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Oregon Bulletin

July 1, 2011

 

Racing Commission
Chapter 462

Rule Caption: Proposed rulemaking will edit OARs to provide more detailed direction to licensees regarding regulatory expectations.

Adm. Order No.: RC 1-2011

Filed with Sec. of State: 6-6-2011

Certified to be Effective: 6-9-11

Notice Publication Date: 4-1-2011

Rules Amended: 462-210-0030, 462-210-0040, 462-220-0030

Subject: 462-210-0030 (Establishing an Account): Remove language pertaining to player account balance requirements.

      462-210-0040(3)(a)(A) (Operation of an Account): Amends the section to state, “Cash deposit made at an approved outlet, or other deposit mechanisms as approved by the commission.”

      462-210-0040(13) (Operation of an Account): Amends section to read, “Upon request by an account holder the account wagering center shall provide on an annual basis, at no cost, a written statement of an individual’s account activity. Unless written notice to the contrary is received by the account wagering center within fourteen (14) days of the date that any statement is sent to an account holder, the statement will be deemed accepted as correct.”

      462-220-0030(1) (Approval of the License for a Hub Operation): Adds (1)(a) and (1)(a)(A) which state: (1)(a) “A license may range from one to five years in length and the length should be so noted in the application submitted” and, (1)(a)(A) “The current, daily licensing fee is to be remitted no later than June 30th of each year licensing has been granted or is being requested.”

      462-220-0030(6)(a) (Approval of the License for a Hub Operation): Removes “FDIC” requirement and establishes new requirement for regulatory enforcement.

      462-220-0030(9) (Approval of the License for a Hub Operation): Amends 9(a)(b)(c) to read as follows:

      An applicant must provide the following to the commission:

      (a) Access to customer call monitoring, account holder detail, and electronic wagering data;

      (b) On site regulatory visits of the call center by authorized commission staff; and

      (c) Reimbursement to the commission for expenses associated with out-of-state regulatory visits.

      462-220-0030(10) (Approval of the License for a Hub Operation): Adds new sub-section (10) which reads: “An applicant must maintain all customer account related documentation for a period of not less than one year, and audio recording for a period of not less than three months.”

Rules Coordinator: Nancy A. Artmann—(971) 673-0211

462-210-0030

Establishing An Account

(1) An established account is necessary to place account wagers. An account may be established at either an account wagering center or by mail to a race meet licensee:

(a) For establishing the account with an account wagering center an application form must be signed or otherwise authorized in a manner acceptable to the commission and include:

(A) The applicant’s full legal name;

(B) Principal residence address;

(C) Telephone number; and

(D) Any other information required by the commission.

(b) Each application submitted will be subject to electronic verification with respect to name, principal residence address and date of birth by either a national, independent, individual reference service company or another technology which meets or exceeds the reliability, security, accuracy, privacy and timeliness provided by individual reference service companies. An account wagering center may require the applicant’s social security number to complete the verification process and for tax reporting purposes. If there is a discrepancy between the application submitted and the information provided by the electronic verification described above or if no information on the applicant is available from such electronic verification, another individual reference service may be accessed or another technology meeting the requirements described above may be used to verify the information provided. If these measures prove unsatisfactory, then the applicant will be contacted by the account wagering center and given instructions as to how to resolve the matter.

(c) All account holder identities must be verified via electronic means or copies of other documents before a wager can occur.

(2) Each account shall have an unique identifying account number. The identifying account number may be changed at any time by the account wagering center provided the account wagering center informs the account holder in writing prior to the change.

(3) The applicant shall supply the account wagering center with an alpha-numeric code, to be used as a secure personal identification code when the account holder is placing an account wager. The account holder has the right to change this code at any time.

(4) The account wagering center may not establish an account for any person whose principal residence address is not within the State of Oregon. The principal residence address shall be established by reliance on the information submitted on the application form provided and certified by the applicant.

(5) The holder of the account shall receive at the time the account is approved:

(a) Unique account identification number;

(b) Copy of the account wagering rules and such other information and material that is pertinent to the operation of the account; and

(c) Such other information as the account wagering center or commission may deem appropriate.

(6) The account wagering center shall accept accounts in the name of a natural person only.

(7) The account is nontransferable between natural persons.

(8) The account wagering center may close or refuse to open an account for what it deems good and sufficient reason, and shall order an account closed if it is determined that information that was used to open an account was false, or that the account has been used in violation of these rules.

Stat. Auth.: ORS 462.270(3) & 462.700

Stats. Implemented: ORS 462.142

Hist.: RC 3-2000, f. 3-27-00, cert. ef. 5-1-00; RC 1-2002, f. & cert. ef. 1-3-02; RC 3-2007, f. 3-29-07, cert. ef. 7-1-07; RC 1-2009, f. 4-21-09, cert. ef. 7-1-09; RC 1-2010, f. 9-23-10, cert. ef. 10-1-10; RC 1-2011, f. 6-6-11, cert. ef. 6-9-11

462-210-0040

Operation of an Account

(1) The account wagering center may refuse deposits to an account for what it deems good and sufficient reason.

