A.R.S. tit. 5 ch. 1 — Arizona Revised Statutes Title 5 Chapter 1 — Horse And Dog Racing

5-101. Definitions In this article, unless the context otherwise requires: 1. "Additional wagering facility" means a facility that is not the enclosure in which authorized racing takes place but that meets the requirements of section 5-111, subsection A and is used by a permittee for handling pari-mutuel wagering. 2. "Advance deposit wagering" means a form of pari-mutuel wagering that allows a person to deposit monies in advance in an account with an advance deposit provider and use the monies to pay for pari-mutuel wagering on live or simulcast racing that the advance deposit pari-mutuel wagering permittee accepts or makes. 3. "Advance deposit wagering provider" means a betting system or multijurisdictional wagering provider that is authorized to conduct advance deposit wagering pursuant to this article. 4. "Applicant" means a person, partnership, association or corporation placing before the department an application for a permit or license. 5. "Association" means a body of persons, corporations, partnerships or associations, united and acting together without a charter from the state for the prosecution of some common enterprise. 6. "Commercial horse racing" means horse racing conducted other than by a county fair association. 7. "Commission" means the Arizona racing commission. 8. "Concessionaire" means a person, partnership, association or corporation that offers goods or services for sale to the public, a permittee or a licensee at an enclosure in which authorized racing takes place or an additional wagering facility. 9. "County fair facility" means any place, enclosure or track constructed in accordance with a permit issued by the commission for the purpose of running county fair horse racing dates as well as any commercial dates for horse racing that may be awarded by the commission in reference to the location. 10. "County fair racing association" means an association duly authorized by the board of supervisors to conduct a county fair racing meeting for the benefit of the county. 11. "Dark day simulcast" means a simulcast received on a day when there are no posted races conducted at the enclosure in which authorized racing takes place. 12. "Department" means the department of gaming. 13. "Desensitized" means that a horse's legs on arrival at the receiving barn or saddling paddock do not respond appropriately to tests for feeling administered by an official veterinarian. 14. "Director" means the director of the department of gaming. 15. "Dog racing" means racing in which greyhound dogs chase a mechanical lure. 16. "Entered" means that a horse or dog has been registered with an authorized racing official as a participant in a specified race and has not been withdrawn prior to presentation of the horse or dog for inspection and testing as provided in section 5-105. 17. "Financial interest" means any direct pecuniary interest. 18. "Firm" means a business unit or enterprise that transacts business. 19. "Handle" means the total amount of money contributed to all pari-mutuel pools by bettors. 20. "Harness racing" means horse racing in which the horses are harnessed to a sulky, carriage or similar vehicle and driven by a driver. 21. "Horse racing" means racing in which horses are mounted and ridden by jockeys. For purposes of county fair racing meetings, "horse racing" means racing in which horses or mules are mounted and ridden by jockeys. 22. "License" means the license issued by the department to each employee or other person participating in any capacity in a racing meeting, including officials and employees of the pari-mutuel department. 23. "Pari-mutuel wagering" means a system of betting that provides for the distribution among the winning patrons of at least the total amount wagered less the amount withheld under state law. 24. "Permit" means a permit for a racing meeting issued under this article. 25. "Racing meeting" means a number of days of racing allotted by the commission in one permit. 26. "Simulcast" means the telecast shown within this state of live audio and visual signals of horse, harness or dog races conducted at an out-of-state track or the telecast shown outside this state of live audio and visual signals of horse or harness races originating within this state for the purpose of pari-mutuel wagering. 27. "Source market fee" means the fee that an advance deposit wagering provider pays to a commercial permittee in the state where the advance deposit wagering customer resides. 28. "Telephone" means any device that a person uses for voice communications in connection with the services of a telephone company. 29. "Unauthorized racing meeting" means any racing meeting conducted outside the bounds of a permit. 30. "Undesirable" includes known bookmakers, touts, persons convicted of a violation of this article or of any law prohibiting bookmaking or any other illegal forms of wagering, or any other person whose presence would, in the opinion of the director, be inimical to the interests of the state. 31. "Week" means seven consecutive days beginning on Monday and ending on Sunday, mountain standard time. 5-101.01. Division of racing; director; qualifications; term; deputy director; conflict of interest A. There is established a division of racing within the department of gaming. B. The director shall administer the division. To be eligible for appointment as director, a person must have a minimum of five years of experience in business and administration and shall not have a financial interest in a racetrack or in the racing industry in this state during that person's appointment. C. The director may establish the position of deputy director of the division. D. The position of deputy director, if applicable, is exempt from title 41, chapter 4, articles 5 and 6. The deputy director, if applicable, is eligible to receive compensation pursuant to section 38-611. E. Title 38, chapter 3, article 8, relating to conflict of interest, applies to the director and all other employees of the department. F. Neither the director, any employee of the department nor any member of the immediate family of the director or other employee of the department may: 1. Have any pecuniary interest in a racetrack in this state or in any stable, compound or farm licensed under this chapter. 2. Wager money at a racetrack enclosure or additional wagering facility in this state or wager money on the results of any race held at a racetrack enclosure in this state. 3. Hold more than a five percent interest in any entity doing business with a racetrack in this state. 4. Have any interest, whether direct or indirect, in a license issued pursuant to this chapter or in a licensee, facility or entity that is involved in any way with pari-mutuel wagering. For the purposes of this paragraph, "interest" includes employment. G. The director, the deputy director, if applicable, and all employees of the department shall complete a conflict-of-interest disclosure form on initial appointment as director and deputy director, if applicable, and on hiring as a new employee. The director, the deputy director, if applicable, and all department employees shall submit an updated conflict-of-interest disclosure form annually if any conflict-of-interest information has changed. H. Failure to comply with subsection F or G of this section is grounds for dismissal. I. For the purposes of subsection F of this section, "immediate family" means a spouse or children who regularly reside in the household of the director or other employee of the department. 