LAW AND PUBLIC SAFETY

NEW JERSEY RACING COMMISSION

Off-Track Wagering and Account Wagering

Proposed New Rules: N.J.A.C. 13:74

Authorized By: New Jersey Racing Commission, Frank Zanzuccki, Executive Director

Authority: N.J.S.A. 5:5-30

Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Proposal Number: PRN 2001 - 460

Submit written comments by February 1, 2002, to:

Frank Zanzuccki, Executive Director

New Jersey Racing Commission

P.O. Box 088, 140 E. Front St.

Trenton, New Jersey 08625-0088

The agency proposal follows:

Summary

The primary objective of proposed new rules N.J.A.C. 13:74 is to establish the rules necessary for the implementation of off-track wagering and account wagering in New Jersey, which was authorized by the Off-Track and Account Wagering Act ("Act"), P.L.2001, c. 199, approved August 5, 2001. Section 33 of the Act provides that the New Jersey Racing Commission ("Racing Commission" or "Commission") shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (N.J.S.A. 52: 14B-1 et seq.), to effectuate the purposes of the Act.

The proposed new rules create a new chapter, N.J.A.C. 13:74, which generally establishes the rules governing off-track wagering and account wagering. These rules also reference existing rules of the Commission. Those rules consist of N.J.A.C. 13:70, 13:71 and 13:72. N.J.A.C. 13:70, Horse Racing, consists of the Commission's rules governing the conduct of thoroughbred racing in this State. N.J.A.C. 13:71, Harness Racing, consists of the Commission's rules governing harness or standardbred racing in this State. N.J.A.C. 13:72, Casino Simulcasting, consists of the Commission's rules governing the conduct of casino simulcasting in this State. The Commission regulates casino simulcasting jointly with the New Jersey Casino Control Commission, whose counterpart rules concerning casino simulcasting appear at N.J.A.C. 19:55. The Commission also has rules, not referenced within proposed new rules N.J.A.C. 13:74, which appear at N.J.A.C. 13:73. These rules relate to workers' compensation insurance coverage for horse racing industry employees.

N.J.A.C. 13:74 contains 11 subchapters. Subchapter 1 sets forth definitions and generally provides that, except as provided therein and as otherwise provided in the Act, the rules of racing and conduct of pari-mutuel wagering in off-track wagering facilities, or in connection with account wagering, shall be subject to the rules of the Racing Commission. Because the conduct of casino simulcasting is the subject of existing rules, the definition of "off-track wagering facility" within subchapter 1 specifically excludes from its meaning casino simulcasting facilities operated within the premises of an Atlantic City casino hotel.

Subchapter 2 addresses the application procedure for an initial one-year off-track wagering license, and the renewal of that license. N.J.A.C. 13:74-2.1 sets forth the prerequisites to and procedures for the grant of an initial off-track wagering license. Subsection (k) to this section provides, as required by the Act, that the Commission shall issue no more than 15 off-track wagering facility licenses, and no more than 8 such licenses during the two-year period commencing on the effective date of the Act. Since the pertinent provisions of the Act become effective February 5, 2002, this two-year period would expire February 5, 2004.

N.J.A.C. 13:74-2.1 further provides that the New Jersey Sports and Exposition Authority ("Authority"), who is the eligible party for an off-track wagering license under the Act, is required to file and application for each proposed off-track wagering facility together with a non-refundable $2,500 filing fee. In order for the application to be complete, this rule provides that certain prerequisites must be demonstrated by the Authority, including its compliance with minimum live race dates as required by the Act, and its entry into a participation agreement for off-track wagering with all eligible live race permit holders or successors in interest that held a valid race permit in 2000 (that is, in addition to the Authority as concerns Monmouth Park and the Meadowlands Racetrack, the permit holder or successor in interest that conducted live racing in 2000 at Garden State Park, the Freehold Raceway and the Atlantic City Race Course), who themselves must meet certain prerequisites set forth in the Act including being in good standing with the Commission and State. Additionally, the Authority must demonstrate through its application that the requirements of the Act have been satisfied, including that the governing body of the local municipality within which the proposed off-track wagering facility is to be sited has not issued a resolution disapproving the proposed off-track wagering facility. The Authority, among other things, must in its application for an off-track wagering facility disclose the physical plan and location of the proposed facility, the number of jobs expected to be created and evidence that the facility complies with the Act's requirements. The Authority must also include with its application, and is required to maintain and keep current, written internal control procedures which shall set forth procedures to be implemented to effectively operate and manage the proposed off-track wagering facility and to maintain the integrity of wagering and proceeds from wagering. These internal control procedures, as required by N.J.A.C. 13:74-2.1(d), must also include a procedure to foster and insure that the off-track wagering licensee complies with the requirement of the Act creating a right of first refusal as to certain individuals for certain employment opportunities associated with off-track wagering.

