# Title 53 — Sports and Amusements

## Chapter 53-06.2 — Pari-Mutuel Horse Racing

### § 53-06.2-01. Definitions.

As used in this chapter:
1. "Breeders' fund" means a fund, administered by the commission, established to
financially reward breeders or owners of North Dakota-bred horses to be paid in
accordance with rules as approved by the commission.
2. "Certificate system" means the system of betting described in section 53-06.2-10.
3. "Charitable organization" means a nonprofit organization operated for the relief of
poverty, distress, or other conditions of public concern in this state and has been so
engaged in this state for at least two years.
4. "Civic and service club" means a branch, lodge, or chapter of a nonprofit national or
state organization that is authorized by its written constitution, charter, articles of
incorporation, or bylaws to engage in a civic or service purpose in this state and has
so existed in this state for at least two years. The term includes a similar local nonprofit
organization, not affiliated with a state or national organization, which is so recognized
by a resolution adopted by the governing body of the local jurisdiction in which the
organization conducts its principal activities, and which has existed in this state for at
least two years.
5. "Commission" means the North Dakota racing commission.
6. "Executive director" means the executive director of the commission.
7. "Fraternal organization" means a nonprofit organization in this state, which is a branch,
lodge, or chapter of a national or state organization and exists for the common
business, brotherhood, or other interests of its members, and has so existed in this
state for two years. The term does not include a college or high school fraternity.
8. "Local jurisdiction" means, with respect to a site inside the city limits of a city, that city,
and with respect to a site not inside the city limits of a city, the county in which the site
is located.
9. "Other public-spirited organization" means a nonprofit organization recognized by the
governing body of the appropriate local jurisdiction by resolution as public-spirited and
eligible under this chapter.
10. "Purse fund" means a fund, administered by the commission, established to
supplement and improve purses offered at racetracks within the state.
11. "Racing" means live or simulcast horse racing under the certificate system or simulcast
dog racing under the certificate system.
12. "Racing promotion fund" means a fund administered by the commission established to
assist in improving and upgrading racetracks in the state, promoting horse racing in
the state, and developing new racetracks in the state as necessary and approved by
the commission.
13. "Religious organization" means a nonprofit organization, church, body of
communicants, or group gathered in common membership for mutual support and
edification in piety, worship, and religious observances, and which has been so
gathered or united in this state for at least two years.
14. "Veterans' organization" means a congressionally chartered organization in this state,
or a branch, lodge, or chapter of a nonprofit national or state organization in this state,
the membership of which consists of individuals who were members of the armed
services or forces of the United States, and which has so been in existence in this
state for at least two years.
### § 53-06.2-02. Racing commission - Members - Appointment - Term - Qualifications -

Compensation.
1. A North Dakota racing commission is established consisting of the chairman and four
other members appointed by the governor. One of the members must be appointed
from a list of four nominees, one of whom is nominated by the state chapter or affiliate
of the American quarter horse racing association, one of whom is nominated by the

state chapter or affiliate of the United States trotting association, one of whom is
nominated by the state chapter or affiliate of the international Arabian horse
association, and one of whom is nominated by the state chapter or affiliate of the North
Dakota thoroughbred association. The members serve five-year terms and until a
successor is appointed and qualified. A member appointed to fill a vacancy arising
from other than the natural expiration of a term serves for the unexpired portion of the
term and may be reappointed. The terms of the commissioners must be staggered so
that one term expires each July first. At the expiration of the five-year term of each
incumbent member of the commission, the governor shall appoint a new member to
the commission.
2. A person is ineligible for appointment to the commission if that person has not been a
resident of this state for at least two years before the date of appointment. A person is
also ineligible if that person is not of such character and reputation as to promote
public confidence in the administration of racing in this state. A person who has a
financial interest in racing cannot be a member of the commission and cannot be
employed by the commission. Failure to maintain compliance with this subsection is
grounds for removal from the commission or from employment with the commission.
For purposes of this section, a person has a financial interest in racing if that person
has an ownership interest in horses running at live or simulcast meets conducted or
shown in this state subject to this chapter or rules of the commission, is required to be
licensed under this chapter or the rules of the commission, or who derives any direct
financial benefit from racing, individually or by or through an entity or other person, as
regulated by this chapter or the rules of the commission.
3. Commission members are entitled to seventy-five dollars per day for compensation,
and mileage and expense reimbursement as allowed to other state employees.
### § 53-06.2-03. Executive director of racing - Appointment - Qualifications - Salary -

Duties - Other personnel.
1. The commission shall appoint an executive director of racing. The commission shall
establish the executive director's qualifications and salary.
2. The executive director shall devote such time to the duties of the office as the
commission may prescribe. The executive director is the executive officer of the
commission and shall enforce the rules and orders of the commission. The executive
director shall perform other duties the commission prescribes.
3. The executive director may employ other persons as authorized by the commission.
### § 53-06.2-04. Duties of commission.

