ESTABLISHED CONSISTING OF MONIES TRANSFERRED TO THE FUND PURSUANT TO SUBSECTION A, PARAGRAPH 2 OF THIS SECTION. THE DEPARTMENT SHALL ADMINISTER THE FUND AND SHALL DISTRIBUTE THE MONIES IN THE FUND TO PROGRAMS THAT SPECIALIZE IN THE TREATMENT OF PROBLEM AND PATHOLOGICAL GAMBLING.

Section 9. Section 5-601, Arizona Revised Statutes, is amended to read:

5-601. Gambling on Indian reservations; tribal-state compacts; revenue sharing agreements; funds; definitions

A. Notwithstanding any other law, this THIS state, through the governor, may enter into negotiations and execute tribal-state compacts with Indian tribes in this state pursuant to the Indian gaming regulatory act of 1988 (P.L. 100-497; 102 Stat. 2467; 25 United States Code sections 2701 through 2721 and 18 United States Code sections 1166 through 1168) AND IN ACCORDANCE WITH THIS SECTION. Notwithstanding the authority granted to the governor by this subsection, this state specifically reserves all of its rights, as attributes of its inherent sovereignty, recognized by the tenth and eleventh amendments to the United States Constitution. The governor shall not execute a tribal-state compact which waives, abrogates or diminishes these rights. A TRIBAL-STATE COMPACT MAY BE FOR A TERM NO LONGER THAN TEN YEARS AND MAY BE MODIFIED DURING ITS TERM. NO MODIFICATION MAY EXTEND OR SHORTEN THE TERM OF THE COMPACT EXCEPT THAT WITHIN THE LAST YEAR OF THE TERM OF A COMPACT IT MAY BE REPLACED BY A NEW COMPACT MADE PURSUANT TO THIS SECTION.

B. Tribal-state gaming compacts shall prohibit persons under twenty-one years of age from wagering on gaming activities conducted pursuant to the compact. as follows:

1. Beginning on June 1, 2003, any tribal-state gaming compact that is executed, modified, extended or renewed pursuant to this section shall include a provision that prohibits persons who are under twenty-one years of age from wagering on gaming activities.

2. Any tribal-state gaming compact that is executed, modified, extended or renewed pursuant to this section from and after the effective date of this amendment to this section but before June 1, 2003 shall include a provision that prohibits persons who are under twenty one years of age from wagering on gaming activities, except that the provision shall not take effect until June 1, 2003.

C. The governor shall not concur in any determination by the United States secretary of the interior that would permit gaming on lands acquired after October 17, 1988 pursuant to 25 United States Code section 2719.

D. The department of gaming is authorized to carry out the duties and responsibilities of the state gaming agency in compacts executed by the state and Indian tribes of this state pursuant to the Indian gaming regulatory act. THE DEPARTMENT OF GAMING DOES NOT HAVE AUTHORITY OR RESPONSIBILITY FOR THE REGULATION OF GAMING DEVICES THAT ARE REGULATED BY THE ARIZONA RACING COMMISSION PURSUANT TO CHAPTER 1, ARTICLE 1 OF THIS TITLE.

E. In carrying out its duties under tribal-state gaming compacts, the department of gaming is exempt from the rule making requirements of title 41, chapter 6.

F. Indian tribes of this state that have executed compacts with the state shall pay to the department of gaming their share of the regulatory costs necessary to carry out the duties required by any executed tribal-state compact authorized by the Indian gaming regulatory act. The department of gaming shall collect from each of the tribes that have executed a compact with the state their share of the costs incurred by the department pursuant to this chapter. The dates and methods of payment shall be as specified in the tribal-state compacts.

G. A permanent tribal-state compact fund is established consisting of monies received pursuant to subsection F of this section and other monies received pursuant to this chapter. The department of gaming shall administer the fund. The director of the department of gaming shall make an annual report to the governor, the president of the senate, the speaker of the house of representatives and each tribe which has executed a compact with the state disclosing in detail the activities of the department of gaming pursuant to this chapter including a full and complete statement of revenues deposited in and expenditures from the permanent tribal-state compact fund. Monies paid by the tribes PURSUANT TO SUBSECTION F OF THIS CHAPTER shall only be used for reimbursement of administrative and regulatory expenses incurred by the department pursuant to this chapter.