Following receipt of an initial application for a specific off-track wagering facility, and a determination by the Racing Commission's Executive Director that it is complete, subsection (g) to N.J.A.C. 13:74-2.1 requires that the Commission within 45 days hold a public hearing at the cost of the Authority in the municipality where the proposed off-track wagering facility is to be located. Subsection (h) to N.J.A.C. 13:74-2.1 requires that, between 30 days and 60 days following the conclusion of that public hearing, the Commission make a determination on the application considering various factors delineated in the rule. These include that the Authority has by clear and convincing evidence demonstrated that the grant of a license would not be inimical to the interests of the public and the horse racing industry in this State, that the participation agreement meets the requirements of the Act to the satisfaction of the Commission and Attorney General, and that the Authority has made reasonable efforts to address the reasonable concerns of the appropriate municipal planning board. Following the Commission's determination on the application, the determination is to be submitted to the Attorney General for review and approval, and the decision of the Attorney General shall be deemed a final decision. An issued off-track wagering license is required to set forth items such as the effective dates of the one year license, the maximum operating hours for the off-track wagering facility, and any other conditions required by the Commission.

N.J.A.C. 13:74-2.2 sets forth the requirements for the one-year renewal of a previously issued off-track wagering license. It requires that the Authority, or its successor in interest, make application to the Commission for a renewal license accompanied by a non-refundable $1,250 filing fee. A renewal license is to run for the period January 1 to December 31 of the same year. However, subsection (b) to this section, in order to achieve a consistent renewal date for each off-track wagering license which may be granted, provides that an initial off-track wagering facility license granted pursuant to N.J.A.C. 13:74-2.1 may on a one-time basis be renewed to the last day of December of the year in question where that initial license expires prior to that time within the same year. Thus, for example, assuming an initial license is granted for the period August 5, 2002 to August 5, 2003, the Commission could renew that license to the end of December 2003. Thereafter, any renewal license for the facility in question would run from January 1 to December 31. This section also sets forth the requirements for the filing of an off-track wagering facility license renewal application. It requires that a hearing on the application be conducted by the Commission, at cost to the applicant, which hearing may be held at a properly and regularly convened public meeting of the Commission and at a location within the Commission's discretion. The hearing procedure, and the procedure for the issuance of a renewal license, are also set forth in this section.

Subchapter 3 addresses the application procedure for an initial one-year account wagering license, and the renewal of that license. N.J.A.C. 13:74-3.1 sets forth the prerequisites to and procedures for the grant of an initial off-track wagering license. Subsection (f) provides that the Commission may accept an initial application for an account wagering license prior to the pertinent effective date of the Act, or prior to February 5, 2002, but may not conduct a hearing on the application or render a decision on the application until after that date.