5-102. Arizona racing commission; members; appointment; terms There shall be an Arizona racing commission consisting of five members, who shall be appointed by the governor pursuant to section 38-211. Appointment shall be for a term of five years which shall expire on the third Monday in January of the appropriate year. 5-103. Commissioners; qualifications; oath; interest in racing prohibited; exception; annual report A. A member of the commission shall have been a resident of this state and a qualified elector for at least five years before the governor appoints the member. B. Before entering on the discharge of the appointee's duties, each appointee shall take the official oath. C. A person who has a financial interest, either directly or indirectly, in a racetrack, or the operation of licensed wagering on the results of races, is not qualified for membership on the commission or appointment or employment by the commission, but this subsection does not affect the entrance into a race outside this state of a horse or dog belonging to a member, or the winning of a purse or award by a member's horse or dog. D. A commissioner or member or a relative of the commissioner or member to the first degree of consanguinity may not have a financial interest in a licensee or permittee regulated by the division. E. Of the five members appointed to the commission, two shall have a financial interest or substantial experience in the horse or harness racing industry. F. Members of the commission are eligible to receive compensation pursuant to section 38-611 for each day spent in the discharge of their duties and reimbursement for all expenses necessarily and properly incurred in attending meetings of or for the commission. G. The governor shall remove any commissioner who ceases to meet the qualifications prescribed by this section. 5-103.01. Prohibited activities An employee or appointee of the commission may not: 1. Enter into any business dealing, venture or contract with an owner or lessee of a race track or any permittee. 2. Be employed in any capacity by any race track or permittee. 3. Participate as an owner-trainer, trainer or jockey in any racing meeting conducted in this state. 5-104. Arizona racing commission; director; division; powers and duties A. The commission shall: 1. Issue racing dates. 2. Prepare and adopt complete rules to govern the racing meetings that are required to protect and promote the safety and welfare of the animals participating in racing meetings, to protect and promote public health, safety and the proper conduct of racing and pari-mutuel wagering and any other matter pertaining to the proper conduct of racing within this state. 3. Conduct hearings on applications for permits and approve permits and shall conduct rehearings on licensing and regulatory decisions made by the director as required pursuant to rules adopted by the commission. 4. Conduct all reviews of applications to construct capital improvements at racetracks as provided in this chapter. B. The director shall license personnel and shall regulate and supervise all racing meetings held and pari-mutuel wagering conducted in this state and cause the various places where racing meetings are held and wagering is conducted to be visited and inspected on a regular basis. The director may delegate to stewards any of the director's powers and duties that are necessary to fully carry out and effectuate the purposes of this chapter. The director shall exercise immediate supervision over the division. The director is subject to ongoing supervision by the commission, and the commission may approve or reject decisions of the director in accordance with rules established by the commission. C. The commission or the division is authorized to allow stewards, with the written approval of the director, to require a jockey, apprentice jockey, sulky driver, groom, horseshoer, outrider, trainer, assistant trainer, exercise rider, pony rider, starter, assistant starter, jockey's agent, veterinarian, assistant veterinarian, cool-out, security or maintenance worker, official or individual licensed in an occupational category whose role requires direct hands-on contact with horses, while on the grounds of a permittee, to submit to a test if the stewards have reason to believe the licensee is under the influence of or unlawfully in possession of any prohibited substance regulated by title 13, chapter 34. D. The division shall employ the services of the office of administrative hearings to conduct hearings on matters requested to be heard by the director or the commission for the division except for those rehearings that are required by the terms of this chapter to be conducted by the commission. Any person adversely affected by a decision of a steward or by any other decision of the division may request a hearing on the decision. The decision of the administrative law judge becomes the decision of the director unless rejected or modified by the director within thirty days. The commission may hear any appeal of a decision of the director in accordance with title 41, chapter 6, article 10. E. The division may visit and investigate the offices, tracks or places of business of any permittee and place in those offices, tracks or places of business expert accountants and other persons as the division deems necessary for the purpose of ascertaining that the permittee or any licensee is in compliance with the rules adopted pursuant to this article. F. The division shall establish and collect the following licensing fees and regulatory assessments, which shall not be reduced for capital improvements pursuant to section 5-111.02: 1. For each racing license issued, a license fee. 2. From the purse accounts provided for in section 5-111, a regulatory assessment to pay for racing animal medication testing, animal safety and welfare. 3. From each permittee, a regulatory assessment for each day of dark day simulcasting conducted in excess of the number of live racing days conducted by the permittee. 4. From each commercial racing permittee, a regulatory assessment payable from amounts deducted from pari-mutuel pools by the permittee, in addition to the amounts the permittee is authorized to deduct pursuant to section 5-111, subsection B from amounts wagered on live and simulcast races from in-state and out-of-state wagering handled by the permittee. G. The commission shall establish financial assistance procedures for promoting adoption of retired racehorses. The provision of financial assistance to nonprofit enterprises for the purpose of promoting adoption of retired racehorses is contingent on a finding by the commission that the program presented by the enterprise is in the best interest of the racing industry and this state. On a finding by the commission, the commission is authorized to make grants to nonprofit enterprises whose programs promote adoption of retired racehorses. The commission shall develop an application process. The commission shall require an enterprise to report to the commission on the use of grants under this subsection. Financial assistance for nonprofit enterprises that promote adoption of retired racehorses under this subsection shall not exceed the amount of retired racehorse