H. Monies deposited in the permanent tribal-state compact fund are subject to legislative appropriation. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

I. IN CONSIDERATION FOR THIS STATE ENTERING INTO TRIBAL-STATE COMPACTS FOR SUBSTANTIALLY MORE GAMING THAN IS REQUIRED OF THIS STATE BY THE INDIAN GAMING REGULATORY ACT OF 1988 AND IN CONSIDERATION FOR THE COMPACT TERMS PERMITTED BY SUBSECTION J, PARAGRAPH SUBDIVISIONS (E), (F), AND (G) AND PARAGRAPH 3 OF THIS SECTION, THIS STATE’S AGREEMENT TO THE EXECUTION, MODIFICATION, EXTENSION, OR RENEWAL OF A TRIBAL-STATE GAMING COMPACT INCLUDING ANY OF THE TERMS PERMITTED BY SUBSECTION J, PARAGRAPH 1, SUBDIVISIONS (E), (F), AND (G) AND PARAGRAPH 3 OF THIS SECTION SHALL BE CONDITIONAL ON INCLUSION IN THE COMPACT OF, APPROVAL BY THE SECRETARY OF THE INTERIOR OF AND COMPLIANCE WITH THE PROVISIONS REQUIRED IN PARAGRAPHS 2 AND 10 OF THIS SECTION.

I. J. TO PROVIDE A REGULATORY FRAMEWORK FOR INDIAN GAMING THAT IS INTENDED TO CONTINUE TO ENSURE THE FAIR AND HONEST OPERATION OF INDIAN GAMING, TO MAINTAIN THE INTEGRITY OF INDIAN GAMING AND TO PROTECT THE PUBLIC HEALTH, SAFETY AND WELFARE, any tribal-state gaming compact that is executed, modified, extended or renewed pursuant to this section shall include provisions that do all of the following PURSUANT TO AND CONSISTENT WITH THE INDIAN GAMING REGULATORY ACT:

1. PERMIT GAMING DEVICES AND ESTABLISH THAT THE NUMBER OF GAMING DEVICES THAT AN INDIAN TRIBE MAY OPERATE SHALL NOT EXCEED ONE THOUSAND GAMING DEVICES PER GAMING FACILITY AND SHALL LIMIT THE NUMBER OF GAMING DEVICES AND GAMING FACILITIES THAT MAY BE OPERATED BY AN INDIAN TRIBE AS FOLLOWS:

(a.) A TRIBE WITH AN OFFICIAL ENROLLMENT RESIDENT IN THIS STATE OF MORE THAN ONE BUT LESS THAN FOUR THOUSAND MAY OPERATE A MAXIMUM TOTAL OF SIX HUNDRED GAMING DEVICES AND MAY OPERATE GAMING DEVICES AT A MAXIMUM OF ONE GAMING FACILITY, EXCEPT THAT A TRIBE THAT WOULD BE ENTITLED TO OPERATE ONLY ONE GAMING FACILITY UNDER THIS SUBDIVISION BUT WAS OPERATING TWO GAMING FACILITIES ON AND AFTER APRIL 1, 2002 MAY CONTINUE OPERATING TWO GAMING FACILITIES BUT WITH NO MORE GAMING DEVICES THAN ARE ALLOWED IF THE TRIBE HAD ONLY ONE GAMING FACILITY.

(b.) A TRIBE WITH AN OFFICIAL TRIBAL ENROLLMENT RESIDENT IN THIS STATE OF FOUR THOUSAND OR MORE BUT LESS THAN EIGHT THOUSAND MAY OPERATE A MAXIMUM TOTAL OF ONE THOUSAND GAMING DEVICES AND MAY OPERATE GAMING DEVICES AT A MAXIMUM OF TWO GAMING FACILITIES.

(c.) A TRIBE WITH AN OFFICIAL TRIBAL ENROLLMENT RESIDENT IN THIS STATE OF EIGHT THOUSAND OR MORE BUT LESS THAN FIFTY THOUSAND RESIDENT ON TRIBAL LANDS MAY OPERATE A MAXIMUM TOTAL OF ONE THOUSAND FOUR HUNDRED GAMING DEVICES AND MAY OPERATE GAMING DEVICES AT A MAXIMUM OF THREE GAMING FACILITIES.