N.J.A.C. 13:74-3.1 requires that the Authority, who is the eligible party for an account wagering license under the Act, is required to file an application for such license with a non-refundable $7,500 filing fee. In order for the application to be complete, this rule provides that certain prerequisites must be demonstrated by the Authority, including its compliance with minimum live race dates as required by the Act, and its entry into a participation agreement for account wagering with all eligible live race permit holders or successors in interest that held a valid race permit in 2000 consisting of an aggregate 40 live race dates (that is, in addition to the Authority as concerns Monmouth Park and the Meadowlands Racetrack, the permit holder or successor in interest which conducted live racing at Garden State Park and the Freehold Raceway), who themselves must meet certain prerequisites set forth in the Act including being in good standing with the Commission and State. The Authority, among other things, must in its application for an account wagering license disclose its participation in the proposed account wagering system, the participation of other persons in the account wagering system, the particular plan, location and functions of the phone bank to be utilized in connection with account wagering, a detailed description of the proposed account wagering system, and the proposed maximum hours of operation for the account wagering system. The Authority must also include with its application, and is required to maintain and keep current, written internal control procedures setting forth procedures to be implemented to effectively operate and manage the racing and pari-mutuel aspects of the account wagering system. These procedures, as set forth in N.J.A.C. 13:74-3.1(d), must also include a procedure to foster and insure that the account wagering licensee complies with the requirement of the Act creating a right of first refusal as to certain individuals for certain employment opportunities associated with the account wagering system.

Following receipt of an application for the account wagering license, and a determination by the Racing Commission's Executive Director that it is complete, subsection (g) to this rule requires that the Commission within 45 days hold a public hearing at the cost of the Authority, which may be conducted at a properly and regularly convened public meeting of the Commission at a location determined by the Commission. Subsection (h) to N.J.A.C. 13:74-3.1 requires that, between 30 and 60 days following the conclusion of the public hearing, that the Commission make a determination on the application considering various factors delineated in the rule. These include that the Authority has by clear and convincing evidence demonstrated that the grant of a license would not be inimical to the interests of the public and the horse racing industry in this State, and that the participation agreement meets the requirements of the Act to the satisfaction of the Commission and Attorney General. Following the Commission's determination on the application, the determination is to be submitted to the Attorney General for review and approval, and the decision of the Attorney General shall be deemed a final decision. The issued account wagering license is required to set forth items such as the effective dates of the one-year license, the methods of account wagering authorized by the issued license, and such other conditions as the Commission determines appropriate.

N.J.A.C. 13:74-3.2 sets forth the requirements for the one-year renewal of a previously issued account wagering license. It requires the account wagering licensee, or its successor in interest, to make application to the Commission for a renewal license accompanied by a non-refundable $5,000 filing fee. A renewal license is to run for the period January 1 to December 31 of the same year. However, subsection (b) to this section, in order to achieve a consistent renewal date for the account wagering license, off-track wagering licenses and live race permits issued by the Commission, provides than an initial account wagering license may on a one-time basis be renewed to the last day in December of the year in question where that initial license expires prior to that time within the same year. Thus, for example, where an initial license is granted for the period September 23, 2002 to September 23, 2003, the Commission could renew that license to the end of December 2003. This section sets forth the requirements for the application. It also sets forth a requirement that a hearing on the application be conducted by the Commission at cost to the applicant.

Subchapter 4, through N.J.A.C. 13:74-4.1, sets forth the prerequisites and procedures for the transfer or assignment of an off-track wagering license or the account wagering license. This can only be accomplished upon application to the Commission, the Commission's initiation and conduct of an investigation into the qualifications of the proposed transferee or assignee (at cost to it) and, among other things, the approval of the Attorney General. N.J.A.C. 13:74-4.2 sets forth the procedures which must be followed where the off-track wagering licensee or account wagering licensee seeks to designate another person or entity to conduct or operate an off-track wagering facility for it, or to act as an agent on its behalf. This requires the approval of the Commission, and that a written contract or agreement be entered into between the parties. In such case, the person or entity that is proposed to operate the off-track wagering facility or account wagering system or facility must demonstrate to the Commission that it is qualified to hold a Commission issued license to engage in such activities.