adoption surcharges collected pursuant to this subsection. The commission shall collect a retired racehorse adoption surcharge in addition to each civil penalty assessed in connection with horse or harness racing pursuant to this article. The amount of the retired racehorse adoption surcharge shall be five percent of the amount collected for each applicable civil penalty. H. A license is valid for the period established by the commission, but not more than five years, except for a temporary license issued pursuant to section 5-107.01, subsection F. The licensing period shall begin July 1. I. A person may submit an application in writing that objects to any decision of track stewards within three days after the official notification of the decision. On application, the division or administrative law judge shall review the objection. In the case of a suspension of a license by the track stewards, the suspension shall run for a period of not more than six months. Before the end of this suspension period, filing an application for review is not cause for reinstatement. If at the end of this suspension period the division or administrative law judge has not held a hearing to review the decision of the stewards, the suspended license shall be reinstated until the division or administrative law judge holds a hearing to review the objection. Except as provided in section 41-1092.08, subsection H, a final decision of the commission is subject to judicial review pursuant to title 12, chapter 7, article 6. J. The commission or the director may issue subpoenas for the attendance of witnesses and the production of books, records and documents relevant and material to a particular matter before the commission or division and the subpoenas shall be served and enforced in accordance with title 41, chapter 6, article 10. K. Any member of the commission, the administrative law judge or the director or the director's designee may administer oaths, and the oaths shall be administered to any person who appears before the commission to give testimony or information pertaining to matters before the commission. L. The commission shall adopt rules that require permittees to retain for three months all official race photographs and videotapes. The division shall retain all photographs and videotapes that are used as evidence in an administrative proceeding until the conclusion of the proceeding and any subsequent judicial proceeding. All photographs and videotapes must be available to the public on request, including photographs and videotapes of races concerning which an objection is made, regardless of whether the objection is allowed or disallowed. M. The director may establish a management review section for the development, implementation and operation of a system of management reports and controls in major areas of division operations, including licensing, workload management and staffing, and enforcement of this article and the rules of the commission. N. In cooperation with the department of public safety, the director shall establish a cooperative fingerprint registration system. Each applicant for a license or permit under this article or any other person who has a financial interest in the business or corporation making the application shall submit to fingerprint registration as part of the background investigation conducted pursuant to section 5-108. The cooperative fingerprint registration system shall be maintained in an updated form using information from available law enforcement sources and shall provide current information to the director on request as to the fitness of each racing permittee and each racing licensee to engage in the racing industry in this state. O. The director shall develop and require division staff to use uniform procedural manuals in the issuance of any license or permit under this article and in the enforcement of this article and the rules adopted under this article. P. The director shall submit an annual report containing operational and economic performance information as necessary to evaluate the department's budget request for the next fiscal year to the governor, the speaker of the house of representatives, the president of the senate and the secretary of state not later than September 30 each year. The annual report shall be for the preceding fiscal year and shall contain performance information as follows: 1. The total state revenues for the previous fiscal year from the overall pari-mutuel handle with an itemization for each horse racing meeting, each harness racing meeting, each advanced deposit wagering permittee and each additional wagering facility. 2. The total state revenues for the previous fiscal year from the regulation of racing, including licensing fees assessed pursuant to subsection F of this section and monetary penalties assessed pursuant to section 5-108.02. 3. The amount and use of capital improvement funds pursuant to section 5-111.02 that would otherwise be state revenues. 4. The number of licenses and permits issued, renewed, pending and revoked during the previous fiscal year. 5. The investigations conducted during the previous fiscal year and any action taken as a result of the investigations. 6. The division budget for the immediately preceding three fiscal years, including the number of full-time, part-time, temporary and contract employees, a statement of budget needs for the forthcoming fiscal year and a statement of the minimum staff necessary to accomplish these objectives. 7. Revenues generated for this state for the preceding fiscal year by persons holding racing meeting and advanced deposit wagering permits. 8. Recommendations for increasing state revenues from the regulation of the racing industry while maintaining the financial health of the industry and protecting the public interest. Q. The commission may certify animals as Arizona bred or as Arizona stallions. The commission may delegate this authority to a breeders' association it contracts with for these purposes. The commission may authorize the association, racing organization or division to charge and collect a reasonable fee to cover the cost of breeding or ownership certification or transfer of ownership for racing purposes. R. The commission may obtain the services of the office of administrative hearings on any matter that the commission is empowered to hear. S. The division may adopt rules pursuant to title 41, chapter 6 to carry out the purposes of this article, ensure the safety and integrity of racing in this state and protect the public interest. 