(d.) A TRIBE WITH AN OFFICIAL TRIBAL ENROLLMENT RESIDENT IN THIS STATE OF FIFTY THOUSAND OR MORE MAY OPERATE A MAXIMUM TOTAL OF TWO THOUSAND FOUR HUNDRED GAMING DEVICES AND MAY OPERATE GAMING DEVICES AT NO MORE THAN THREE GAMING FACILITIES.

(e.) IF AND AS LONG AS THE CONDITIONS OF SUBSECTION I OF THIS SECTION AND PARAGRAPHS 2 AND 10 OF THIS SUBSECTION ARE MET, A TRIBE MAY OPERATE GAMING DEVICES IN EXCESS OF THE TOTAL QUANTITY PRESCRIBED IN SUBDIVISIONS (A) THROUGH (D) OF THIS PARAGRAPH IF THE TRIBE HAS IN EFFECT AN AGREEMENT FOR TRANSFER OF EXCESS CAPACITY FROM ANOTHER TRIBE THAT HAS EXECUTED A COMPACT WITH THIS STATE, BUT UNDER NO CIRCUMSTANCES MAY A TRIBE OPERATE MORE THAN ONE THOUSAND GAMING DEVICES PER GAMING FACILITY OR OPERATE GAMING DEVICES AT MORE FACILITIES THAN ARE AUTHORIZED BY SUBDIVISIONS (A) THROUGH (D) OF THIS PARAGRAPH.

(f.) IF AND AS LONG AS THE CONDITIONS OF SUBSECTION I OF THIS SECTION AND PARAGRAPHS 2 AND 10 OF THIS SUBSECTION ARE MET, A TRIBE THAT IS OPERATING LESS THAN THE MAXIMUM NUMBER OF GAMING DEVICES MAY ENTER INTO AGREEMENTS TO TRANSFER THE EXCESS CAPACITY TO ANOTHER TRIBE IN THIS STATE THAT HAS EXECUTED A COMPACT WITH THIS STATE IN EXCHANGE FOR PAYMENT BY THE TRANSFERRING TRIBE. THE AGREEMENT MAY BE IN EFFECT ONLY AS LONG AS THE COMPACTS WITH THIS STATE OF BOTH THE TRANSFERRING TRIBE AND THE RECEIVING TRIBE ARE IN EFFECT. IF TRIBES ENTER INTO TRANSFER AGREEMENTS, THE RECEIVING TRIBE SHALL PAY THE TRANSFERRING TRIBE MONTHLY NOT LESS THAN ONE-HALF OF THE RECEIVING TRIBE’S AVERAGE MONTHLY GROSS GAMING REVENUE PER GAMING DEVICE FOR ALL GAMING DEVICES IN THE RECEIVING TRIBES GAMING FACILITY MULTIPLIED BY THE NUMBER OF GAMING DEVICES TRANSFERRED BY THE TRANSFERRING TRIBE OR SUCH GREATER AMOUNT AS THE TRANSFERRING TRIBE AND THE RECEIVING TRIBE MAY AGREE.

(g.) IF AND AS LONG AS THE CONDITIONS OF SUBSECTION I OF THIS SECTION AND PARAGRAPHS 2 AND 10 OF THIS SUBSECTION ARE MET, BEGINNING ON JULY 1, 2008, AND CONTINUING AT FIVE-YEAR INTERVALS THEREAFTER, THE MAXIMUM NUMBER OF GAMING DEVICES ALLOWED UNDER THIS PARAGRAPH MAY BE AUTOMATICALLY ADJUSTED BY THE PERCENTAGE CHANGE IN THE POPULATION OF THIS STATE COMPARED TO THE POPULATION OF THIS STATE DURING THE FIRST YEAR OF THE PREVIOUS FIVE-YEAR PERIOD AS ESTIMATED BY THE DEPARTMENT OF ECONOMIC SECURITY. THE DEPARTMENT OF GAMING SHALL NOTIFY EACH TRIBE THAT HAS A TRIBAL-STATE COMPACT OF THE AMOUNT OF EACH AUTOMATIC ADJUSTMENT MADE PURSUANT TO THIS PARAGRAPH.

(h.) FOR THE PURPOSE OF DETERMINING THE NUMBER OF GAMING DEVICES ALLOWED IN A GAMING FACILITY, A GAMING DEVICE CAPABLE OF BEING PLAYED BY MORE THAN ONE PERSON AT THE SAME TIME SHALL BE COUNTED AS ONE GAMING DEVICE FOR EACH PERSON WHO CAN PLAY THE GAMING DEVICE AT THE SAME TIME.