Subchapter 5 concerns licensing, penalties for violations and the hearing process. N.J.A.C. 13:74-5.1 sets forth who must be licensed. N.J.A.C. 13:74-5.9 provides that the Commission or its Executive Director may impose conditions with regard to any license issued. N.J.A.C. 13:74-5.8 concerns standards of licensure, the conditions under which the Commission may grant, may refuse to grant or may refuse to renew a license, and license procedures. It provides that an applicant who is denied a license may appeal the license denial to the Commission in accordance with N.J.A.C. 13:74-5.12. N.J.A.C. 13:74-5.14 provides that reciprocity shall be given to the denial, revocation or suspension of any license by any other Racing Commission or similar authority.

N.J.A.C. 13:74-5.1 provides that, in addition to the off-track wagering licensee and account wagering licensee pursuant to subchapters 2 and 3, respectively, the following persons must be licensed by the Commission: a person to whom an off-track or account wagering license is to be assigned pursuant to N.J.A.C. 13:74-2.2; a party subject of a written agreement or contract pursuant to N.J.A.C. 13:73-3.2 concerning the operation of an off-track wagering facility or an account wagering system or facility; the hub facility required to be utilized by the off-track wagering licensee and account wagering licensee by N.J.A.C. 13:74-8.1(b), its employees and supervisors; individuals employed at an off-track wagering facility and in connection with the account wagering system; and certain vendors to an off-track wagering facility and to the account wagering system unless an exemption is granted pursuant to N.J.A.C. 13:74-5.1(f). All licensees, as required by N.J.A.C. 13:74-5.6 must be at least 18 years of age. The non-refundable license fee for each class of license, which runs for a one year period from January 1 to December 31, ranges from $10.00 to $50.00 as set forth in the rule and is payable upon the filing of a license application. Where a person or vendor is licensed by the Commission pursuant to N.J.A.C. 13:70, 13:71 or 13:72, and certain conditions are satisfied as set forth in subsection (h) to N.J.A.C. 13:74-5.1 (including an endorsement of such license by the Commission), a license pursuant to this chapter need not be taken out by such person. N.J.A.C. 13:74-5.1 also imposes reporting requirements on the off-track wagering licensee and account wagering licensee where they do more than $10,000 of business with any non-licensed vendor in any calendar year.

N.J.A.C. 13:74-5.4 provides that the Commission may request social security numbers to be furnished for use in determining an applicant's eligibility for licensure consistent with N.J.A.C. 13:71-7.37, which sets forth certain restrictions and limitations in such regard. N.J.A.C. 13:74.5.5 states that all licensees will be required, at the cost of each respective licensee, to be fingerprinted, photographed, and to pay for any related criminal history check. N.J.A.C. 13:74-5.7 requires that all Commission licensed personnel employed at an off-track wagering facility, or at the premises of the account wagering licensee, wear a Commission approved identification tag of the appropriate licensee, and carry on their person their Commission authorized badge. Where no identification tag of the licensee has been approved for use by the Commission, such persons are required to wear their Commission authorized badge. For violations of this requirement, N.J.A.C. 13:74-5.7 sets forth penalties.

N.J.A.C. 13:74-5.10 sets forth the penalties, which include license suspension or revocation and a fine, which may be imposed for violations to this chapter. It provides that where a license is suspended or revoked, the licensee subject to the action shall be ordered not to appear at any premises subject to the jurisdiction of the Commission. Except as provided in N.J.A.C. 13:74-5.10(e), which allows for an immediate suspension of a license in limited circumstances related to an indictment on criminal charges, N.J.A.C. 13:74-5.12 provides that before a licensee is disciplined or suspended a hearing shall be held and provides that the costs incurred in connection with any hearing shall be paid by the licensee. N.J.A.C. 13:74-5.13 concerns the appeal procedure where a penalty has been issued or adopted in a final decision, and sets forth a procedure for the filing with the Executive Director a request seeking a stay of the imposition of a penalty imposed upon a licensee pending the disposition of any appeal.