5-104.01. Audits and special investigations; exemption A. The department shall require that an annual financial audit be conducted of each permittee licensed under this chapter. The department may also require a financial audit from any concessionaire licensed under this article. The department may, for any audit required by this section, require a permittee or concessionaire to supply a certified audit to the department. The commission shall adopt rules that require each permittee to select an accounting firm approved by the auditor general to conduct the annual financial audit when a certified audit is required. Audits performed pursuant to this section shall be conducted in accordance with auditing standards established by the auditor general. B. All permittees and licensees subject to the financial audit as prescribed by this section shall afford reasonable and needed facilities and make returns and exhibits to the department or audit firm in the form and at the time prescribed by the department. The auditor representing the department shall have access to all information, records, pari-mutuel betting devices and equipment necessary to conduct electronic data processing and other audits and reviews. The computer software and other proprietary information and records obtained by the auditor are not subject to disclosure and are exempt from title 39, chapter 1. C. The commission may reduce the number of racing days of a permittee or revoke the permit or license of a person who knowingly fails or refuses to make the prescribed returns or exhibits or give information as required. D. The department may expend monies for the purpose of special investigations of permittees or licensees to determine compliance with this chapter or the rules issued pursuant to this chapter. E. The department may require that the audit and investigation of a permittee and licensee include any person who has a substantial interest, as defined in section 38-502, in the permittee or licensee. F. This section does not apply to a racing meeting operated by a county fair association. 5-105. Appointment of personnel; tests; reports; detention of animals; testing facilities A. For purposes of detecting violations of this article, the department shall appoint qualified veterinarians, biochemists and such other personnel subject to title 41, chapter 4, article 4 as the department considers necessary or may contract with a duly qualified chemical laboratory located either within or outside this state. The testing personnel may, in accordance with such procedures as the commission by regulation prescribes: 1. Examine horses entered in a race within six hours before the start of the race to determine if the horse has been desensitized or drugged. For the purposes of the examination a horse does not have to be held in a retaining barn. 2. Perform such other tests and inspections as the department considers necessary to carry out this article including the random splitting of samples. 3. Store blood, urine and saliva samples in a frozen state or in any other appropriate manner by which they may be preserved for future analysis. 4. Perform tests on horses that die while on property under the jurisdiction of the department. 5. Analyze samples of urine, blood or saliva taken immediately after a race from the horse that won the race to determine if the horse has been drugged. The department may additionally analyze samples of any other animal entered in a race. B. The veterinarian authorized by the department may order the taking and analysis of samples from a losing favorite or from any other horse when the veterinarian, based on the performance of the horse in the race, has probable cause to believe that the horse has been drugged or desensitized. If a blood sample is required, the veterinarian shall take the sample. C. The identity of any horse determined under this section to be drugged or desensitized shall, in accordance with such procedures as the commission prescribes by regulation, be reported to a steward and the appropriate county attorney. If any horse is not made available in accordance with such regulations as the commission prescribes for any test or inspection required under this section the identity of such horse shall be reported to a steward. D. A permittee shall, in accordance with regulations prescribed by the commission, provide the testing personnel with adequate space and facilities so that the inspections, tests and other procedures described in subsection A of this section may be performed. Access to such space and facilities shall be restricted in accordance with regulations prescribed by the commission. E. Testing personnel may detain for a period of not to exceed twenty-four hours for examination, testing or the taking of evidence any horse at a race that is drugged or desensitized or that such person, based on the results of an inspection, test or other procedure conducted under this section, has probable cause to believe is drugged or desensitized. Any horse that is detained may not be moved during such detention from the place where the horse is detained except as authorized by testing personnel pursuant to rule and regulation of the commission. F. The department shall retain for three years copies of all post-mortem reports on animals. The department shall retain all such reports that are used as evidence in a judicial proceeding at least until the conclusion of the proceeding. 5-106. Supervisor of mutuels; pari-mutuel auditors; other employees; stewards A. The director shall appoint a supervisor of mutuels, security personnel and as many other employees as may be necessary for the enforcement of the laws of this state and the rules relating to racing. B. The director shall determine which employees shall give bond to the state for the faithful performance of their respective duties in an amount as the department shall prescribe. The cost of providing the bonds shall be a charge against the state. C. The compensation of employees shall be as determined pursuant to section 38-611. D. The director shall keep a record of all proceedings and preserve all books, documents and papers of the commission and department. E. The supervisor of mutuels shall monitor the wagering and the pari-mutuel departments at all racing meetings and additional wagering facilities and shall enter into no other employment or contracts of employment involving racing or pari-mutuel wagering either within or without the state during days of racing in the state. F. The security personnel appointed by the director shall assist in keeping the peace at all racing meetings and additional wagering facilities, shall enforce all laws of the state relating to racing and all rules of the commission and shall perform other duties as the commission or director shall prescribe and in the discharge of their duties shall have the authority of peace officers. G. The director shall establish a security section charged with the responsibility for investigative matters relating to the proper conduct of racing and pari-mutuel wagering including barring undesirables from racing, undercover investigations, fingerprinting persons licensed by the department and reviewing license applications. The person in charge of the security section shall have at least five years of experience in law enforcement or in conducting or supervising investigations in some aspect of racing law enforcement. H. If on investigation by the department there is substantial evidence indicating that the security at any track or additional wagering facility is not satisfactory, the director may order the permittee to remedy the deficiency. If after ten days following the order the permittee has not remedied the deficiency, the department may institute its own security personnel program until the deficiency in security is remedied and may charge the permittee the actual costs incurred therefor. The permittee may petition the department for a hearing at any time to review the necessity of the department further maintaining its own security personnel. I. Persons employed by the department as investigators must have training in a general investigation course, including instruction in appropriate Arizona law, conducted or approved by the director. J. For each horse or