PART II. CONDUCT OF SLOT MACHINE GAMING ACTIVITY

SUBPART A. AUTHORIZED ACTIVITY AND REQUIRED ACTIONS

§361. Conduct of slot machine gaming; temporary conduct

            A. Subject to the limitation in Subsection C of this Section, upon sworn application by the owner of an eligible facility and upon a finding by the board, after investigation, that the application is complete and the owner is suitable, the board shall issue a license to the owner to conduct slot machine gaming in an eligible facility. Once licensed, slot machine gaming may be conducted subject to the requirements of this Chapter and rules adopted pursuant to the authority granted in this Chapter.

            B. As a condition of licensing and to maintain continued authority for the conduct of slot machine gaming at the licensed eligible facility, the owner of the licensed eligible facility shall:

            (1) Maintain continuous suitability.

            (2) Repealed by Acts 2001, No. 1222, §2, eff. July 2, 2001.

            (3) Permit unrestricted access and right of inspection by the board, any agent of the board, and the division to any portion of the premises of an eligible facility in which any activity relative to the conduct of slot machine gaming is conducted.

            (4) Contribute to the support of pari-mutuel wagering facilities in the state at large and the horse breeding industry by paying annually from the annual net slot machine proceeds received from slot machine gaming operations at the licensed eligible facility as provided in this Paragraph:

            (a) The licensed eligible facility shall transfer to the Horsemen's Benevolent and Protective Association by the twentieth day of each month a fixed percentage of fifteen percent of the previous month's net slot machine proceeds received from slot machine gaming operators at the licensed eligible facility to supplement purses including any interest earned as follows:

            (i) Seventy percent to supplement purses for thoroughbred races at that facility or any facility licensed by the Louisiana State Racing Commission to conduct additional or substitute races or race days as authorized by R.S. 4:147.1, thirty percent of which shall be for Louisiana-bred thoroughbred horses. Four percent of this amount shall go to the Horsemen's Benevolent and Protective Association in accordance with law.

            (ii) Thirty percent to supplement purses for quarter horse races at that facility or any facility licensed by the Louisiana State Racing Commission to conduct additional or substitute races or race days as authorized by R.S. 4:147.1, sixty percent of which shall be for Louisiana-bred quarter horses. Four percent of this amount shall go to the Horsemen's Benevolent and Protective Association in accordance with law.

            (iii) The Horsemen's Benevolent and Protective Association, designated and recognized as an authorized representative of the Louisiana horsemen, shall be deemed to hold a perfected security interest in and to the fifteen percent of the annual net slot machine proceeds received from slot machine gaming operations at the licensed eligible facility that is required to supplement purses until the purse supplements have been distributed as purses or distributed to the Horsemen's Benevolent and Protective Association in accordance with law. All such purse supplements shall be deemed to be held in trust for the benefit of the Horsemen's Benevolent and Protective Association by the licensee until such time as the monies are distributed in accordance with law or transferred to the Horsemen's Benevolent and Protective Association pursuant to this Paragraph. The purse supplements transferred by the licensee to the Horsemen's Benevolent and Protective Association as required in this Subparagraph and not yet distributed shall be deemed to be held in trust for the benefit of all members and other horsemen in the state and all other persons or entities that receive purse supplements by the Horsemen's Benevolent and Protective Association until such time as the monies are distributed in accordance with the law.

            (iv) A licensee shall have a fiduciary duty to the Horsemen's Benevolent and Protective Association to preserve and account for only the purse supplements in its control. Once the licensee transfers purse supplements to the Horsemen's Benevolent and Protective Association, it shall have no fiduciary duty to the Horsemen's Benevolent and Protective Association, any member or other horsemen, or any person or entity that receives purse supplements to preserve and account for the transferred purse supplements and shall be indemnified against any loss or other circumstance causing the amount of purse supplements to be less than what the licensee transferred to the Horsemen's Benevolent and Protective Association, and the Horsemen's Benevolent and Protective Association shall have a fiduciary duty to all member and other horsemen in the state and all other persons or entities that receive purse supplements to preserve and account for the purse supplements. The account containing the purse supplements transferred to the Horsemen's Benevolent and Protective Association pursuant to this Paragraph shall be subject to audit at all times by the legislative auditor and shall be included in the annual audit required by R.S. 4:185.1.

            (b) The licensed eligible facility shall pay annually a fixed percentage of two percent of the annual net slot machine proceeds received from slot machine gaming operations at the licensed eligible facility to the Executive Committee of the Louisiana Thoroughbred Breeders' Association. The Executive Committee shall distribute such amount according to a schedule or formula and within a time period which shall be established by the committee for special breeder awards to the breeders of accredited Louisiana-bred horses.

            (c) The licensed eligible facility shall pay annually a fixed percentage of one percent of the annual net slot machine proceeds received from slot machine gaming operations at the licensed eligible facility to the Executive Committee of the Louisiana Quarter Horse Breeders' Association. The Executive Committee shall distribute such amount according to a schedule or formula and within a time period which shall be established by the committee for special breeders' awards to the breeders of accredited Louisiana-bred quarter horses.