The commission shall:
1. Provide for racing under the certificate system.
2. Set racing dates.
3. Adopt rules for effectively preventing the use of any substance, compound items, or
combinations of any medicine, narcotic, stimulant, depressant, or anesthetic which
could alter the normal performance of a racehorse, unless specifically authorized by
the commission.
4. Supervise and check the making of pari-mutuel pools, pari-mutuel machines, and
equipment at all races held under the certificate system.
5. Adopt rules governing, restricting, or regulating bids on licensees' concessions and
leases on equipment.
6. Consider all proposed extensions, additions, or improvements to the buildings, stables,
or tracks on property owned or leased by a licensee.
7. Exclude from racetracks or simulcast pari-mutuel wagering facilities any person who
violates any rule of the commission or any law.
8. Determine the cost of inspections performed under subsection 3 of section 53-06.2-05
and require the licensee to pay that cost.
9. Report biennially to the legislative council regarding the operation of the commission.

10. Provide notice to the North Dakota horsemen's council of meetings held by the
commission and permit the North Dakota horsemen's council to participate in the
meetings through placement of items on the agenda.
11. Complete, distribute, and post on the commission's website the minutes of each
commission meeting within thirty days of that meeting or before the next meeting of
the commission, whichever occurs first.
### § 53-06.2-04.1. North Dakota-bred registry.

The commission shall provide for registration of a North Dakota-bred horse for qualification
for breeders' fund awards or purse supplements. The administrative cost must be paid from the
breeders' fund.
### § 53-06.2-05. Powers of commission.

The commission may:
1. Compel the production of all documents showing the receipts and disbursements of
any licensee and determine the manner in which such financial records are to be kept.
2. Investigate the operations of any licensee and enter any vehicle or place of business,
residence, storage, or racing of any licensee on the grounds of a licensed association
to determine whether there has been compliance with the provisions of this chapter
and rules adopted under this chapter, and to discover and seize any evidence of
noncompliance.
3. Request appropriate state officials to perform inspections necessary for the health and
safety of spectators, employees, participants, and horses that are lawfully on a
racetrack.
4. License all participants in the racing and simulcast pari-mutuel wagering industry and
require and obtain information the commission deems necessary from license
applicants. Licensure of service providers, totalizator companies, site operators, and
organizations applying to conduct or conducting pari-mutuel wagering must be
approved by the attorney general. The attorney general may not grant a license denied
by the commission. The commission may obtain a statewide and nationwide criminal
history record check from the bureau of criminal investigation for the purpose of
determining suitability or fitness for a license. The nationwide check must be
conducted in the manner provided in section 12-60-24. All costs associated with
obtaining a background check are the responsibility of the applicant for a license.
5. Receive moneys from the North Dakota horse racing foundation for deposit in the
purse fund, breeders' fund, or racing promotion fund in accordance with subsection 6
of section 53-06.2-11.
6. Adopt additional rules for the administration, implementation, and regulation of
activities conducted pursuant to this chapter. The commission shall deposit any fees
collected under authority of this subsection in the racing commission operating fund.
Subject to legislative appropriation, the commission may spend the fees for operating
costs of the commission.
### § 53-06.2-06. Organizations eligible to conduct racing and simulcast pari-mutuel

wagering.
Civic and service clubs; charitable, fraternal, religious, and veterans' organizations; and
other public-spirited organizations may be licensed to conduct racing and simulcast pari-mutuel
wagering as authorized by this chapter.
### § 53-06.2-07. Issuance of licenses - Applications.