harness racing meeting, the director, with the approval of the commission, shall employ two persons qualified as stewards. For each horse or harness racing meeting, the permittee, with the approval of the commission, shall employ one person qualified and licensed by the department as a steward. An applicant who wishes to be licensed or employed as a steward by the department for a commercial horse or harness racing meeting must be certified as a steward by a national organization approved by the department. The director shall designate one of the two stewards employed by the department pursuant to this section as chief steward for each horse or harness racing meeting. The director shall designate the remaining stewards as assistant stewards. For each horse or harness racing meeting conducted by a county fair racing association, the director, with the approval of the commission, shall employ three persons qualified as stewards. The director shall designate one of the three stewards as chief steward for each horse or harness racing meeting conducted by a county fair racing association, and shall designate the remaining stewards as assistant stewards. 5-107. Nature of racing meeting permits; application for permit; cash deposit; return; bond; conditions and priorities for satisfaction of bond A. Permits to conduct racing meetings are deemed to be personal in nature, are nontransferable and shall terminate on a substantial change of ownership of the permittee. The sale or transfer of twenty-five percent or more of the equity of a permittee shall be considered a substantial change of ownership. Nothing in this subsection shall be construed so as to cause the termination of a permit on the death of the permittee, or if a corporation, the death of a shareholder thereof, during the period for which such permit was granted. B. Every applicant making application for a permit to hold a racing meeting shall file an application with the commission. The commission shall promulgate rules and regulations regarding application procedures. The application shall include: 1. The full name and address of the applicant, and if a corporation, the name of the state under which it is incorporated. If such applicant is an association or corporation, the residence addresses of the members of the association and the names of all directors of the corporation shall be included, and the stock certificate records of such applicant shall be made available to the department on request of the director. The department shall be notified within ten days of the election of any new officer or director of a permittee, and the identity of every person who acquires ten percent or more of a permittee's equity or interest. Each new officer, director or substantial owner shall furnish all information requested by the department to facilitate approval of his participation in racing in this state. 2. The exact location where it is desired to conduct or hold a racing meeting. 3. A statement as to whether or not the racing plant is owned or leased, and if leased, the name and residence of the fee owner, or if a corporation, the names and addresses of the directors of the corporation. 4. A complete financial statement and balance sheet of the person, corporation or other business entity making such application, completed and certified by a certified public accountant. In the case of applications for renewal of dog racing meeting permits that were in existence before May 5, 1972, such financial statement and balance sheet shall be on a calendar year basis. In the case of applications for renewal of horse or harness racing meeting permits that were in existence before May 5, 1972, such financial statement and balance sheet shall be on a fiscal year basis. In the case of all new permit applications made from and after May 5, 1972, and renewal applications of such permits, such financial statement and balance sheet shall be on either a calendar year or fiscal year basis, at the discretion of the department. In addition, the application shall identify any guarantors or any indebtedness of the applicant, and the department shall be provided, on request, with a statement from a certified public accountant certifying that the net worth of any guarantor or guarantors is at least equal to the amount of the unpaid indebtedness so guaranteed. Applications for racing meetings operated by county fair racing associations are exempt from this paragraph. 5. A complete list of all management and concession contracts in effect at the time of the application, copies of which shall be furnished to the department on request. If the applicant is granted a permit he shall further be required, on the request of the department, to submit a complete list of all subsequent management and concession contracts, and copies of such contracts shall be submitted to the department on request. 6. Such other relevant and material information pertaining to the application as the department may require. C. Not less than ten days before the commencement of a commercial racing meeting, the permittee shall submit to the department a cash deposit in such amount, but not to exceed five thousand dollars, as the director deems necessary to insure payment of fees and the amount due the state as the percentage of pari-mutuel receipts payable to the state as prescribed by law. On termination of the racing meeting, the deposit shall be returned to the applicant, less any fees or pari-mutuel receipts remaining unpaid. D. In addition to the cash deposit and before the issuance of a racing meeting permit, the applicant shall deposit with the department a bond payable to the state for the benefit of the state and any person covered by this section, in such amount, but not to exceed three hundred thousand dollars in the case of horse or harness racing meeting permittees, as the director deems necessary, with a surety or sureties to be approved by the department and the attorney general and conditioned in accordance with the following order of priorities: 1. That the permittee shall first faithfully pay to the state the percentage of the pari-mutuel receipts, as applicable, prescribed by law and all taxes due to the state. 2. That thereafter the permittee shall pay to the owner thereof all funds held by the permittee for the account of such owner, including purses won, if such owner is or has been licensed by the department. 3. That thereafter the permittee shall pay all salaries and wages due to the employees of such permittee in connection with the conduct of the racing meeting. 4. That thereafter the permittee shall pay all amounts due to the breeder of any horse for a breeder's award. E. Any person, including the state, claiming against the bond may maintain an action at law against the permittee and the surety or sureties, and the surety or sureties may be sued on the bond in successive actions until the penal sum thereof is exhausted. If it appears that there is more than one claim on such bond or if it appears that the state may have an interest therein, the state or any other claimant may move the court in which such actions are filed to intervene or to consolidate such actions to determine the priority order of claims in accordance with subsection D of this section. No suit may be commenced on the bond after the expiration of one year following the day of the closing of the racing meeting during which any act or failure to act giving rise to a claim against the bond shall arise. F. The bond prescribed by this section shall be effective for the period of the racing permit granted by the commission, and the liability of the surety for all claims shall be limited to the face amount of the bond. If the surety desires to make payment without awaiting court action, the amount of any bond filed in compliance with this chapter shall be reduced to the extent of any payments made by such surety in good faith thereunder. Any such payment shall be based first on the priority of claim order as established by subsection D of this section and thereafter on the priority of the date the written claims are received by the surety before court action. 