2. IN COMPACTS THAT INCLUDE ANY OF THE PROVISIONS PERMITTED BY PARAGRAPHS 1, SUBDIVISIONS (e), (f) OR (g) OR PARAGRAPH 3 OF THIS SUBSECTION, PROVIDE FOR THIS STATE TO RECEIVE EIGHT PER CENT OF EACH TRIBE'S GROSS GAMING REVENUE. FOR THE PURPOSES OF THESE PAYMENTS, ALL CALCULATIONS OF AMOUNTS DUE SHALL BE BASED ON THE MONTHLY ACTIVITY OF THE GAMING FACILITY. THE TRIBE SHALL MAKE MONTHLY PAYMENTS TO THIS STATE PURSUANT TO THESE TERMS NO LATER THAN TWENTY-FIVE DAYS AFTER THE LAST DAY OF EACH CALENDAR MONTH. ANY PAYMENTS DUE AND OWING FROM THE TRIBE IN THE MONTH THE COMPACT IS APPROVED, OR THE FINAL MONTH THE COMPACT IS IN EFFECT, SHALL REFLECT THE GROSS GAMING REVENUE, BUT ONLY FOR THE PORTION OF THE MONTH THAT THE COMPACT IS IN EFFECT. THE TRIBE'S OBLIGATION TO MAKE THE PAYMENTS UNDER THIS PARAGRAPH APPLIES AND CONTINUES AS LONG AS THERE IS A BINDING TRIBAL-STATE COMPACT IN EFFECT BETWEEN THE TRIBE AND THIS STATE AND AS LONG AS THE TRIBE CONTINUES ANY CLASS III OR POKER-STYLE GAMING AFTER THE COMPACT CEASES TO BE IN EFFECT.

3. PERMIT TRIBES TO CONDUCT CLASS III BLACKJACK, CLASS III POKER AND POKER THAT IS SUBJECT TO STATE MONITORING AND OVERSIGHT IF AND AS LONG AS THE CONDITIONS OF SUBSECTION I OF THIS SECTION AND PARAGRAPHS 2 AND 10 OF THIS SUBSECTION ARE MET, THE FOLLOWING LIMITATIONS SHALL APPLY:

(a.) CARD GAMES AUTHORIZED BY THE COMPACT SHALL BE LIMITED TO SEVENTY-FIVE TABLES FOR EACH GAMING FACILITY THAT IS LOCATED WITHIN FORTY MILES OF A MUNICIPALITY WITH A POPULATION OF MORE THAN FOUR HUNDRED THOUSAND PERSONS.

(b.) CARD GAMES AUTHORIZED BY THE COMPACT SHALL BE LIMITED TO FIFTY TABLES FOR EACH GAMING FACILITY AT ALL OTHER LOCATIONS.

(c.) AT THE TIME OF EACH FIVE-YEAR GAMING DEVICE ADJUSTMENT PURSUANT TO PARAGRAPH 1, SUBSECTION (g) OF THIS SUBSECTION, THE GOVERNOR SHALL NEGOTIATE WITHIN SIXTY DAYS AN INCREASE IN THE NUMBER OF TABLES FOR EACH GAMING FACILITY NOT TO EXCEED THE STATEWIDE POPULATION-BASED INCREASE DURING THE SAME ADJUSTMENT PERIOD.

4. NOT RESTRICT OR PREJUDICE THE PRIOR AND CONTINUING RIGHT OF AN INDIAN TRIBE TO APPLY FOR AND RECEIVE PERMITS UNDER THE LAWS OF THIS STATE FOR HORSE, HARNESS OR DOG RACING AT RACETRACK ENCLOSURES ON TRIBAL LANDS, TO CONDUCT PARI-MUTUEL WAGERING IN COMPLIANCE WITH THE PERMITS AND WITH ALL LAWS AND RULES OF THIS STATE AND TO CONTRACT WITH A COMMERCIAL RACING PERMITTEE FOR ADDITIONAL WAGERING FACILITIES ON LANDS OF THE TRIBE IF THE ADDITIONAL WAGERING FACILITIES ARE OPERATED IN ACCORDANCE WITH CHAPTER 1, ARTICLE 1 OF THIS TITLE.

