Colorado Race Wagering
Pari-mutuel wagering on horse and greyhound racing became legal in Colorado in 1948 after the General Assembly approved HB439 in March 1947 to be referred to the voters in the November general election. The referendum also created a three-member, governor-appointed Colorado Racing Commission (CRC) to oversee pari-mutuel regulation. The referendum set license fees, capped race meets to 20 days, and allowed only two race meets annually per licensee. The cost of a race meet license was 5% of the pari-mutuel handle. The referendum allowed the CRC to retain up to 20% of collected revenues for administrative purposes. The remaining 80% had to be credited to the state general fund. After voters passed HB439 in the 1948 general election, live racing was open to the public the following year.
In March 1949, the legislators passed HB1097, which amended the pari-mutuel racing act to withhold 1% of winnings for personal income tax.
In May 1967, HB1438 increased the number of live horse racing days from six to nine, and HB1552 changed the daily tax on horse racing only, from 5% of daily wagering receipts to a graduated tax starting at 3% on the first $200,000, 4% on the next $100,000, 5% on receipts between $300,000 and $500,000 and 6% on receipts over $500,000. In June 1967, HB1333 expanded horse racing to include standardbred harness racing. The measure limited the number of harness horse racing meets to three per year on a racetrack specifically designed for standardbred harness racing only. License fees were removed from statute, and the CRC was given the authority to set license fees by rule.
In the 1975 legislative session, HB75-1519 was passed, establishing a Horse Breeders’ Award and Supplemental Purse Fund. The bill also allowed the seven active Fair Circuit horse racetracks to retain 4% of their handle for horsemen purses. This measure boosted the number and quality of racehorses at Fair Circuit meets, which are limited-length races run in small communities around Denver. The Fund was in place and operational by January 1976.
During the 1977 legislative session, several racing bills were passed. SB77-508 changed the number of licensed horse race meets from three to four on any one track in any single year, allowing Centennial Racetrack to race an additional 30 days. HB77-1115 permitted an additional 10 race days (two existing 30-day race meets were extended to 35-day meets) for animals other than horses in any one county in any single year. It also sanctioned a special partial race meet in 1977 of a maximum 20 race days to be held at any racetrack located in Arapahoe County.
HB77-1516, which was effective on 10 May 1977, established a supplemental purse fund to increase the purses paid to horsemen.
In 1983, the Division of Racing Events (DRE) was created by statute. The responsibility for day-to-day regulatory issues, previously managed by the CRC, was moved to the DRE. The DRE would also issue licenses for horse and greyhound racetracks and related professional and occupational licenses, perform on-site monitoring, and enforce rules and statutes governing pari-mutuel racing within the state. The agency was established as self-sustaining, with its operations to be funded by license fees. Pari-mutuel wagering taxes and fines were to be deposited into the state general fund.
On 6 June 1991, Gov. Romer signed into law SB91-99, which expanded pari-mutuel racing to include interstate simulcasting of horse races and OTBs. The bill allowed previously licensed facilities to simulcast for 12 months, subject to approval by the CRC, limited each racetrack to one in-state simulcast facility, and allowed cross-simulcasting between horse and greyhound racetracks. The bill divided the state into a north and south circuit for greyhound racing and created two classes of horse racetracks, Class A and B, based on the duration of meets held at the track. The bill mandated that at least one race of each live horse racing day consist entirely of Colorado-bred horses, and it increased the number of live greyhound racing days. The percentage of gross receipts paid to the CRC for greyhound meets was raised from 4 to 4.5%, and for horse race meets reduced to 0.75% from 3.5% with an additional minimum fee of $3,000 per meet for Class A horse tracks or the actual cost of operating the meet for Class B tracks.
In October 1991, the CRC conducted a hearing regarding the proposed reopening of the Arapahoe Park facility by United Track Racing, Inc. (UTR Inc.). A conditional track license was granted and pre-meet simulcasting approved by the CRC for Arapahoe Park, in accordance with SB91-99. The first full year (1991) of UTR Inc.'s racing operations at Mile High Greyhound Park, Pueblo Kennel Association and Interstate Kennel Club had done well financially. Arapahoe Park reopened on 16 May 1992, holding 64 live horse race days through 7 September of that year. The track's attendance and handle for its live horse racing days were profitable. Because of the track's extended closure (since 1984), the results were seen as an important achievement for horse racing in Colorado.