5-107.01. Necessity for permits for racing meetings; licenses for officials and other persons; unauthorized racing meetings; violation; classification A. A person, association or corporation shall not hold any racing meeting without having first obtained and having in full force and effect a permit that is issued by the department. B. A trainer, driver, jockey, apprentice jockey, horse owner, exercise rider, agent, jockey's agent, stable foreman, groom, valet, veterinarian, horseshoer, steward, stable watchman, starter, timer, judge, food and beverage concessionaire, manager or other person acting as a participant or official at any racing meeting including all employees of the pari-mutuel department and any other person or official the department deems proper shall not participate in racing meetings without having first obtained and having in full force and effect a license or credentials that are issued by the department, pursuant to such rules as the commission shall make. The department shall not revoke a license except for cause and after a hearing. C. Each person, association or corporation that holds a permit or a license under this chapter shall comply with all rules and orders of the commission or department. D. Any credential or license that is issued by the department to a licensee shall be used only as prescribed by commission rule or order of the director. Use for purposes other than those prescribed is grounds for suspension or revocation or imposition of a civil penalty as provided in section 5-108.02, subsection E. E. All applicants for a permit or license shall submit to the department a full set of fingerprints, background information and the fees that are required pursuant to section 41-1750. The department of gaming shall submit the fingerprints to the department of public safety for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. The applicant shall pay the fingerprint fee and costs of the background investigation in an amount that is determined by the department. For such purpose the department of gaming and the department of public safety may enter into an intergovernmental agreement pursuant to title 11, chapter 7, article 3. The fees shall be credited pursuant to section 35-148. F. The director may issue a temporary license to an owner, trainer, driver or jockey who is duly licensed in another jurisdiction for special races or special circumstances for a period of not to exceed thirty days. The director may allow a trainer so licensed to complete an application for a temporary license for an owner if the owner is not immediately available to personally submit the application. G. A licensed owner, lessee or trainer of a qualified horse who has applied to a permittee to be stabled at a track and who has not been granted a stall shall not be prohibited from bringing the horse on the race grounds for the purpose of entering the animal in races that are held by the permittee or for the purposes of qualifying to race solely for the reason that the animal is not being stabled at the track if the owner, lessee or trainer is in compliance with rules adopted by the commission. H. A person, association or corporation that knowingly holds an unauthorized racing meeting is guilty of a class 6 felony. 5-107.02. Qualification for eligibility of racing meeting operator No person, association or corporation is eligible to operate a racing meeting with a permit issued under this chapter unless he is an owner or the lessee of the track named in the permit. A permit shall not be issued to any corporation or association unless the corporation or association in its application for the permit has specifically named the manager who will operate the racing meeting, has supplied the department with all relevant information concerning this manager including his relationship with the corporation or association, any previous experience in the racing field, and any other relevant and material information the commission may have requested, and has obtained the commission's approval of the manager so named in the application. 5-107.03. Separate financial records of permittee and concessionaire; violations A. Each permittee and each concessionaire who has a proprietary interest in a permit shall keep separate financial books, statements and records with respect to the operations conducted by him at each particular place, track, additional wagering facility or enclosure. A commercial racing permittee and concessionaire shall keep and maintain the financial books, statements and records in accordance with generally accepted accounting principles so as to reflect accurately the operations conducted by each permittee and concessionaire who has a proprietary interest in a permit. A county fair racing association may keep and maintain the financial books, statements and records on a cash basis on approval of the department. Such financial books, statements and records shall be open for examination by the director or his designated representative. B. All financial information that is given by a commercial racing permittee or concessionaire to any state agency, body or department shall accurately reflect the total income of each permittee and concessionaire who has a proprietary interest in a permit from each particular place, track or enclosure. C. Any violation of this section by any permittee is a ground for refusal to renew or for the revocation of a permit only after written notice to the permittee and a full hearing thereon. 5-108. Issuance of permit or license; grounds for refusal to issue; nontransferable; renewal A. The department shall conduct a thorough investigation concerning the application for a permit or a license and: 1. The department may refuse to issue or renew a license or the commission may refuse to approve or renew a permit for any applicant if there is substantial evidence to find that the applicant: (a) Has been suspended or ruled off a recognized course in another jurisdiction by the racing board or commission thereof. (b) Has, when previously licensed or granted a permit, violated the racing laws of this state or of any other state or the regulations of the commission. (c) Is a corporation, firm or association not duly qualified and authorized to conduct business within this state. (d) If an individual, has been convicted of a felony or any crime involving moral turpitude, or, if a corporation, firm or association, is controlled or operated directly or indirectly by a person or persons who have been convicted of a felony or any crime involving moral turpitude. (e) If an individual, is engaged in or has been convicted of wagering by other than the mutuel method or in pool selling or bookmaking