1. On compliance by an applicant with this chapter and the approval of the attorney
general, the commission may issue a license to conduct races. The attorney general
may not grant a license denied by the commission.
2. An application for a license to conduct a racing meet must be signed under oath and
filed with the commission. The application must contain at least the following:

a. The name and post-office address of the applicant.
b. The location of the racetrack and whether it is owned or leased. If the racetrack is
leased, a copy of the lease must be included.
c. A statement of the applicant's previous history and association sufficient to
establish that the applicant is an eligible organization.
d. The time, place, and number of days the racing meet is proposed to be
conducted.
e. The type of racing to be conducted.
f. Other information the commission requires.
3. At least thirty days before the commission issues or renews a license to conduct
races, the applicant shall deliver a complete copy of the application to the local
jurisdiction governing body. The application to the commission must include a
certificate verified by a representative of the applicant, indicating delivery of the
application copy to the governing body. If the governing body of the local jurisdiction
adopts a resolution disapproving the application for license or renewal and so informs
the executive director within thirty days of receiving a copy of the application, the
license to conduct races may not be issued or renewed.
### § 53-06.2-08. License authorization and fees.

1. Each license issued under the certificate system must describe the place, track, or
racecourse at which the licensee may hold races. Every license must specify the
number of days the licensed races may continue, the hours during which racing may
be conducted, and the number of races that may be held each day. Races authorized
under this chapter may be held during the hours approved by the commission and
within the hours permitted by state law.
2. The commission may charge a license fee for racing commensurate with the size and
attendance of the race meet.
3. Each applicant for a license under this chapter shall give bond or a letter of credit
payable to this state with good security as approved by the commission. The bond or
letter of credit must be in the amount the commission determines will adequately
protect the amount normally due and owing to this state in a regular payment period
or, in the case of new or altered conditions, based on the projected revenues.
4. The commission may grant licenses to horse owners, jockeys, riders, agents, trainers,
grooms, stable foremen, exercise workers, veterinarians, valets, concessionaires,
service providers, employees of racing associations, and such other persons as
determined by the commission. Licensure of service providers, totalizator companies,
site operators, and organizations applying to conduct or conducting pari-mutuel
wagering must be approved by the attorney general. The attorney general may not
grant a license denied by the commission. License fees are as established by the
commission.
5. The commission may establish the period of time for which licenses issued under this
chapter are valid.
6. The commission shall deposit all fees collected under this section in the racing
commission operating fund. Subject to legislative appropriation, the commission may
spend the fees for operating costs of the commission.
### § 53-06.2-09. Allotment of racing days.

If an applicant is eligible to receive a license under this chapter, the commission shall fix the
racing days that are allotted to that applicant and issue a license for the holding of racing meets.
### § 53-06.2-10. Certificate system - Rules.

The certificate system allows a licensee to receive money from any person present at a live
horse race, simulcast horse race, or simulcast dog race who desires to bet on any entry in that
race. A person betting on an entry to win acquires an interest in the total money bet on all
entries in the race, in proportion to the amount of money bet by that person, under rules

adopted by the commission. The licensee shall receive the bets and for each bet shall issue a
certificate to the bettor on which is at least shown the number of the race, the amount bet, and
the number or name of the entry selected by the bettor. The commission may adopt rules for
place, show, quinella, combination, or other types of betting usually connected with racing.
### § 53-06.2-10.1. Simulcast wagering.