The passage of HB92-1206 in 1992 called for the CRC and DRE to be moved to the Department of Revenue and increased the number of CRC members from three to five, while keeping the statutory membership criteria.
In 1993, HB93-1034, as a result of an earlier Sunset audit, continued the CRC and DRE, and the regulation of horse and greyhound racing until 1999. The bill also granted subpoena powers to the CRC, and had them categorize industry occupations into those that should be licensed and those that need only register.
During the 1996 legislative session, the General Assembly passed two pieces of legislation that impacted racing and the operations of the CRC and the DRE. HB96-1308, signed by the Governor on 23 April 1996, temporarily, for 1996 and 1997, reduced the annual number of days to 30 of live horse race days needed to qualify as a Class B track, and would revert in 1998 to the pre-bill criterion of 50 days (or 60, if the track was in operation three or more years). Also during 1996 and 1997, the Class B track could receive up to 250 days of simulcast racing, including days on which live racing was held, and would revert in 1998 to three simulcast days for each live race day. The bill conditionally suspended all simulcasting racing in Colorado from 20 June 1996 to 20 April 1997, unless at least one Class B track applied by 20 June 1996 to conduct a live horse race meet during 1996. During 1996 and 1997, the bill obliged OTBs to pay one-fifth of their 5% expense allowance (set at 1% of horse simulcast wagering) to the Class B track from where the simulcast signal originated; during 1996 and 1997, allowed a similar one-fifth deduction by a simulcast facility located at a Class B track from amounts payable to horse purse funds; allowed OTBs to deduct simulcast signal fees from amounts payable to purse funds; and separated payments to purse funds by simulcast facility so that revenue generated from horse racing went to horse purse funds and from greyhound racing went to greyhound purse funds. SB96-176, signed by the Governor on 23 May 1996, defined, for the first time, pari-mutuel wagering as "a form of wagering on the outcome of horse and greyhound races in which those who wager purchase tickets . . . and all like wagers from each race are pooled and the winning ticket holders are paid prizes . . . in amounts proportional to the total receipts in the pool . . ." It also extended the conflict-of-interest statutes to include all DRE employees, and it upgraded DRE investigators to officers, in accordance with other state investigators, to allow for the exchange of investigative staff in undercover investigations.
In 1998 four racing bills were passed, three of which made notable changes to the Racing Statute. SB98-174, effective on 10 April 1998, allowed licensed associations sponsoring greyhound meets to enter into agreements designating purse structure with organizations that represent the majority of kennel owners participating in a race meet. On 1 June 1998, the governor signed SB98-192, which increased the mandatory contribution for greyhound purses by the association sponsoring the race meet from 4% to 5% of the gross handle. It also adjusted the total allowable percentage of gross handle that could be retained by the owner of a greyhound track from 17.5% to 19.5%. And HB98-1017 authorized drug or alcohol testing on a random basis for occupational licenses and authorized the CRC to issue 90-day conditional or temporary licenses.
During the 1999 legislative session, two bills relating to recommendations made in the last Sunset audit were introduced. SB99-066, signed by Governor Owens on 24 March 1999, extended the regulatory powers of the CRC and the DRE until 1 July 2008. SB99-081, effective on 2 June 1999, amended the Racing Statute in accordance with the Sunset audit recommendations. The bill defined a simulcast facility to include greyhound tracks; allowed a simulcast facility to adopt the rules of the state from where the simulcast signal originated, in regards to takeout percentages and breakage on pari-mutuel wagers; and allowed nonracing events at a racetrack, subject to the authority of the CRC and the DRE, to ensure those events did not hinder the safety of racing at the track.
State rules require tracks to host live racing or face losing their rights to be legal Colorado racetracks. In November 2003, voters rejected the proposal to install video lottery terminals at racetracks.
The Division of Racing Events had been affiliated with the Association of Racing Commissioners International (ARCI) for many years, and, in 2002, joined the North American Pari-Mutuel Regulators Association (NAPRA) because of its focus on strengthening the relationship between the national organization and the member racing jurisdictions. Then, on 1 January 2006, NAPRA and ARCI merged all NAPRA jurisdictions into ARCI, forming one association of racing and pari-mutuel regulators. As a member of this national organization, the Division is able to keep on top of trends in the pari-mutuel industry; access its master licensing database; participate in conferences and model rules review sessions for both horse and greyhound racing; play a role in the formation of rules, protocols and drug classifications; and provide auditors and investigators the ability to be part of conferences and discussions regarding developments in their respective racing jurisdictions.