5. PERMIT AN INDIAN TRIBE TO OPERATE RAFFLES ON SUBSTANTIALLY THE SAME TERMS AND SUBJECT TO SUBSTANTIALLY THE SAME LIMITATIONS AS RAFFLES ARE PERMITTED UNDER SECTION 13-3302, SUBSECTION B. NOTHING IN THIS SECTION SHALL LIMIT OR RESTRICT RAFFLES PERMITTED UNDER THAT SECTION.

6. PROHIBIT INDIAN TRIBES FROM OPERATING A LOTTERY WITH PAPER LOTTERY PRODUCTS THAT COMPETE WITH THE STATE LOTTERY BECAUSE THE STATE LOTTERY REVENUES ALREADY BENEFIT INDIANS, INDIAN TRIBES AND ALL OTHER PERSONS IN THIS STATE.

7. PROHIBIT INTERNET GAMING.

8. REQUIRE THAT ALL GAMING FACILITIES OF AN INDIAN TRIBE THAT BEGIN OPERATION AFTER APRIL 1, 2002 BE LOCATED ON TRIBAL LANDS OF THE TRIBE AND BE LOCATED NOT LESS THAN ONE AND ONE-HALF MILES APART.

9. PROHIBIT THE TRIBE FROM ENGAGING IN ANY ACTIVITIES DESIGNATED AS CLASS III GAMING UNDER THE INDIAN GAMING REGULATORY ACT OF 1988 EXCEPT THE FORMS OF CLASS III GAMING EXPRESSLY PERMITTED BY THIS SECTION.

10. PROHIBIT THE TRIBE FROM ENGAGING IN ANY ACTIVITIES DESIGNATED AS CLASS II GAMING UNDER THE INDIAN GAMING REGULATORY ACT OF 1988 EXCEPT CLASS II GAMES THAT ARE EXPLICITLY AUTHORIZED BY THE LAWS OF THIS STATE FOR ANY PERSON, ORGANIZATION OR ENTITY FOR ANY PURPOSE IF THE COMPACT CONTAINS ANY OF THE TERMS PERMITTED BY SUBDIVISIONS (e), (f) AND (g) OF PARAGRAPH 1 AND PARAGRAPH 3 OF SUBSECTION J OF THIS SECTION.

11. REQUIRE DAILY FINANCIAL REPORTING TO THE DEPARTMENT OF GAMING FOR THE OPERATION OF ALL GAMING FOR EACH GAMING FACILITY AND ANNUAL AUDITED FINANCIAL STATEMENTS FOR THE OPERATION OF ALL GAMING FOR EACH GAMING FACILITY, WHICH SHALL BE AVAILABLE FOR PUBLIC INSPECTION PURSUANT TO TITLE 39, CHAPTER 1, ARTICLE 2.

12. REQUIRE DISCLOSURE OF GROSS GAMING REVENUE FROM ALL TYPES OF GAMING AND CONTRIBUTIONS MADE TO THIS STATE BASED ON GAMING REVENUE THAT AT A MINIMUM IDENTIFIES THE GAMING REVENUE FOR EACH TRIBAL GAMING FACILITY BY GAMING ACTIVITY AND THE ANNUAL TOTAL CONTRIBUTION TO THIS STATE BY EACH TRIBAL GAMING FACILITY.

13. PROVIDE THAT THE COMPACT DOES NOT AMEND, ABROGATE OR RESTRICT THE LAWS OF THIS STATE.

14. REQUIRE THIS STATE AND THE TRIBE ENTERING INTO THE TRIBAL-STATE COMPACT TO CONSENT THAT ACTIONS AGAINST EACH OTHER FOR ENFORCEMENT OF THE COMPACT FOR MATERIAL BREACH OF THE COMPACT MAY BE HEARD IN THE COURTS OF THE UNITED STATES OR, IF THE COURTS OF THE UNITED STATES LACK JURISDICTION, IN THE COURTS OF THIS STATE.

15. REQUIRE TRIBES TO MAINTAIN LIABILITY INSURANCE COVERAGE WITH MINIMUM POLICY LIMITS OF FIVE MILLION DOLLARS PER OCCURRENCE FOR THE PROTECTION OF PATRONS WHO MAY BE HARMED OR INJURED IN CONNECTION WITH THE TRIBE’S ACTIVITIES RELATING TO THE OPERATION OF GAMING DEVICES AND GAMING FACILITIES AND TO PERMIT RECOURSE FOR SUCH INJURIES IN THE COURTS OF THIS STATE.