In addition to racing under the certificate system, as authorized by this chapter, and
conducted upon the premises of a racetrack, simulcast pari-mutuel and account wagering may
be conducted in accordance with this chapter or rules adopted by the commission under this
chapter in accordance with chapter 28-32. Any organization qualified under section 53-06.2-06
to conduct racing may make written application to the commission for the conduct of simulcast
pari-mutuel and account wagering on races held at licensed racetracks inside the state or
racetracks outside the state, or both. Licensure of service providers, totalizator companies, site
operators, or organizations applying to conduct or conducting simulcast or account wagering
must be approved by the attorney general. The attorney general may not grant a license denied
by the commission. Notwithstanding any other provision of this chapter, the commission may
authorize any licensee to participate in interstate or international combined wagering pools with
one or more other racing jurisdictions. Anytime that a licensee participates in an interstate or
international combined pool, the licensee, as prescribed by the commission, may adopt the
take-out of the host jurisdiction or facility. The commission may permit a licensee to use one or
more of its races or simulcast programs for an interstate or international combined wagering
pool at locations outside its jurisdiction and may allow pari-mutuel pools in other states to be
combined with pari-mutuel pools in its jurisdiction for the purpose of establishing an interstate or
international combined wagering pool. The participation by a licensee in a combined interstate
or international wagering pool does not cause that licensee to be considered to be doing
business in any jurisdiction other than the jurisdiction in which the licensee is physically located.
Pari-mutuel taxes or commissions may not be imposed on any amounts wagered in an
interstate or international combined wagering pool other than amounts wagered within this
jurisdiction. The certificate system also permits pari-mutuel wagering to be conducted through
account wagering. As used in this section, "account wagering" means a form of pari-mutuel
wagering in which an individual deposits money in an account and uses the account balance to
pay for pari-mutuel wagers. An account wager made on an account established in this state may
only be made through the licensed simulcast service provider approved by the attorney general
and authorized by the commission to operate the simulcast pari-mutuel wagering system under
the certificate system. The attorney general may not grant a license denied by the commission.
An account wager may be made in person, by direct telephone communication, or through other
electronic communication in accordance with rules adopted by the commission. Breakage for
interstate or international combined wagering pools must be calculated in accordance with the
statutes or rules of the host jurisdiction and must be distributed among the participating
jurisdictions in a manner agreed to among the jurisdictions.
### § 53-06.2-11. Bet payoff formulas - Uses by licensee of funds in excess of expenses -

Payment to general fund.
1. For wagering on live horse racing:
a. In win, place, and show pari-mutuel pools, the licensee may deduct no more than
twenty percent of the amount wagered. Of the amount wagered, the licensee
shall pay:
(1) One-half of one percent to the state treasurer to be deposited in the general
fund.
(2) One-half of one percent to the commission to be deposited in the breeders'
fund.
(3) One-half of one percent to the commission to be deposited in the purse
fund.
(4) One-half of one percent to the commission to be deposited in the racing
promotion fund.

b. In daily double, quinella, exacta, trifecta, or other combination pari-mutuel pools,
the licensee may deduct no more than twenty-five percent of the amount
wagered. Of the amount wagered, the licensee shall pay:
(1) One-half of one percent to the state treasurer to be deposited in the general
fund.
(2) One-half of one percent to the commission to be deposited in the breeders'
fund.
(3) One-half of one percent to the commission to be deposited in the purse
fund.
(4) One-half of one percent to the commission to be deposited in the racing
promotion fund.
2. For simulcast and account wagering:
a. In win, place, and show pari-mutuel pools, the licensee may deduct no more than
twenty percent of the amount wagered. Except as limited in subdivision c, of the
amount wagered by simulcast and account wagering in win, place, and show
pari-mutuel pools, the licensee shall pay:
(1) One-sixteenth of one percent to the state treasurer to be deposited in the
general fund.
(2) One-sixteenth of one percent to the commission to be deposited in the
breeders' fund.
(3) One-sixteenth of one percent to the commission to be deposited in the
purse fund.
(4) One-sixteenth of one percent to the commission to be deposited in the
racing promotion fund.
b. Except as limited in subdivision c, of the amount wagered by simulcast and
account wagering in daily double, quinella, exacta, trifecta, or other combination
pari-mutuel pools, the licensee shall pay:
(1) One-sixteenth of one percent to the state treasurer to be deposited in the
general fund.
(2) One-sixteenth of one percent to the commission to be deposited in the
breeders' fund.
(3) One-sixteenth of one percent to the commission to be deposited in the
purse fund.
(4) One-sixteenth of one percent to the commission to be deposited in the
racing promotion fund.
c. For the fiscal year commencing July 1, 2013, the licensee may not pay more than
four hundred thousand dollars. For the fiscal year commencing July 1, 2014, and
thereafter, the licensee may not pay more than four hundred twenty thousand
dollars.
3. For all pari-mutuel wagering the licensee shall pay to the commission the amount due
for all unclaimed tickets and all breakage on the first twenty million dollars wagered in
each fiscal year with each service provider. The amount received must be deposited in
the racing promotion fund.
4. The licensee conducting wagering on live racing, simulcast wagering, or account
wagering shall retain all other money in the pari-mutuel pool and pay it to bettors
holding winning tickets as provided by rules adopted by the commission.
5. A licensee may not use any of the portion deducted for expenses under subsections 1
and 2 for expenses not directly incurred by the licensee in conducting pari-mutuel
racing under the certificate system. After paying qualifying expenses, the licensee shall
use the remainder of the amount so withheld only for eligible uses allowed to
charitable gambling organizations under section 53-06.1-11.1.
6. The commission shall deposit the moneys received pursuant to subsections 1, 2, and
3 and from the North Dakota horse racing foundation pursuant to subsection 5 of
section 53-06.2-05 in the breeders' fund, the purse fund, and the racing promotion
fund. Moneys, and any earnings on the moneys, in the breeders' fund, purse fund, and
racing promotion fund are appropriated to the commission on a continuing basis to