(2) The account wagering center may suspend any account or close any account at any time provided that when an account is closed, the account wagering center shall, within five business days, return to the account holder all monies then on deposit by sending a check to the principal residence address as listed on the application.

(3) Credits to an account after the initial establishment of the account may be made as follows:

(a) Deposits to an account by an account holder shall be made in the following forms:

(A) Cash deposit made at an approved outlet, or other deposit mechanisms as approved by the commission; or

(B) Check, money order or negotiable order of withdrawal given or sent to an account wagering center; or

(C) Charges made to an account holder’s credit card or debit card upon the direct and personal instruction of the account holder, which may be given by telephone to the account wagering center by the account holder if the use of the card has been approved by the account wagering center; or

(D) Transfer by means of an electronic funds transfer from a monetary account controlled by an account holder to his/her account, said account holder to be liable for any charges imposed by the transmitting or receiving entity with such charges to be deducted from the account.

(E) Funds so deposited will be made available for wagering use in accordance with financial institution funds availability schedules.

(b) Credit for winnings from wagers placed with funds in an account and credit for account wagers on entries that are scratched shall be posted to the account by the account wagering center.

(c) For fees for service or other transaction-related charges by the race meet licensee and/or agent of the race meet licensee.

(4) Debits to an account shall be made as follows:

(a) Upon receipt by the account wagering center of an account wager, the account wagering center shall debit the account in the amount of the wager; or

(b) For fees for service or other transaction-related charges by the race meet licensee and/or agent of the race meet licensee; or

(c) An account wagering center may authorize a withdrawal from an account when one of the following exists:

(A) The account holder of an account appears personally at the account wagering center and provides the following:

(i) Proper identification;

(ii) The correct secure personal identification code; and

(iii) A properly completed and signed withdrawal slip.

(B) The account holder sends to the account wagering center a properly completed and signed withdrawal slip. Upon receipt of a properly completed and signed withdrawal slip, and if there are sufficient funds in the account to cover the withdrawal, the account wagering center shall, within five business days of its receipt, send a check to the account holder. The check shall be payable to the holder of the account and in the amount of the requested withdrawal. If funds are not sufficient to cover the withdrawal, the account holder will be notified in writing and those funds in the account will be withdrawn and sent to the account holder within the five-day time period. Electronic funds transfers may be used for withdrawals in lieu of a check at the discretion of the account holder and the account wagering center subject to the same conditions described for electronic funds transfer credits described in subsection (3)(a)(D) of this rule.

(d) The race meet licensee and/or the agent of the race meet licensee may close accounts in which there has been no activity for at least six (6) months, returning funds remaining therein to the account holder at his/her principal residence address.

(e) In the event an account holder is deceased, funds accrued in the account shall be released to the decedent’s legal representative upon receipt of a copy of a valid death certificate, tax releases or waivers, probate court authorizations or other documents required by applicable laws.

(5) The account wagering center shall not accept wagers from an account holder in an amount in excess of the account balance.

(6) Checks, money orders and other negotiable instruments shall be posted to the credit of the account holder in accordance with financial institution funds availability schedules.

(7) Monies deposited with the account wagering center for account wagering shall not bear any interest to the account holder.

(8) Account wagers shall be accepted during such time and on such days in such manner as designated by the commission.

(9) Notwithstanding any other rules, the managing employee of the account wagering center may at any time declare the account wagering center closed for receiving wagers on any pari-mutuel pool, race, group of races, or closed for all wagering. Anytime the account wagering center is closed during normal wagering hours by the managing employee a written report must be filed with the commission within forty-eight (48) hours.

(10) The account wagering center has the right at any time and for what it deems good and sufficient reason to refuse to accept all or part of any wager.

(11) Accounts are for the personal use of the account holder. The account holder is responsible for maintaining the secrecy of the account number and secure personal identification code. Except where the account wagering center or its employees or agents act without good faith or fail to exercise ordinary care, the account wagering center shall not be responsible for any loss arising from the use by any other person or persons of an account holder’s account. The account holder must immediately notify the account wagering center of a breach of the account’s security.

(12) Payment on winning pari-mutuel wagers and credits for account wagers on entries which are scratched shall be posted to the credit of the account holder as soon as practicable after the race is declared official.

(13) Upon request by an account holder the account wagering center shall provide on an annual basis, at no cost, a written statement of an individual’s account activity. Unless written notice to the contrary is received by the account wagering center within fourteen (14) days of the date that any statement is sent to an account holder, the statement will be deemed accepted as correct.