16. ESTABLISH PROCEDURES FOR TRIBAL JUDICIAL REVIEW OF DISPUTES REGARDING THE NONPAYMENT OF ALLEGED WINNINGS TO PATRONS.

17. REQUIRE COMPLIANCE WITH UNITED STATES PUBLIC HEALTH SERVICE REQUIREMENTS REGARDING FOOD AND BEVERAGE HANDLING.

18. REQUIRE INDIAN TRIBES TO COMPLY WITH BUILDING CODE AND FIRE SAFETY STANDARDS IN THE CONSTRUCTION OF NEW GAMING FACILITIES AND SIGNIFICANT MODIFICATIONS TO EXISTING GAMING FACILITIES.

19. REQUIRE THAT ADEQUATE POLICE, FIRE AND EMERGENCY MEDICAL SERVICES BE AVAILABLE TO SERVE EACH GAMING FACILITY.

20. REQUIRE INDIAN TRIBES TO NOTIFY SURROUNDING COMMUNITIES REGARDING NEW OR SUBSTANTIAL MODIFICATIONS TO GAMING FACILITIES AND TO DEVELOP PROCEDURES FOR CONSULTATION WITH SURROUNDING COMMUNITIES.

21. ESTABLISH STANDARDS FOR BACKGROUND INVESTIGATIONS, LICENSING AND CERTIFICATION OF GAMING EMPLOYEES BY THE INDIAN TRIBES AND THE DEPARTMENT OF GAMING.

22. ESTABLISH STANDARDS FOR BACKGROUND INVESTIGATIONS, LICENSING AND CERTIFICATION BY THE INDIAN TRIBES AND THE DEPARTMENT OF GAMING OF PERSONS OR ENTITIES THAT PROVIDE GAMING GOODS OR SERVICES ON A SIGNIFICANT BASIS.

23. REQUIRE MINIMUM INTERNAL CONTROL STANDARDS AND OPERATING PROCEDURES FOR GAMING AND AUTHORIZE AUDITS, INSPECTION AND ENFORCEMENT BY THE DEPARTMENT OF GAMING.

24. REQUIRE THE INDIAN TRIBE TO SUBMIT TO THE DEPARTMENT OF GAMING EITHER AN ANNUAL STATEMENT OF COMPLIANCE WITH THE INDIAN GAMING REGULATORY ACT REGARDING THE USE OF NET GAMING REVENUES OR A COPY OF THE INDIAN TRIBE’S CURRENT TRIBAL ORDINANCE REQUIRING THAT NET GAMING REVENUES BE USED ACCORDING TO THE INDIAN GAMING REGULATORY ACT.

1 25. Establish guidelines on automated teller machine use and on the use of credit cards or other forms of credit in gaming facilities.

2 26. Require the Indian tribe to post at all public entrances and exits to the gaming facilities signs that state that help is available if a person has a problem with gambling and the statewide toll free crisis hotline telephone number, established by the Arizona state lottery commission.

3 27. Prohibit gaming facility advertising and marketing that specifically appeal to minors. The provisions shall include guidelines for determining acceptable advertising and marketing.

4 28. Establish guidelines for the effective treatment and prevention of problem and pathological gambling.

5 29. Establish guidelines for voluntary ban procedures from all gaming facilities in the state, including but not limited to prohibiting the use of check cashing services, automatic teller machines, credit cards or other forms of credit offered at a gaming facility. A third person may not request a ban on behalf of another person.

30. REQUIRE WAGER LIMITS FOR ALL BLACKJACK GAMES, POKER GAMES AND CLASS III GAMING DEVICES AND PROVIDE FOR PERIODIC ADJUSTMENTS TO ACCOUNT FOR INFLATION.

31. PROVIDE FOR THE PHASE-IN OF A COMPUTERIZED JOINT MONITORING SYSTEM FOR CLASS III GAMING DEVICES IN ORDER TO PROVIDE AN EFFICIENT AND EFFECTIVE MEANS OF REGULATING CLASS III GAMING DEVICES AND TRACKING REVENUE FROM CLASS III GAMING DEVICES.