Subchapter 6 concerns standards for off-track wagering facilities. N.J.A.C. 13:74-6.1 sets forth standards relating to square footage, amenity and safety requirements to promote patron comfort and safety. It provides that the dining and handicapping facilities to be offered at an off-track wagering facility be approved by the Commission. It also requires that surveillance equipment be installed and maintained in certain areas of off-track wagering facilities, and that equipment or software be subject to a testing procedure before implementation in connection with off-track wagering. It requires that each off-track wagering facility establish a secure "money room," and establish written procedures to accurately account for and track proceeds from the placement of a wager to delivery of the related funds to the money room and ultimate distribution of such funds as required by the Act. This subchapter also sets forth race-related information which off-track wagering facilities are required to make available to its patrons, which information is consistent with that generally available at New Jersey racetracks.

Subchapter 6 also contains rules concerning when tickets on pari-mutuel races may be sold at off-track wagering facilities, when refunds on such tickets may be issued, and conditions under which patrons may cancel purchased tickets. N.J.A.C. 13:74-6.8 provides that payment of wagers will be made only upon the presentation of appropriate pari-mutuel tickets and, in the absence of a regulation promulgated pursuant to N.J.A.C. 13:70 or 13:71, credit vouchers. N.J.A.C. 13:74-6.9 provides for a six-month expiration period for pari-mutuel tickets, and requires that this requirement be prominently posted in an off-track wagering facility and that it be printed on each pari-mutuel ticket sold. This rule also provides that credit vouchers issued at an off-track wagering facility shall not expire. N.J.A.C. 13:74-6.10 prohibits the off-track wagering licensee from charging any fee in connection with the placing of a wager, but does not prohibit a Commission approved fee from being charged for admission to an off-track wagering facility. It also provides a mechanism for off-track wagering patrons to file written complaints with the Commission.

N.J.A.C. 13:74-6.14 prohibits persons under 18, unless accompanied by a parent or guardian in dining areas, from maintaining a presence at off-track wagering facilities. It also precludes persons under suspension or otherwise not in good standing with the Commission from maintaining a presence at off-track wagering facilities.

Subchapter 7 sets forth standards for the account wagering system. It includes a requirement, as set forth in N.J.A.C. 13:74.7.9, that equipment or software be subject to a testing procedure before implementation in connection with account wagering. N.J.A.C. 13:74-7.8 includes a requirement that the account wagering licensee utilize a single phone bank facility located in this State, unless the Commission approves the establishment of more than one such facility in this State, to receive and process all wagers placed by telephone from account holders through live operators or through an automated telephone wagering system. It is also requires that the phone bank facility, unless another location in this state is approved for such purpose by the Commission, perform other duties related to the account wagering system as set forth in N.J.A.C. 13:74-7.8. These duties include the processing of account wagers placed by computer or other electronic means approved by the Commission, the processing of account wagering applications, and the conduct of all administrative matters related to the maintenance of wagering accounts.

N.J.A.C. 13:74-7.1 sets forth the conditions precedent to the establishment of a wagering account. It requires, among other things, that an account holder be 18 years of age or older, a resident of New Jersey, and that the account be established in the name of a natural person only. It sets forth how and where applications for wagering accounts may be filed, and what notices and information must be supplied to the prospective account holder by the account wagering licensee. N.J.A.C. 13:74-7.2 requires that each application be reviewed by the account wagering licensee for compliance with the Act and this chapter, and sets forth the circumstances under which the account wagering licensee may reject an application, suspend an account, or close an account. Where an application is rejected, suspended for 48 hours or more, or closed by the account wagering licensee, although such actions constitute a final decision on the part of the account wagering licensee and are not subject to any appeal to the Commission, N.J.A.C. 13:74-7.2(d) requires that the account wagering licensee file a report disclosing such action with the Commission.

The various restrictions relating to the placing and acceptance of account wagers, including that account wagers may only be accepted from New Jersey residents, are set forth in N.J.A.C. 13:74-7.3. N.J.A.C. 13:74-7.10 sets forth the facilities at or through which the account wagering licensee may accept wagers from account holders consistent with its internal control procedures. Such wagers may be accepted by telephone, by computer, at the premises of an off-track wagering licensee, at the premises of a permitted racetrack facility or successor in interest, and by such other electronic or other means and at such other premises upon application to and a determination by the Commission that such would be consistent with the Act and this chapter.

