CO Code § 44-32-702 (2021)
2021 Colorado Code|Title 44 - Revenue - Regulation of Activities|Article 32 - Racing|Part 7 - Taxes and Fees|§ 44-32-702. Unlawful to Wager - Exception - Excess - Taxes - Special Provisions for Simulcast Races - Rules

     It is unlawful to conduct pool selling or bookmaking, or to circulate handbooks, or to bet or wager on any race meet licensed under the provisions of this article 32 other than by the pari-mutuel method.      Except as otherwise provided in subsection (4) of this section, it is unlawful for a racing or simulcast facility licensee for the racing of greyhounds or horses to take more than the percentage of the gross receipts authorized by the commission pursuant to subsection (1)(b)(II) of this section of any pari-mutuel wagering on the races or simulcast races. (b) (I) Except as otherwise provided in subsection (4) of this section, it is unlawful for a racing or simulcast facility licensee for the racing of greyhounds or horses to take more than the percentage of the gross receipts authorized by the commission pursuant to subsection (1)(b)(II) of this section of any pari-mutuel wagering on the races or simulcast races.    The commission may annually determine the authorized take-out under subsection (1)(b)(I) of this section by rule, but the take-out shall not exceed thirty percent of the gross receipts of any pari-mutuel wagering on races originating within Colorado.       Each licensee for the racing of horses shall pay as purses for the races in any horse race meet conducted at its in-state host track fifty percent of the breakage attributable thereto, and fifty percent of the track's commission. For purposes of this subsection (1)(c), “track's commission” means the maximum allowable percentage that may be taken, pursuant to subsection (1)(b) of this section, by a licensee for the racing of horses from the gross receipts from all pari-mutuel wagering placed on the races at the in-state host track, after deduction of the amounts specified in sections 44-32-701 (2)(a) and (2)(b) and 44-32-705 (2).    For each horse race meet it conducts, a licensee shall file with its license application with the commission an agreement between the licensee and the organization that represents the majority of the owners of horses participating at the race meet. The agreement shall specify the purse structure that shall apply to the races conducted at the horse race meet, including minimum purses per race and any conditions relating to overpayments or underpayments.      Each operator of an in-state simulcast facility that receives simulcast races of horses from either an in-state host track or an out-of-state host track, or of greyhounds from an out-of-state host track, shall pay to purse funds for the racing of horses and to the in-state or out-of-state tracks and simulcast facilities described in the simulcast agreement filed with the commission, the percentages of the gross pari-mutuel wagering on the simulcast races, after deduction of a signal fee required by an out-of-state host track or an in-state host track, paid during the current year or a previous year, and the applicable amounts specified in subsection (2)(b) of this section and in sections 44-32-701 (1) and (2) and 44-32-705 (2), as specified in the simulcast agreement. In the case of pari-mutuel wagers on greyhound simulcast signals received by a class B track from an out-of-state host track, the operator shall deposit the amounts payable pursuant to section 44-32-701 (2)(a)(II)(B) into a trust account for distribution, in accordance with rules of the commission, to greyhound welfare and adoption organizations. (e) (I) Each operator of an in-state simulcast facility that receives simulcast races of horses from either an in-state host track or an out-of-state host track, or of greyhounds from an out-of-state host track, shall pay to purse funds for the racing of horses and to the in-state or out-of-state tracks and simulcast facilities described in the simulcast agreement filed with the commission, the percentages of the gross pari-mutuel wagering on the simulcast races, after deduction of a signal fee required by an out-of-state host track or an in-state host track, paid during the current year or a previous year, and the applicable amounts specified in subsection (2)(b) of this section and in sections 44-32-701 (1) and (2) and 44-32-705 (2), as specified in the simulcast agreement. In the case of pari-mutuel wagers on greyhound simulcast signals received by a class B track from an out-of-state host track, the operator shall deposit the amounts payable pursuant to section 44-32-701 (2)(a)(II)(B) into a trust account for distribution, in accordance with rules of the commission, to greyhound welfare and adoption organizations.    To defray operating expenses, the operator of a simulcast facility located at a class B track may retain up to twenty percent of the net purses earned and payable to the horse purse fund as provided in subsection (1)(e)(I) of this section.       A licensee or operator shall retain horse purse funds, including funds established in section 44-32-705, payable by the licensee or operator under this section in a trust account in a commercial bank located in Colorado until the purse funds are paid to the horse owners or to the host track for payment to the horse owners; except that:   The money deposited in any such trust account shall be invested in a fund that invests in obligations of the United States government with maturities of less than one year or that is an account insured in full by an agency of the federal government; and    Money credited to a horse purse trust account from the source market fee in accordance with section 44-32-202 (3)(h)(II) shall be paid as authorized by the director as purses for races held at live race meets in Colorado or as otherwise authorized by rules of the commission.       Except as otherwise provided in subsection (4) of this section:   It is unlawful for any licensee to compute breaks in the pari-mutuel system in excess of ten cents; and    If, during any race meet conducted under this article 32, there are underpayments of the amount actually due to the wagerers, the amount of the excess of the underpayments over and above overpayments to wagerers, at the expiration of thirty days from the end of the meet, shall revert and belong to the state of Colorado and be paid to the department through the division and become a part of its funds, and it shall not be retained by the licensee under whose license the race meet was held.         