32. ESTABLISH TECHNICAL SPECIFICATIONS, TESTING PROCEDURES AND INSPECTION PROCEDURES FOR GAMING DEVICES.

33. ESTABLISH SURVEILLANCE REQUIREMENTS.

34. PERMIT ADDITIONAL REGULATION BY THE TRIBE THAT IS MORE STRINGENT THAN AND NOT IN CONFLICT WITH THE TERMS OF THIS SECTION OR THE TERMS OF THE COMPACT.

35. INCLUDE OTHER TERMS TO PROVIDE FOR EFFECTIVE REGULATION OF GAMING PERMITTED BY THIS SECTION AND BY THE COMPACT, PREVENTION OF CRIME, PROTECTION OF CONSUMERS AND ALL PERSONS IN CONNECTION WITH TRIBAL GAMING AND EFFECTUATION OF THE TERMS OF THIS SECTION AND THE TERMS OF THE COMPACT.

K. IN CARRYING OUT ITS DUTIES PRESCRIBED IN THE TRIBAL-STATE COMPACTS AND THIS CHAPTER, THE DEPARTMENT OF GAMING SHALL PROMOTE THE PUBLIC HEALTH, WELFARE AND SAFETY IN CONNECTION WITH INDIAN GAMING AND PREVENT CORRUPT INFLUENCES FROM INFILTRATING INDIAN GAMING. THE DEPARTMENT MAY ADOPT RULES TO CARRY OUT THE PURPOSES OF THIS CHAPTER. THE RULES SHALL BE CONSISTENT WITH THE PROVISIONS CONTAINED IN THE TRIBAL-STATE COMPACTS.

L. A TRIBAL-STATE GAMING COMPACT REVENUE SHARING FUND IS ESTABLISHED CONSISTING OF MONIES RECEIVED BY THIS STATE FROM ANY TRIBAL-STATE GAMING COMPACT REVENUE SHARING AGREEMENT PURSUANT TO SUBSECTION I AND SUBSECTION J OF THIS SECTION. THE STATE TREASURER SHALL ADMINISTER THE FUND. THE STATE TREASURER SHALL INVEST AND DIVEST MONIES IN THE FUND AS PROVIDED BY SECTION 35-313, AND MONIES EARNED FROM INVESTMENT SHALL BE CREDITED TO THE FUND. ON OR BEFORE THE TWENTIETH DAY OF EACH MONTH, THE STATE TREASURER SHALL DEPOSIT IN THE STATE GENERAL FUND THE MONIES IN THE TRIBAL-STATE GAMING COMPACT REVENUE SHARING FUND FROM THE PREVIOUS MONTH.

M. NOTHING IN THE AMENDMENTS TO THIS SECTION AUTHORIZES, RATIFIES OR VALIDATES ANY TRIBAL-STATE COMPACT MADE OR PURPORTEDLY MADE BEFORE APRIL 1, 2002.

N. ALL FORMS OF GAMING DESIGNATED AS CLASS II OR CLASS III GAMING UNDER THE INDIAN GAMING REGULATORY ACT OF 1988 THAT ARE NOT EXPRESSLY PERMITTED BY THE LAWS OF THIS STATE ON NOVEMBER 1, 2002 ARE PROHIBITED TO ALL PERSONS, ORGANIZATIONS, AND ENTITIES. EXCEPTIONS TO THIS PROHIBITION MAY BE ENACTED ONLY BY LAWS ENACTED BY A VOTE OF THE PEOPLE BY INITIATIVE OR BY REFERENDUM IN ACCORD WITH THE VOTER PROTECTION ACT, ARIZONA CONSTITUTION, ARTICLE 4, PART 1, SECTION 1, PARAGRAPH 6.