The manner and methods to credit a wagering account are contained in N.J.A.C. 13:74-7.4. While deposits to a wagering account may be made by an account holder through means including cash deposit, use of a credit or debit card, electronic transfer, etc., all deposited funds must be administratively processed by the account wagering licensee and satisfy any banker's or other clearance requirements before such funds may be made available for wagering. A wagering account may also be credited by the account wagering licensee for winning pari-mutuel wagers, refunded pari-mutuel tickets, and wagers properly cancelled pursuant to N.J.A.C. 13:74-7.6. The funds on deposit in a wagering account do not bear interest to the account holder, as provided in N.J.A.C. 13:74-7.4.

The manner and methods to debit a wagering account are contained in N.J.A.C. 13:74-7.5. A debit to an account can occur as a result of the account holder's placing of a wager or withdrawing funds from his or her account in accordance with the procedures set forth in this rule.

Subchapter 7 also contains a provision that, while the account wagering licensee has discretion in terms of what race information to make available to account holders, account holders who wager through their accounts and in person at off-track wagering facilities or permitted racetracks in this state shall have race information made to available on the same terms as other patrons of such facilities. All takeouts from wagers placed at an off-track wagering facility or permitted racetrack facility, utilizing a wagering account, are to be treated as if the wager were placed with cash. All other proceeds related to account wagering are to be disbursed in accord with N.J.A.C. 13:74-7.14.

N.J.A.C. 13:74-7.13 provides that the account wagering licensee may charge an administrative or access fee in connection with account wagers where placed by telephone through a live operator, but the type and amount of any such fee must be approved by the Commission. N.J.A.C. 13:74-7.15 provides standards for the closing of a dormant wagering account by the account wagering licensee, and for the disbursement of wagering account funds, upon and subject to notice to the account holder where a wagering account remains inactive for a continuous 24-month period. N.J.A.C. 13:74-7.16 sets forth a retention schedule for the account wagering licensee's maintenance and reporting of account wagering information, and sets forth a requirement that the account wagering licensee establish a dispute resolution procedure as part of its internal control procedures. This section further requires that an account holder who disputes any wagering or wagering related transaction has the right to review the appropriate record of his or her wagering transaction required to be maintained by the account wagering licensee. It also provides that the decision of the account wagering licensee as to any such dispute constitutes a final decision and shall not be the subject of any appeal to the Commission.

Subchapter 7, through N.J.A.C. 13:74-7.17, also provides a mechanism for account holders to file written or electronic complaints with the Commission. N.J.A.C. 13:74-7.18 precludes persons under suspension or otherwise not in good standing with the Commission from establishing or maintaining a wagering account.

Subchapter 8 sets forth certain requirements concerning the conduct of both of-track wagering and account wagering. N.J.A.C. 13:74-8.1 requires that the off-track and account wagering licensee each utilize a Commission licensed hub facility as defined in N.J.A.C. 13:74-1.1 and that, unless otherwise approved by the Commission, each use the same hub facility. This subchapter also sets forth the conditions for receipt of races from in-State and out-of-State races, which races may be offered for pari-mutuel wagering by each licensee. N.J.A.C. 13:74-8.6 provides that, with the prior approval of the Racing Commission and the concurrence of an out-of-State sending track or host track, an off-track wagering licensee or the account wagering licensee may form an interstate common pool with receiving tracks or entities in states other than the state in which the sending track is located. N.J.A.C. 13:74-8.4 and 8.5 provide for the commingling of wagers with in-State and out-of-State sending tracks and host tracks. N.J.A.C. 13:74-8.7 requires that agreements between an off-track wagering licensee and a sending track, or between the account wagering licensee and a host track upon which wagers are to be taken, be in writing.