Fifty percent of the breakage at any horse race meet shall be retained by the licensee under whose license the horse race meet was held and the remainder shall be paid as purses for the races conducted at the race meet. (h) (I) Fifty percent of the breakage at any horse race meet shall be retained by the licensee under whose license the horse race meet was held and the remainder shall be paid as purses for the races conducted at the race meet.    The breakage at any greyhound race meet shall be retained by the licensee under whose license the greyhound race meet was held.    Except as otherwise provided in subsection (1)(h)(IV) or (4) of this section, the breakage on any simulcast race of horses or greyhounds received by an in-state simulcast facility shall be retained by the operator of the in-state simulcast facility.    In the case of simulcast races of horses received from an in-state host track, fifty percent of the breakage shall be paid to the licensee of the in-state host track within sixty days after the end of the race meet from which the simulcast race was broadcast and the remainder shall be paid as purses for the races conducted at the in-state host track.       An operator of an in-state simulcast facility shall retain the proceeds derived from all unclaimed pari-mutuel tickets for each simulcast race of greyhounds received for a race held at an out-of-state host track and, after a period of one year following the simulcast race, the proceeds revert and belong to the operator.         In the event the federal government or any federal governmental agency imposes a levy on the licensee by a tax on the money so wagered and upon and against its receipts, the licensee may collect, in addition to the percentage and breaks allowed in this section, the amount of the tax so levied.    The tax and breaks and license fee provided for in this article 32 shall be in lieu of all other license fees and privilege taxes or charges by the state of Colorado or any county, city, town, or other municipality or taxing body for the privilege of conducting any race meet provided for in this article 32 and licensed by the authority of this article 32; except that any county, city, town, or other municipality or taxing body that imposed any fee, tax, or charge prior to July 1, 1982, on the money so wagered, or upon and against the licensee's receipts, or for the privilege of conducting any race meet provided for and licensed by authority of this article 32 shall have the authority to amend, repeal and reenact, or repeal any such fee, tax, or charge and impose a new or different fee or tax on the money so wagered, or upon and against the licensee's receipts, or for the privilege of conducting any race meet provided for and licensed by authority of this article 32, and no provision of this article 32 shall affect the authority of the county, city, town, or other municipality or taxing body with respect to such fees or taxes unless the provision specifically refers to this subsection (2)(b). Notwithstanding subsection (1) of this section, it is lawful for the licensee to take such fee or tax from the gross receipts on pari-mutuel wagering; and in such cases the licensee shall pay the fee or tax directly to the county, city, town, or other municipality or taxing body.       Unless expressly authorized by this article 32, no person may act for consideration as an agent or courier for another person for the purpose of placing wagers or cashing or redeeming winning pari-mutuel tickets. In addition to the remedies otherwise provided for violations of this article 32, the commission may petition any court of competent jurisdiction for an order enjoining a violation of this subsection (3).    Pursuant to a valid simulcasting agreement, an operator of an in-state simulcast facility that receives simulcast signals of horse or greyhound races held in another state may:   Take the percentage of the gross receipts of any pari-mutuel wagering on the simulcast races as is allowable under the laws and rules of the other state; and    Adopt the procedures for computation and distribution of breakage as are allowable under the laws and rules of the other state.        History. Source: L. 2018: (1)(f)(II) added,(SB 18-182), ch. 115, p. 812, § 2, effective April 12; entire article added with relocations,(HB 18-1024), ch. 26, p. 314, § 2, effective October 1.    Editor's note:    This section is similar to former § 12-60-702 as it existed prior to 2018.    Subsection (1)(f)(II) of this section was numbered as § 12-60-702 (1)(f)(III) in SB 18-182. That provision was harmonized with and relocated to this section as this section appears in HB 18-1024.     ANNOTATION   Annotator's note. The following annotations include cases decided under former provisions similar to this section.   Statutes authorizing pari-mutuel betting on racing events are valid over the contention that such betting constituted a lottery. Ginsberg v. Centennial Turf Club, Inc., 126 Colo. 471 , 251 P.2d 926 (1952).   Pari-mutuel betting upon horse and dog races did not offend against the former constitutional provision which provided that the general assembly “shall have no power to authorize lotteries or gift enterprises for any purpose, and shall pass laws to prohibit the sale of lottery or gift enterprise tickets in this state”. Ginsberg v. Centennial Turf Club, Inc., 126 Colo. 471 , 251 P.2d 926 (1952).   In an action involving the disposition of funds collected in connection with horse racing, it was held on review that a licensee shall collect and retain the breakage. Centennial Turf Club, Inc. v. Colo. Racing Comm'n, 129 Colo. 529 , 271 P.2d 1046 (1954).   The general assembly took time out to specify and direct to whom the underpayments should be made, that is, to the state, and it could have easily included the breakage if such was its intention. Centennial Turf Club, Inc. v. Colo. Racing Comm'n, 129 Colo. 529 , 271 P.2d 1046 (1954).   The track is not quasi-trustee of the breakage, because there is no beneficiary stated in the section and certainly it is not trustee for the wagerers because the section clearly indicates that the breakage does not go to the wagerers, but it authorizes a withholding of the odd pennies therefrom, and it cannot be trustee for the state because the section does not say that the state is entitled to this breakage. Centennial Turf Club, Inc. v. Colo. Racing Comm'n, 129 Colo. 529 , 271 P.2d 1046 (1954).