 (14) The principal residence address provided in writing by the account holder at the time of application is deemed to be the proper address for the purposes of mailing checks, statements of account, account withdrawals, notices, or other appropriate correspondence. The mailing of checks or other correspondence to the address given by the account holder shall be at the sole risk of the account holder.

(15) No employee or agent of the account wagering center shall divulge any confidential information related to the placing of any wager or any confidential information related to the operation of the account wagering center, except to the account holder as required by these rules, the commission, and as otherwise required by state or federal law, or the rules of racing of this state.

Stat. Auth.: ORS 462.270(3) & 462.700

Stats. Implemented: ORS 462.142

Hist.: RC 3-2000, f. 3-27-00, cert. ef. 5-1-00; RC 1-2002, f. & cert. ef. 1-3-02; RC 1-2011, f. 6-6-11, cert. ef. 6-9-11

462-220-0030

Approval of the License for a Hub Operation

(1) Prior to operating a hub the entity must apply for and be granted a license from the commission to conduct simulcasting and pari-mutuel wagering in accordance with ORS 462.725 and these rules as a “Multi-Jurisdictional Simulcasting and Interactive Wagering Totalizator Hub.”

(a) A license may range from one to five years in length and the length should be so noted in the application submitted.

(b) The current, daily licensing fee is to be remitted no later than June 30th of each year licensing has been granted or is being requested.

(2) An applicant for a “Multi-Jurisdictional Simulcasting and Interactive Wagering Totalizator Hub” license must provide the following information as part of the application thirty days prior to the scheduled commission meeting at which the application is to be presented:

(a) The applicant’s legal name;

(b) If the applicant is a corporation, the names, addresses, dates of birth of its shareholders, directors and officers; if a shareholder is a corporation the date of incorporation, the place of incorporation and the names, addresses, and dates of birth of its shareholders, directors and officers must be provided;

(c) If the applicant is a partnership the names, addresses, dates of birth of the partners; if a partner is a corporation the date of incorporation, the place of incorporation and the names, addresses, and dates of birth of its share holders must be provided;

(d) If the applicant is a corporation ultimately owned by a not-for-profit entity without any shareholders, or is a publicly traded corporation, the information required in subsection (2)(b) and (2)(c) of this rule shall be required from the directors of the membership organization, or the directors and officers of the publicly traded corporation, in lieu of the shareholders;

(e) The names of the race tracks the applicant, or its agent, has contracts with that allow the applicant to provide the simulcast signals and pari-mutuel wagering on the product;

(f) Financial information from the applicant that demonstrates whether the applicant has the financial resources to install and operate a hub;

(g) A detailed budget showing anticipated revenue, expenditures and cash flows by month, from the hub’s operation during the license period;

(h) The number of days that the applicant is planning to operate the hub during the fiscal year in which they are seeking to be licensed;

(i) A list of all hub personnel containing the name, position, job location, license number and expiration date. All current gaming licenses should be listed, regardless of jurisdiction;

(j) A chart illustrating the organizational structure, including reporting lines;

(k) A list of all states where the hub is operating; and

(l) Documentation of proper filing that the Hub applicant and/or parent company is registered to do business in the state of Oregon.

(3) As part of the application for licensure as a hub, the applicant shall submit a detailed plan of operations in a format and containing such information as required by the commission. At a minimum, the operating plan shall address the following issues:

(a) The manner in which the proposed simulcasting and wagering system will operate;

(b) The requirements for a “qualified subscriber based service” or “closed loop subscriber based system” set out in OAR 462-220-0010(2);

(c) Programs for responsible wagering;

(d) Mitigation for the effects of account wagering on the source market in Oregon. In addition to the source market mitigation plan as outlined in the application, more detailed source market information shall be provided by the hub at the commission’s request. A mitigation plan must include one of the following options:

(A) An agreement with a state commercial race meet licensee as defined in ORS 462.062, a copy of which has been submitted to the commission; or

(B) A written agreement with the Oregon HBPA, a copy of which has been submitted to the commission; or

(C) A written plan submitted to, and approved by, the commission that mitigates the effect of account wagering and provides equitable compensation to the commercial race meet licensee as defined in ORS 462.062. Source market fees shall be paid statewide on Oregon accounts. Accounts must be available to Oregon residents if a hub is licensed in Oregon.

(e) The requirements for accounts established and operated for persons whose principal residence is outside of the state of Oregon. The commission may require changes in a proposed plan of operations as a condition of granting a license. No subsequent changes in the system’s operation may occur unless ordered by the commission or until approval is obtained from the commission after it receives a written request.

(f) A list of any affiliate sites or potential affiliate sites of the hub. The operating plan must provide the following information and meet the following affiliate guidelines:

(A) The name and web address of the affiliate site.

(B) The person or companies involved in the affiliate agreement.

(C) That the affiliate site agreement is clearly noted as either a marketing or service agreement.