Subchapter 9 concerns minimum standards for the in-State hub facility, which facility is required to submit, maintain and keep current written internal control procedures as defined in N.J.A.C. 13:74-1.1 and 9.2. A requirement is also imposed upon the hub facility requiring that equipment and software be subject to a testing procedure before implementation in connection with off-track wagering or the account wagering system. It is further required by N.J.A.C. 13:74-9.1 that a Supervisor of Mutuels, a Racing Commission employee whose compensation is to be reimbursed to the Commission by the operator of the hub facility, be assigned to a Commission approved hub facility at all times when off-track wagering or account wagering is being conducted. However, where certain conditions consistent with integrity of operations are present and subject to the approval of the Commission, an existing in-State hub facility with an existing Supervisor of Mutuels may be utilized by the account wagering licensee and off-track wagering licensee.

N.J.A.C. 13:74-9.6 sets forth procedures to be followed in the event of an inability to transmit pari-mutuel information. N.J.A.C. 13:74-9.5 provides that overpays resulting from a totalisator error shall be borne by the vendor operator of the totalisator equipment causing the error, and N.J.A.C. 13:74-9.4 permits an operator of the totalisator which is required due to a malfunction of the totalisator to purchase "lost" tickets, to credit any losing tickets it is required to purchase to the extent of any winning tickets similarly purchased. Any "profit" from the tickets "lost" in the totalisator is to be paid to the Racing Commission and distributed as outstanding parimutuel ticket monies as set forth in the Act.

Subchapter 10 sets forth certain cost assessment formulas. N.J.A.C. 13:74-10.1, as required by the Act, sets forth a formula for racing costs as defined in N.J.A.C. 13:74-1.1. N.J.A.C. 13:74-10.2, as also required by the Act, sets forth a formula to annually assess permit holders an aggregate $200,000 beginning in 2003 for costs related to prevention, education and treatment programs for the benefit of compulsive gambling. This subchapter also prohibits Racing Commission employees and appointees from providing any services to the account wagering licensee or off-track wagering licensee where those services are outside the scope of his or her duties on behalf of the Commission.

Racing costs are defined in N.J.A.C. 13:74-1.1 as the prospective and actual costs for all licensing, investigation, operation, regulation, supervision and enforcement activities and functions performed by the Commission. N.J.A.C. 13:74-10.1, as required by the Act, sets forth a formula to allocate these costs. As required by the Act, subsection (a) to this rule provides for the State Treasurer to certify racing costs annually. Subsection (b) to this rule, as provided in the Act, states that the Commission is to be reimbursed for racing costs from license fees, certain breakage monies and certain outstanding ticket monies. Subsection (c) to this rule, where these funds are not sufficient to reimburse the Commission for racing costs, as required by the Act sets forth a formula to assess the permit holders and successors in interest for the balance. Paragraphs (c) 1 through 5 set forth the specific allocation formula. Subsection (d) to this rule concerns the procedure for invoicing for racing costs, and for the payment of racing costs following the issuance of a payment invoice by the Commission.

The formula set forth in N.J.A.C. 13:74-10.2, concerning costs to benefit compulsive gambling, provides that beginning July 3, 2003, the Commission, by written invoice and on an annual basis, shall assess each permit holder on an equal basis the sum of $200,000 in the aggregate. Each permit holder will be required to make payment of its proportionate share within 15 days of the issuance of the invoice, which funds are to be deposited in the General Treasury no later than August 1 of the same year. These funds are to be appropriated by the Legislature to the Department of Health and Senior Services (DHSS), for use by that DHSS within the same fiscal year when collected. The funds are required to be used by the DHSS for prevention, education and treatment programs for compulsive gambling consistent with the Act.

Subchapter 11 concerns the ability of the Commission to access and maintain a presence at off-track wagering facilities and premises where account wagering is directly or indirectly conducted. N.J.A.C. 13:74-11.1 provides that the Commission and its representatives shall have unrestricted access to such facilities. N.J.A.C. 13:74-11.2 requires that the off-track wagering licensee provide the Commission, in furtherance of its regulatory responsibilities, with two designated parking spaces at each off-track wagering facility. A similar requirement is imposed upon the account wagering licensee as to the phone bank facility or facilities. A requirement is also imposed enabling the Commission in its discretion to require that the off-track wagering licensee, in furtherance of the Commission's exercise of its regulatory duties, provide the Commission with reasonable office space at no more than four off-track wagering facilities within geographic regions selected by the Commission. A similar requirement, to provide reasonable office space to the Commission at each phone bank facility that may be established, is imposed upon the account wagering licensee.

