1. Service providers shall comply with all state and federal laws, including section 3001, et seq. of title 15 of the United States Code.

1. 2. A service provider intending to make any change in its structure or operations which would alter any of the responses given in its original license application must obtain prior approval of such changes by the commission and must file with the commission a statement including, but not limited to:

1. a. The changes to be made.

2. b. The date and time the service provider intends to commence said changes.

2. 3. A service provider may not be licensed as a site operator.

3. 4. A service provider shall maintain records of all wagering at sites where it provides services. Such records shall be available to the commission for review and shall be retained in safekeeping for periods of time as follows:

1. a. Digital storage for three years.

2. b. Other wagering records as may be required from time to time and are specifically defined by the commission.

4. 5. A service provider shall maintain such security controls over its simulcast, account wagering, and communications system as directed by the commission.

5. 6. A service provider shall provide the commission with a report of its operations as directed by the commission. A summary report detailing handle for each day of wagering, the taxes, and breakage owed to the state of North Dakota, and the amounts owed to one or more site operators shall be provided to the commission on a monthly basis. The report must contain any additional content as directed by the commission.

6. 7. A service provider may only provide simulcast and account wagering services to a site operator licensed by the commission, except that a service provider may provide simulcast services to an Indian tribal entity within the state which may not be licensed pursuant to the provision of an existing racing addendum to a tribal gaming compact.

7. 8. A service provider may require compliance by the site operator with contractual provisions necessary to maintain the integrity and proper operation of wagering.

8. 9. A service provider shall provide access by the commission or its designated representative to its facility, records, and any other information as required by the commission or its representative.

9. 10. Simulcasting and account wagering may be permitted only on races conducted at approved locations at pari-mutuel tracks governed by a racing commission, racing board, or governmental agency.

10. 11. A service provider shall participate in a combined pari-mutuel pool, ensure the integrity of its participation, and establish procedure as approved by the commission for the use of federally insured financial institutions for receipt and disbursement of funds which are part of the combined pari-mutuel pool. Such procedure must include provision for timely reconciliation and settlement of pool accounts by a service provider on behalf of a site operator. Times within which settlement of pool accounts are to be settled must be specified in contracts or service agreements between a service provider and site operators.

11. 12. Payment of taxes and other funds:

1. a. A service provider shall pay all pari-mutuel taxes, special fund contributions, and other funds due and owing the state of North Dakota as indicated in the monthly summary report, required in this chapter, directly to the commission.
2. b. Amounts due to North Dakota for pari-mutuel taxes, promotion fund, breeders' fund, purse fund, and breakage shall be paid to the commission in monthly payments on or before the last day of the next month succeeding the month in which the pari-mutuel tax or other funds due to North Dakota occurred or accrued.
3. c. A service provider shall submit a report and a corresponding payment of funds owing to the commission for the full amount of outs (unclaimed winning tickets) within fifteen days after the end of the calendar quarter following the calendar quarter in which such wager was made.
4. d. The commission may, when a service provider is delinquent in remittance of taxes or other funds owed to North Dakota, notify the surety providing bond coverage to North Dakota of the delinquent status of such taxes or funds, and may make a claim for payment from the surety.
5. e. If a service provider fails to submit a report of its operations as required, or fails to pay pari-mutuel taxes or other funds due North Dakota within the time required by this section, or if upon audit it is found to owe additional taxes or other funds, a service provider is subject to a late fee of five percent of the amount of tax or other funds due, plus interest of one percent of the tax or other funds due per month or a fraction of a month of delay after the due date for the remittance of the moneys according to this chapter. A service provider with seven of fourteen delinquent payments may be subject to a late fee of ten percent of the moneys due plus interest of one percent of the amounts due per month or a fraction of a month of delinquency. The late fees and interest must be paid to the commission and disposed of in the same manner as other receipts under this chapter.
6. f. The commission may suspend or revoke a license of a service provider for failure to submit a report of its operations as required by law or administrative rule or for failure to pay funds due North Dakota as required by law or administrative rule. The commission may also take such other actions as may be authorized by law.13. The commission may approve auditors as reasonably necessary for the protection of the public interest. The commission shall be reimbursed on a monthly basis for the salaries, benefit, and travel expenses by the service provider for the auditors assigned to them. Duties of an auditor shall include, but not be limited to, the following when instructed by the commission:- a. An independent weekly record and report of each race program presented by a service provider. The report must be based on a review of each race contained in a program.
7. b. Reconciliation of all operating exceptions by the service provider and the sites it services that are not within the definitions of this chapter or are departures from normal operating practice. Such reconciliation shall include identification, investigation, reporting, and recommendation for adjustment or disposition directly to the commission.
8. c. Independent review and reporting directly to the director of racing of all actions taken by the service provider or the totalizator company operating under contract with the service provider.14. A service provider and a totalizator company operating under contract with a site operator shall serve as the designees of the commission to supervise simulcast and account wagering

operations pertaining to pari-mutuel wagering as is reasonably necessary to ensure the public interest.