O. FOR THE PURPOSES OF THIS SECTION:

1. "GAMING DEVICE" MEANS A MECHANICAL DEVICE, AN ELECTROMECHANICAL DEVICE OR A DEVICE CONTROLLED BY AN ELECTRONIC MICROPROCESSOR OR ANOTHER MANNER, WHETHER THAT DEVICE CONSTITUTES CLASS II GAMING OR CLASS III GAMING, THAT ALLOWS A SINGLE PLAYER TO PLAY GAMES OF CHANCE, WHETHER OR NOT THE OUTCOME ALSO IS AFFECTED IN SOME PART BY SKILL, AND WHETHER THE DEVICE ACCEPTS COINS, TOKENS, BILLS, COUPONS, TICKET VOUCHERS, PULL TABS, SMART CARDS, ELECTRONIC IN-HOUSE ACCOUNTING SYSTEM CREDITS OR OTHER SIMILAR FORMS OF CONSIDERATION AND, THROUGH THE APPLICATION OF CHANCE, ALLOWS A PLAYER TO BECOME ENTITLED TO A PRIZE, WHICH MAY BE COLLECTED THROUGH THE DISPENSING OF COINS, TOKENS, BILLS, COUPONS, TICKET VOUCHERS, SMART CARDS, ELECTRONIC IN-HOUSE ACCOUNTING SYSTEM CREDITS OR OTHER SIMILAR FORMS OF VALUE. GAMING DEVICE DOES NOT INCLUDE ANY OF THE FOLLOWING:

(a.) THOSE TECHNOLOGICAL AIDS FOR BINGO GAMES THAT FUNCTION ONLY AS ELECTRONIC SUBSTITUTES FOR BINGO CARDS.

(b.) DEVICES THAT ISSUE AND VALIDATE PAPER LOTTERY PRODUCTS AND THAT ARE DIRECTLY OPERATED ONLY BY ARIZONA STATE LOTTERY LICENSED RETAILERS AND THEIR EMPLOYEES.

(c.) DEVICES THAT ARE OPERATED DIRECTLY BY A LOTTERY PLAYER AND THAT DISPENSE PAPER LOTTERY TICKETS, IF THE DEVICES DO NOT IDENTIFY WINNING OR LOSING LOTTERY TICKETS, DISPLAY LOTTERY WINNINGS OR DISBURSE LOTTERY WINNINGS.

(d.) DEVICES THAT ARE OPERATED DIRECTLY BY A LOTTERY PLAYER AND THAT VALIDATE PAPER LOTTERY TICKETS FOR A GAME THAT DOES NOT HAVE A PREDETERMINED NUMBER OF WINNING TICKETS, IF:

(i.) THE DEVICES DO NOT ALLOW INTERACTIVE GAMING.

(ii.) THE DEVICES DO NOT ALLOW A LOTTERY PLAYER TO PLAY THE LOTTERY FOR IMMEDIATE PAYMENT OR REWARD.

(iii.) THE DEVICES DO NOT DISBURSE LOTTERY WINNINGS.

(iv.) THE DEVICES ARE NOT VIDEO LOTTERY TERMINALS.

(e.) PLAYER ACTIVATED LOTTERY TERMINALS.

2. "GAMING FACILITY" MEANS THE BUILDINGS OR STRUCTURES WHERE GAMING IS CONDUCTED BY AN INDIAN TRIBE ON INDIAN LANDS.

3. "GROSS GAMING REVENUE" MEANS NET WIN, WHICH IS THE DIFFERENCE BETWEEN GAMING WINS AND LOSSES, BEFORE DEDUCTING COSTS AND EXPENSES.

Section 10. Repeal

Section 5-601.01, Arizona Revised Statutes is repealed.

Section 11. Racing commission; department of racing; use of monies

The sum of $10,000,000 is appropriated for fiscal year 2002-2003 to the racing commission and the department of racing from the state general fund to pay for the administrative costs and expenses of the commission and the department as prescribed in this act.

Section 12.  Blending authority

Pursuant to section 41-1304.03, Arizona Revised Statutes, the director of the Arizona legislative council may combine changes made to the Arizona Revised Statutes by this act with other non-conflicting changes to those statutes by other 2002 enactments.

Section 13. Severability

If a provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

Section 14. Conflict with other laws

A. If any part of this act conflicts with any law of this state in effect as of November 1, 2002, the provisions of this act shall prevail in all particulars as to which there is a conflict.

B. The provisions of this act are intended to conflict with any referendum or initiative relating to Indian gaming on the November 5, 2002, general election ballot, and the provisions of this act shall prevail in all particulars as to which there is a conflict.

Section 15. Sunset provisions; continuation

The people of the state of Arizona authorize the Legislature to determine whether or not to continue the Arizona Racing Commission and the Arizona Department of Racing and the provisions of Title 5, Chapter 1, as provided in Section 41-3008.13 beyond January 1, 2008 by enacting a measure as provided by Title 41, Chapter 27 without referring the matter to the voters for approval.