(D) Customers using the affiliate site will be customers of the licensed hub, subject to the same verification process and account operational procedures as any other customer of said hub licensee.

(E) The wagers placed through the affiliate site will be processed through equipment owned and operated by the licensed hub and their commission approved tote provider.

(F) The commission approved totalizator provider will incorporate the handle of the affiliate site into the handle report for the licensed hub, or generate a separate daily report for this handle. In either case, the handle will count as part of the hub licensee’s handle, and the hub licensee will be responsible for all taxes on the handle generated from their own site and any affiliate sites.

(G) The affiliate site will be branded in some form to indicate to the customer that they will be wagering through systems operated by the licensed hub. The commission reserves the right to approve or deny any affiliate sites. Additionally, the commission may determine a handle level at which an affiliate site may need to apply for its own hub license, or at which the hub licensee must be subject to the tax rate described in OAR 462-220-0040(3)(c).

(4) The commission may conduct investigations or inspections or request additional information from the applicant as it deems appropriate in determining whether to approve the license application.

(5) The fee of $200 per day that the hub is scheduled to operate must accompany the application. If the license is denied by the commission the fee will be refunded less the amount equal to the amount that the commission expended in conducting investigations and inspections which was in excess of the expenses that would have otherwise been incurred by the commission.

(6) To ensure that the funds of an applicant’s account holders will be properly held and maintained by the applicant:

(a) The applicant must provide evidence to the commission that the applicant has established a segregated account (the Bank Account) in which all funds of its account holders will be deposited in an insured account, approved by the commission, solely for the benefit of the account holders:

(A) No hub shall use the funds deposited in the Bank Account for any purpose except to facilitate the wagering activities and other instructions or agreements of account holders. The funds of an account holder held in the Bank Account shall remain the property of the account holder for all purposes until wagered by the account holder or otherwise withdrawn or used in accordance with the account holder’s instruction or agreement;

(B) The hub shall maintain a record of each deposit, withdrawal or other use of funds held in the Bank Account for each account holder (the Customer Record);

(C) Any account holder, who claims that any credit or debit to his or her Customer Record is incorrect or who claims that any deposit, withdrawal or use of the account holder’s funds is incorrect, may file a claim with the commission. The commission shall investigate all claims and provide the hub with an opportunity to respond to such claim. The hub may submit any information, documentation or other evidence supporting its position with respect to the claim. If the commission determines that the Customer Record is incorrect or that any deposit, withdrawal or use of an account holder’s funds was incorrect, the hub shall have 10 days to correct same as instructed by the commission. Such correction may require the hub to correct the Customer Record for the account holder, to deposit additional funds into the Bank Account for the account holder, to remit funds directly to the account holder, or any combination thereof.

(b) The applicant must provide a $50,000 irrevocable bond, letter of credit, or other security instrument to the commission, in a form acceptable to the commission, which designates the commission as the beneficiary thereof (the Security Instrument). The Security Instrument shall permit the commission to make draws to cover such amounts as the commission finds is necessary. For example, if a hub fails to deposit funds into the Bank Account for an account holder or to remit funds directly to the account holder, as described in subsection 6(a)(C) above, within 10 days of the commission’s decision, the commission may draw down on or take other appropriate action against the Security Instrument to ensure the account holder is immediately made whole.

(7) An applicant licensed under this section may enter into such agreements, as for what it deems good and sufficient reasons, that are necessary to promote, advertise and further the sport of racing or that may be necessary for the effective operation of interstate account wagering, including, without limitation, television production and telecommunications services.

(8) An applicant must maintain an operational presence within the State of Oregon. A call center for customer wagering, a sub-contract with an existing call center for customer wagering, or a business office is required. In addition, totalizator equipment must be located in Oregon, and services must be provided by a totalizator vendor identified in the hub operating plan as approved by the commission.

(9) An applicant must provide the following to the commission:

(a) Access to customer call monitoring, account holder detail, and electronic wagering data;

(b) On site regulatory visits of the call center by authorized commission staff; and

(c) Reimbursement to the commission for expenses associated with out-of-state regulatory visits.

(10) An applicant must maintain all customer account-related documentation for a period of not less than one year, and audio recording for a period of not less than three months.

Stat. Auth.: ORS 462.270(3) & 462.725

Stats. Implemented: ORS 462.725

Hist.: RC 3-2000, f. 3-27-00, cert. ef. 5-1-00; RC 3-2007, f. 3-29-07, cert. ef. 7-1-07; RC 1-2009, f. 4-21-09, cert. ef. 7-1-09; RC 1-2010, f. 9-23-10, cert. ef. 10-1-10; RC 1-2011, f. 6-6-11, cert. ef. 6-9-11

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2010.

2.) Copyright 2011 Oregon Secretary of State: Terms and Conditions of Use

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