in any state of the United States or foreign country where such other method, pool selling or bookmaking is illegal or, if a corporation, firm or association, is controlled or operated directly or indirectly by a person who is engaged in or has been convicted of wagering by other than the mutuel method or in pool selling or bookmaking in any state of the United States or foreign country where such other method, pool selling or bookmaking is illegal. (f) Has wilfully violated any provision of this chapter or any of the rules and regulations of the commission. (g) Should not, in the best interest of the safety, welfare, economy, health and peace of the people of the state, be granted a license or permit. (h) Has entered into any contract or contracts that will not further the best interests of racing or be in the public interest or, in the case of permittees or applicants for permits to conduct racing meetings, has failed to file with the department a contract, as an addendum to an application for a permit to conduct a racing meeting, providing for food and beverage concession rights, if any, at that racing meeting. A food and beverage concessionaire contract filed with the department pursuant to this section shall be available to the public on request. (i) Has failed to inform the department on or before May 15 of each year in writing of any material change, occurring during the immediately preceding year of the license or permit term, in the information supplied by the applicant in the application, for a license or permit. If a licensee or permittee fails to file such information, the department shall notify the licensee or permittee of the failure to file and the licensee or permittee shall have an additional fifteen days, after the notice is mailed to the last known address of the licensee or permittee, to file the information. 2. The commission may refuse to approve or renew a permit to conduct a racing meeting or a food and beverage concessionaire license for any ground set forth in paragraph 1 of this subsection or if there is substantial evidence to find that: (a) The applicant is not possessed of or has not demonstrated financial responsibility sufficient to meet adequately the requirements of the enterprise proposed to be authorized. (b) The applicant is not the true owner of the enterprise proposed to be granted a permit, that other persons have ownership in the enterprise and that fact has not been disclosed or, if the applicant is a corporation, that ten percent of the stock of the corporation is subject to a contract or option to purchase at any time during the period for which the permit is issued unless the contract or option was disclosed to the department and the department approved the sale or transfer during the period of the permit. (c) The granting of a permit or license in the locality set out in the application is not in the public interest or convenience. (d) The applicant, if a corporation or any holder of more than ten percent of the outstanding stock of any class, transferred, pledged or in any other way collateralized any of its stock after an application for a permit or license was filed with the department, without prior department approval. Subdivision (b) of this paragraph and this subdivision do not apply to day-to-day transfers of stock of a publicly held corporation unless the transfer, or a combination of transfers, involves a controlling interest in or affects the operational control of the corporation, or involves ten percent or more of any class of stock of the corporation owned by the controlling shareholders or the manager of any racing meeting. (e) The applicant has, or if the applicant is a corporation, its officers, managerial employees, directors or substantial stockholders have, committed acts of moral turpitude in this state or have wilfully violated a material racing statute of this state or a material rule or regulation of the commission. If the commission makes such a finding, with respect to an officer, managerial employee, director or substantial stockholder, the applicant may be denied a permit only on the failure to remove the officer, managerial employee or director or the failure of the substantial stockholder to sell its stock interest. For purposes of this subdivision a substantial stockholder is one who owns ten percent of the issued and outstanding stock of the applicant. 3. The department may deny or refuse to renew a license or the commission may refuse to approve or renew a permit for any person who has made a knowingly false statement of a material fact to the department. 4. The department may deny or refuse to renew a license or the commission may refuse to approve or renew a permit to any applicant if the applicant has failed to meet any monetary obligation in connection with any racing meeting held in this state. 5. The department shall refuse to issue or renew a license or the commission shall refuse to approve or renew a permit for any applicant if there is substantial evidence to find that the applicant, if an individual, has been convicted within the last five years of a felony or any crime involving moral turpitude or, if a corporation, firm or association, is controlled or operated directly or indirectly by a person or persons who have been convicted within the last five years of a felony or any crime involving moral turpitude. B. The department, in conducting the investigation referred to in this section, shall have the full cooperation of all state agencies and departments, including the department of public safety, and the agencies and departments shall make their personnel available to the department, on request. C. If the commission determines that the applicant for a permit, whether such applicant is a lessee or an individual or corporate owner of the tracksite, meets the requirements prescribed by this article and the rules and regulations of the commission, it shall approve the permit. The permit shall be approved for a period of not more than three years. Any renewal of a permit shall be pursuant to subsection D of this section. D. Except as provided by subsection C of this section, permits shall be renewed for successive periods of not more than three years unless the commission revokes the permit or refuses to renew the permit for any of the grounds enumerated in this section or section 5-108.03. The renewal of a permit shall be denied only after a full hearing and a finding of good cause for refusing renewal has been made by the commission. E. The director shall suspend or revoke a license or the commission shall deny or revoke a permit of a person who intentionally provides false information to the department or any other governmental agency concerning the person's criminal history background. The director may suspend or revoke a license or the commission may deny or revoke a permit of a person who negligently or recklessly provides false information to the department or any other governmental agency concerning the person's criminal history background. F. Except as provided by this subsection, the director may grant a license or the commission may approve a permit to engage in the racing industry in this state only after all necessary investigation of the background of the applicant required by this article has been completed. A temporary permit approved by the commission or a temporary license valid for a period of not more than ninety days may be issued by the director before the time the investigation of the background of the applicant for the license or permit has been completed. After a temporary license or permit has been issued, the director may suspend or revoke a temporary license or the commission may revoke a temporary permit for any reason that would be grounds to refuse to issue, approve or renew a license or permit under subsection A of this section. 