carry out the purposes of those funds under this chapter and must be administered
and disbursed in accordance with rules adopted by the commission. The commission
may not transfer money among the funds. The commission shall distribute in-state
awards and payment supplements from the breeders' fund in the same calendar year
the money was earned by the recipient. The commission shall distribute out-of-state
awards and payment supplements from the breeders' fund, if made available by the
commission, within two months of the end of the calendar year the money was earned
by the recipient. The commission shall distribute payments awarded to qualified
owners and breeders from the breeders' fund without requiring owners and breeders to
apply for the payments. The commission may receive twenty-five thousand dollars per
year or twenty-five percent per year, whichever is greater, from the racing promotion
fund for the payment of the commission's operating expenses.
### § 53-06.2-12. Audits and investigations by state auditor.

On request of the commission, the state auditor shall conduct audits and investigate the
operations of any licensee. The commission shall reimburse the state auditor for all services
rendered.
### § 53-06.2-13. Duty of attorney general to participate in certain hearings and to conduct

investigations - Employment of private counsel by commission.
1. The attorney general shall represent the state in all hearings before the commission
and shall prosecute all criminal proceedings arising from violations of this chapter. The
attorney general may require payment for any services rendered to the racing
commission. Payment for the services must be deposited in the attorney general's
operating fund. The commission may employ private counsel for adoption of rules and
to ensure that its hearings are conducted fairly.
2. a. The attorney general may audit and investigate service providers, totalizator
companies, site operators, or organizations applying to conduct or conducting
pari-mutuel wagering. The attorney general may:
(1) Inspect all sites in which pari-mutuel wagering is conducted.
(2) Inspect all pari-mutuel wagering equipment and supplies.
(3) Seize, remove, or impound any pari-mutuel equipment, supplies, or books
and records for the purpose of examination and inspection.
(4) Inspect, examine, photocopy, and audit all books and records.
b. The commission shall reimburse the attorney general for auditing and
investigation. Payment for auditing and investigation must be deposited in the
attorney general's operating fund.
### § 53-06.2-14. Denial, suspension, and revocation of licenses - Reasons.

The commission may deny, suspend, or revoke licenses under the certificate system and
privileges granted by it, and it may terminate racing privileges for just cause. Actions constituting
just cause include:
1. Any action or attempted action by a person contrary to any law.
2. Corrupt practices, which include:
a. Prearranging or attempting to prearrange the order of finish of a race.
b. Failing to properly pay winnings to a bettor or to properly return change to a
bettor purchasing a ticket.
c. Falsifying or manipulating the odds on any entrant in a race.
3. Any violation of the rules of racing adopted by the commission.
4. Willful falsification or misstatement of fact in an application for racing privileges.
5. Material false statement to a racing official or to the commission.
6. Willful disobedience of a commission order or of a lawful order of a racing official other
than a commission member.
7. Continued failure or inability to meet financial obligations connected with racing meets.
8. Failure or inability to properly maintain a racetrack.

### § 53-06.2-15. Revocation, suspension, fine - Procedure.

The commission, on proof of violation by a licensee, its agents or employees, of this chapter
or any rule adopted by the commission may, on reasonable notice to the licensee and after
giving the licensee an opportunity to be heard, fine the licensee or revoke or suspend the
license. If the license is revoked, the licensee is not eligible to receive another license within
twelve months from the date of revocation. Every decision or order of the commission must be
made in writing and filed with the executive director for preservation as a permanent record of
the commission. The decision must be signed by the chairman, attested by the executive
director, and dated.
### § 53-06.2-16. Prohibited acts - Penalties.

1. No person may conduct a pari-mutuel horse race unless that person is licensed by the
commission. Violation of this subsection is a class A misdemeanor.
2. No person may prearrange or attempt to prearrange the order of finish of a race.
Violation of this subsection is a class C felony.