1. 15. The pari-mutuel manager shall take immediate emergency actions as necessary to assure the continued operation and integrity of the simulcast or account wagering system. All such actions shall be reported to the commission. The pari-mutuel manager shall, when such acts are not, in the manager's judgment an emergency, report to the commission prior to acting.

2. 16. A service provider shall adopt and adhere to emergency operating procedures as follows. Totalizator system operations will be maintained by a service provider hub. Wagering data will be transferred from the wagering site to the hub via data transmission lines or electronic transmission. Wagering will be conducted in ontrack pools. The hub will transfer all wagering data from the wagering site to the ontrack totalizator system. The locking procedure for the purpose of locking all teller windows at post time will be initiated by an ontrack official; the lock will be electronically conducted through the totalizator system to lock all tellers windows at the wagering site. Back-up locking procedures will be maintained by the pari-mutuel manager, the hub pari-mutuel operator and the hub totalizator system operator. In the event of a lock procedure failure, in which one or more windows fail to lock at the designated time, wagers shall be refunded. In the event of a locking procedure failure, a report will be submitted to the commission. Included will be computer reports reflecting all wagering activity.

1. a. In the event of an interruption of the audiovisual satellite signal or the direct wagering and information dissemination connection from the host racetrack, the pari-mutuel manager must: 1. (1) Notify the host track of the loss of signal. 2. (2) Maintain telephone contact with host track pari-mutuel department. The service provider may continue to accept wagering on the balance of the program. 3. (3) In the event the hub totalizator system fails to transfer the data to the ontrack totalizator system, the totalizator hub pari-mutuel operator must notify ontrack totalizator system representative of the problem and request additional time prior to the start of the race to allow for a transmission of the data. 4. (4) A service provider's pari-mutuel manager shall prepare a report indicating that the transfer of data could not be completed electronically. The report shall also include all the following: 1. (a) A copy of the totalizator report prior to the failure of the transfer of data. 2. (b) A copy of the totalizator report. 3. (c) A brief statement as to where the failure occurred, when the ontrack officials were notified.

2. b. The ontrack pari-mutuel manager must be notified of the system failure.

3. c. In the event that the ontrack totalizator system experiences a complete failure, the pari-mutuel manager may pay ontrack prices or refund amounts wagered.

4. d. In the event any emergency arises in connection with the operation of the pari-mutuel system not provided for by these rules, then the pari-mutuel manager shall make an immediate decision and render a full report to the commission.

e. The ontrack pari-mutuel manager is responsible during the simulcast racing operating hours for the reporting of any problems or delays to the wagering site. The wagering site is responsible for reporting any problems or delays to the public.

17. No service provider may commence wagering or utilize a totalizator system which has not been previously disclosed to the commission without notifying the commission of its intent to begin conduction wagering and receiving written commission approval. The foregoing does not prohibit a service provider from engaging in test wagering if such test wagering does not involve the exchange of real currency.

18. A service provider shall provide its players with contact information for no less than one problem gambling program. The problem gambling program utilized by the service provider shall be clearly identified on the service provider's application and be subject to approval by the commission. The commission may designate changes to the methods employed in displaying contact information as necessary to support the accessibility of the information.

a. On any website utilized for account wagering a link to problem gambling program contact information shall be prominently displayed on the main page of the website.

b. At any simulcast facility problem gambling program contact information shall be prominently displayed so as to be clearly visible in each room of the facility.

History: Effective March 1, 1990; amended effective August 1, 2007; July 1, 2011; April 1, 2016.

General Authority: NDCC 53-06.2-05

Law Implemented: NDCC 53-06.2-04, 53-06.2-05, 53-06.2-10.1, 53-06.2-11, 53-06.2-12, 53-06.2-13, 53-06.2-14