            (d) All interest earned on funds in this Section shall be used for only Louisiana bred races.

            C.(1) An application may be approved by the board only after the electorate in the parish in which the eligible facility is located or, is proposed to be located, as provided for in Subsection D of this Section, has approved the conduct of slot machine gaming at such facility at an election, as provided in Part III of this Chapter.

            (2) In addition to the requirements of Paragraph (1) of this Subsection, an application for an eligible facility in Orleans Parish may be approved by the board only after the Amended and Renegotiated Casino Operating Contract entered into pursuant to R.S. 27:201 et seq., on October 30, 1998, as amended effective October 19, 1999, March 29, 2001, and March 31, 2001, has been further amended to provide that the inclusion, licensing, or operation of an eligible facility in Orleans Parish shall not constitute an Exclusivity Violation or prohibited land-based gaming as defined in such contract, as amended, following approval of such amendment by the Joint Legislative Committee on the Budget as required by the provisions of Subsection B of Section 3 of Act No. 1 of the First Extraordinary Session of 2001.

            D. The owner of a pari-mutuel live horse racing facility which has been licensed by the Louisiana State Racing Commission to conduct live race meetings, as provided in Part I of Chapter 4 of Title 4 of the Louisiana Revised Statutes of 1950, although the facility necessary to conduct live race meetings has not been completed and live racing has not begun to be conducted may be licensed as provided in Subsections A through C of this Section and may conduct slot machine gaming under such license in a designated slot machine gaming area approved by the board, provided that the facility for the conduct of a live race meeting be constructed and a schedule of live race meetings be established no later than twenty-four months following the receipt of a license to conduct slot machine gaming. All authority to conduct slot machine gaming shall cease if at the end of twenty-four months the requirements of this Subsection are not met.

            E.(1) The license provided for in this Section shall be issued for a period of five years and shall be renewed for succeeding five-year periods upon application for such renewal, provided such application includes all revisions to the information in the original application which are necessary to maintain such information as both accurate and current and provided the board continues in its finding of suitability.

            (2)(a) The license provided for in this Section shall not be transferrable.

            (b)(i) The board shall provide by rule for establishing when a change in the interests in a licensed owner constitutes a change of ownership of sufficient significance that continuing the license would violate the provisions of this Paragraph.

            (ii) The board shall provide by rule for an opportunity for a proposed buyer of an eligible facility to undergo the same processing and investigation by the board that would be conducted regarding an applicant for licensing to conduct slot machine gaming as an owner of an eligible facility in advance of the proposed buyer's concluding the purchase. In such a case, the board shall determine and inform the proposed buyer of whether or not based on the processing and investigation the proposed buyer would be licensed to conduct slot machine gaming as the owner of the facility should he apply for such a license. The advance process and investigation provided for in this Item shall not replace the application of the owner of an eligible facility to conduct slot machine gaming in such facility; however, additional processing and investigation shall be required only to supplement the prior processing and investigation in order that all matters related to such an application be complete and current.

            (3)(a) Notwithstanding Paragraph (1) of this Subsection, upon notification from the Louisiana State Racing Commission that the licensed eligible facility is not in compliance with R.S. 4:164 but is cooperating with the commission and working towards compliance, the board may grant or renew a license pursuant to Paragraph (1) of this Subsection or for a probationary period to be determined by the board.

            (b) Nothing in Subparagraph (a) of this Paragraph shall prevent the board from denying or revoking a license for reasons other than R.S. 4:164.

            F.(1) Wagering at an eligible live racing facility may be made with tokens, chips, vouchers, coupons, or electronic cards issued by the licensed eligible facility or an approved facility manager acting on behalf of the facility. Electronic cards may be used which are affixed with a magnetic storage media, a "smart card" or those containing an integrated circuit chip, but excluding credit cards issued by any other entity or institution or cards which automatically withdraw funds from a credit, savings, or checking account held at a depository institution as defined by Section 3 of the Federal Deposit Insurance Act, 12 U.S.C. 1813, which includes any credit union.

            (2) Notwithstanding any provision of Paragraph (1) of this Subsection to the contrary, if the holder of a license as defined in R.S. 27:353 is also issued a license to operate a sports book by the board in accordance with Chapter 10 of this Title, sports wagers at the eligible facility may also be made in cash or through a patron's verified sports wagering account.

            Acts 1997, No. 721, §1, eff. July 9, 1997; Acts 1998, 1st Ex. Sess., No. 142, §1, eff. May 5, 1998; Acts 2001, No. 1222, §2, eff. July 2, 2001; Acts 2001, No. 1229, §1; Acts 2003, No. 352, §1; Acts 2005, 1st Ex. Sess., No. 54, §1, eff. Dec. 6, 2005; Acts 2012, No. 175, §1, eff. May 22, 2012; Acts 2014, No. 437, §2; Acts 2021, No. 440, §1, eff. July 1, 2021; Acts 2022, No. 530, §2, eff. June 16, 2022; Acts 2023, No. 103, §2, eff. July 1, 2023; Acts 2023, No. 261, §2; Acts 2024, No. 642, §2.