During the 2007 legislative session, the CRC introduced SB07-119, which proposed a number of regulations based on Sunset audit recommendations. Hoping to bring conformity to the racing and gaming industries, a new taxation methodology was proposed. The tax structure, similar to that for limited-stakes gaming, was based on a percentage of net proceeds rather than on gross money wagered. Other provisions of the bill included elimination of the north and south greyhound racing circuits established in 1991, a reduction in the amount of money a greyhound race meet could retain of adjusted gross receipts and breakage, elimination of an in-state simulcast facility's ability to retain breakage on any simulcast greyhound or horse race received by the facility, and a requirement that any remaining monies in the horse owners/breeders awards and supplemental purse fund that had not been distributed in the previous three years be transferred to the racing cash fund. After senatorial consideration, the bill in its final form retained only a 1 July 2016 continuation date for the CRC and DRE.
In 2008, there were attempts to draft a legislative proposal that would provide financial assistance for the greyhound racetracks and the racing industry in general. However, agreement could not be reached, and the only measure to be passed was SB08-176. This bill extended by an additional two years the original period set in 1996 that Arapahoe Park could continue to hold 30, rather than 60, days of live racing each year. Governor Ritter signed it on 17 April 2008. Fallout from not passing the relief legislation came in the form of Cloverleaf Kennel Club, which had discontinued live racing in 2006 and was undecided whether to resume live racing at some future time, choosing to sell its property and equipment in 2008. After 60 years of continuous operation, Mile High Greyhound Park ended live greyhound racing on 28 June that same year.
In 2009, legislation was passed that gave the CRC the ability to approve a live, nontraditional greyhound meet, agreed upon by the track operator and greyhound owners. This arrangement would allow for a meet that ran fewer live days and generated larger purses by simulcasting when the live meet was not running. However, the popularity of greyhound racing had become questionable. Major racing facilities in Arizona and Wisconsin closed, as well as racetracks in New England by voter referendum. Given the closings and the economic downturn, reappearance of live greyhound racing in Colorado was deemed unlikely.
Two additional bills introduced in the 2009 legislative session would have helped the horse and greyhound racing industry if they had passed. The Colorado Horsemen's Legislative Coalition supported HB09-1152, which sanctioned additional pari-mutuel wagering methods for horse races – advance deposit account wagering and historical horse racing – and was defeated. And HB09-1094, supported by the Colorado Greyhound Kennel Operators, proposed eliminating the pari-mutuel tax and remaining restrictions on simulcasting but was also defeated.
A bill that did pass in 2009 was SB09-174, which modified certain provisions in the Racing Statute relating to horse and greyhound racing and pari-mutuel wagering on both. The bill also eliminated the correlation between the number of simulcast days and the number of live race days held annually. And it created the Colorado Greyhound Purse, Welfare, Adoption and Greyhound Racing Promotion Fund. On 21 May 2009, Governor Ritter signed the bill into law. Passage of this bill has had a positive effect on live racing in Colorado. It facilitated the opening and reopening of additional simulcast wagering facilities, which have proved to be profitable.
In spring 2010, a bill was introduced in the Senate seeking to allow video lottery machines at the state's horse and dog racing tracks, but was defeated. HB10-1134, which was passed in 2010, prevented illegal interstate pari-mutuel wagering on racing, authorized the CRC to negotiate and participate in interstate compacts governing horse and greyhound racing, and added a "source market fee" as a fee payable by those outside Colorado who conducted pari-mutuel wagering on simulcast races and who accepted wagers from Colorado residents at out-of-state simulcast facilities.
On 11 May 2013, the governor signed SB13-179, effective on 7 August 2013. The bill extended the ability of the CRC to approve in-state simulcast facilities to receive out-of-state greyhound race simulcasts through an in-state facility located at a licensed Class B horse track from 30 June 2014 to 30 June 2016. Existing law required that, when there were no in-state races, purse funds must be given to greyhound welfare or adoption organizations or to groups that promoted or participated in greyhound racing or promoted the welfare of racing greyhounds. The list was amended to "only greyhound welfare or adoption organizations."
On 4 November 2014, Colorado voters rejected Amendment 68, which would have allowed limited gambling at horse racing tracks in Arapahoe, Mesa and Pueblo counties.
Colorado Race Wagering Properties
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