5-108.01. Hearing on application for or renewal of original permit; notice of hearing; decisions of commission and director; appeal; transfer of permit A. The commission shall hold a public hearing on an original application for a racing permit or renewal of a current racing permit under this article. At least fifteen days' notice shall be given to all permittees holding a permit, and they may appear and be heard as parties in interest upon the hearing of an application. B. The commission may provide by rule for rehearings of any final decision of the department in accordance with section 5-104, subsection D. Except as provided in section 41-1092.08, subsection H, the parties to the proceeding before the commission or department may commence an action in the superior court in Maricopa county after a decision of the commission or director has become final to review the decision pursuant to title 12, chapter 7, article 6. Pending determination of the appeal, the decision and order shall remain in full force and effect, and may not be superseded. C. The commission shall not approve an original permit to conduct a horse racing, harness racing or dog racing meeting at any place, enclosure or track not used for racing purposes pursuant to permits actually issued as authorized by law prior to February 1, 1971, unless before the beginning of construction or preparation of the place, enclosure or track the commission determines that each of the following applies: 1. The conducting of horse, harness or dog racing meetings at such place will serve the public interest, convenience or necessity. 2. The plan of racing is economically feasible. 3. The issuance of a permit is in the best interest of racing and this state generally. D. No place, enclosure or track used for horse, harness or dog racing on or before February 1, 1971 may be used for any other type of animal racing, except that in counties with a population of less than seven hundred thousand persons as shown by the last United States census, a place, enclosure or track used for one type of animal racing may be used for any other type of animal racing. In considering an application for a permit under this section, the commission shall give consideration to the number and location of existing tracks, the number of permits already granted and the economic effect the granting of a new permit may have on existing tracks and permittees and the revenues of this state. E. If the owner or lessee of any place, enclosure or track used for racing purposes pursuant to permits issued as authorized by law on or before February 1, 1971 is obligated for any reason to abandon the use of the place, enclosure or track, the owner or lessee may transfer the use and rights to use the premises for racing purposes to any other location in the same county. 5-108.02. Revocation of permits; penalties A. The commission may revoke the permit of any permittee upon any of the grounds upon which the commission could refuse to approve a permit in section 5-108 or who has failed to pay the department all sums required under this chapter. B. The commission may revoke the permit to hold a racing meeting of any corporate permittee which transfers ten per cent of its stock after a permit to hold a racing meeting is issued, and before the termination of the permit period, except as authorized in section 5-108, subsection A, paragraph 2, subdivision (d). C. Revocation shall be made only after a hearing before the commission for which ten days' notice in writing by certified mail has been given to the permittee specifying the grounds for the proposed revocation. D. At the hearing, the permittee shall be given an opportunity to be heard and present evidence in opposition to the proposed revocation. E. When the grounds exist for the imposition of a civil penalty or revocation of a permit issued pursuant to this chapter the department may impose a civil penalty, not to exceed five thousand dollars per day nor more than a total of twenty-five thousand dollars, on the permittee in lieu of or in addition to revocation of the permit by the commission. The department in addition to any criminal penalties provided in this chapter may levy a civil penalty as to a permittee in an amount not to exceed five hundred dollars for violation of any provision of this chapter or rule or regulation adopted pursuant to this chapter which does not constitute grounds for revocation of a permit. All sums paid to the department pursuant to this subsection shall be deposited in the general fund. 5-108.03. Restrictions on ownership of licenses, permits and tracks; exemptions; sale for fair market value A. From and after December 31, 1978, no person, firm, partnership, corporation or association or any affiliate thereof shall simultaneously hold or have an ownership interest, direct or indirect, in permits to conduct racing meetings at more than four racetracks within this state. For the purpose of this chapter a person, firm, partnership, corporation or association holding or having an ownership interest, direct or indirect, in a place, enclosure or track at which a racing meeting is conducted in this state shall be considered as holding an ownership interest in the permit or permits issued for a racing meeting at that location. This subsection shall not apply with respect to a corporation unless the person, firm, partnership, corporation or association otherwise subject to the provisions of this subsection owns or controls ten per cent or more of any class of stock of the corporation. B. From and after December 31, 1978, no person, firm, partnership, corporation or association or any affiliate thereof, which holds or has an ownership interest, direct or indirect, in a permit to conduct a racing meeting within a county having a population of seven hundred thousand persons, or more, as shown by the last United States decennial census, shall simultaneously hold or have any ownership interest, direct or indirect, in a permit to conduct the same kind of racing within any other county having a population of seven hundred thousand persons, or more, as shown by the last United States decennial census. C. For the purposes of subsections A or B of this section, a person, firm, partnership, corporation or association shall be considered as itself holding or having any ownership interest held directly or indirectly by its affiliates. For the purposes of this chapter, one person, firm, partnership, corporation or association shall be considered the affiliate of another person, firm, partnership, corporation or association if any of the following applies: 1. They are either directly or indirectly under common control. 2. Any officer, director, manager, partner, supervisor, substantial stockholder, owner, trustee or administrator of one person, firm, partnership, corporation or association is an officer, director, manager, partner, substantial stockholder, owner, trustee or administrator of the other person, firm, partnership, co