KRS 230.779: Operation of hub -- Application for licensure -- Requirements --

Investigations -- Inspections -- Administrative regulations -- Review and audit.

(1) Notwithstanding KRS 230.361(1), a licensee may operate the hub either

independently or in association with one (1) or more racetracks licensed by the

corporation to run live races and conduct pari -mutuel wagering in Kentucky. Hub

operations may be physically located on property other than that operated by a

racetrack and may accept wagers at th at location and shall comply with the

Interstate Horseracing Act, 15 U.S.C. secs. 3001 to 3007.

(2) As a part of the application for licensure as a hub, an applicant shall submit a

detailed plan of operations in a format and containing any information as r equired

by the corporation. The application shall be accompanied by an application fee to

cover incremental costs to the corporation, in an amount the corporation determines

to be appropriate. At a minimum, the operating plan shall address the following:

(a) The manner in which the proposed wagering system will operate, including its

proposed operating schedule;

(b) The requirements for a qualified subscriber -based service set out in KRS

230.775; and

(c) The requirements for accounts established and operate d for persons whose

principal residence is outside of the Commonwealth of Kentucky.

(3) The corporation may require changes in a proposed plan of operations as a

condition of licensure. Subsequent material changes in the system's operation shall

not occur unless approved by the corporation.

(4) The corporation may conduct investigations or inspections or request additional

information from any applicant as it deems appropriate in determining whether to

approve the license application.

(5) An applicant licen sed under this section may enter into any agreements that are

necessary to promote, advertise, and further the sport of horse racing, or for the

effective operation of hub operations, including, without limitation, interstate

account wagering, television production, and telecommunications services.

(6) The corporation may promulgate administrative regulations to effectuate the

provisions of KRS 230.775 to 230.785. The administrative regulations shall include

but not be limited to criteria for licensing, the application process, the format for the

plan of operations, requisite fees, procedures for notifying the corporation of

substantive changes, contents of agreements entered into under subsection (5) of

this section, procedures for accounting for wagers mad e, and other matters

reasonably necessary to implement KRS 230.775 to 230.785.

(7) The corporation may require the hub to make the following payments to the

corporation:

(a) A license fee not to exceed two hundred dollars ($200) per operating day; and

(b) A fee of not more than one percent (1%) of the hub's total gross wagering

receipts.

(8) A hub's records and financial information shall not be subject to the provisions of

KRS 61.870 to 61.884.

(9) The Auditor of Public Accounts may review and audit all records and financial

information of the hub, including all account information. The Auditor shall prepare

a report of the review and audit which shall not contain any propriet ary information

regarding the hub. A copy of the report shall be sent to the Legislative Research

Commission for referral to the appropriate committee.