As the Commission has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The implementation of off-track wagering and account wagering is expected to increase the number of persons who choose to participate in legalized horse race wagering in New Jersey. Off-track wagering and account wagering is also likely to result in a net increase in the amount of wagering on horse racing in this State. It would be highly speculative to attempt to estimate the degree to which any of these increases may occur, particularly since the number of individuals who elect to establish a wagering account is unknown. The number of off-track wagering facilities to be applied for and established is also unknown, although a maximum of 15 such facilities is authorized by the Act. In any event, any resulting social impact is due to the Legislative decision to authorize the described activities and not the promulgation of these rules.

Regardless of the amount of increase in horse race wagering in this State, certain of the funds related to such wagering will accrue to the benefit of horse breeding and development in New Jersey. Additionally, certain of the funds related to such wagering will accrue to the benefit of backstretch benevolence, a program administered by the Commission which benefits backstretch workers at permitted racetracks and other facilities under the Commission's jurisdiction. Additionally, the Act provides that certain of the funds related to off-track and account wagering are to be devoted to live race purses and programs designed to aid the New Jersey horsemen. Thus, to the extent the implementation of these rules generates moneys for such purposes, there will be a beneficial social impact.

It is anticipated that the implementation of these rules will promote the economic future of the horse racing industry in this State and, consequently, the ancillary or service industries that support horse racing. The implementation of off-track wagering and account wagering should foster the potential for increased commerce, employment and recreational opportunities in this State. It should also preserve the State's open spaces as, through the Act's allocation of certain of the funds derived through such wagering to live purses and breeding and development, the devotion of land for horse breeding and training is encouraged.

As with any expansion of legalized gambling, a potential does exist for negative social implications. The Act, through its requirement that the Commission regulate off-track wagering and account wagering, seeks to limit the potential for such implications. It also requires that the permit holders or successors in interest provide funding to be used by the New Jersey Department of Health and Senior Services for prevention, education and treatment programs for compulsive gamblers. The Commission believes that these requirements of the Act will reduce the potential for such negative social implications.

Economic Impact

For the reasons noted above, it is impossible to estimate the economic impact of these proposed new rules. However, assuming that account wagering and off-track wagering is implemented, several economic consequences should result.

The Authority and the parties to the participation agreement may chose to convert existing premises into off-track wagering facilities, or to build new facilities. In any event, such endeavors will involve substantial costs both in construction and the purchase of new equipment, thereby benefiting the affected construction companies and equipment suppliers. In view of the requirement that a phone bank facility be utilized in connection with account wagering, the Authority and the parties to the participation agreement will incur costs in terms of the construction of such a facility. Additionally, substantial costs will likely be incurred in connection with establishing the various infrastructures necessary to the implementation of account wagering. These expenditures will also benefit the affected construction companies and equipment suppliers. Additionally, once off-track wagering and account wagering is established, an economic benefit should arise to suppliers and vendors of the related facilities.

The implementation of off-track wagering and account wagering should have a positive economic impact on the local municipalities where off-track wagering facilities and account wagering facilities, such as the phone bank, are to be situated. This is because the presence of such facilities should result in additional employment opportunities and tax revenues.

The rules should also benefit permit holders or successors in interest, as well as horsemen's groups. These entities will directly share in revenue from off-track wagering and account wagering, and indirectly from increased purses that should result at New Jersey live race meetings. Additionally, as noted above, the rules can be expected to generate additional funds for backstretch benevolence programs, as well as programs designed to assist compulsive gambling.

An economic impact will result to the account wagering licensee and off-track wagering licensee as a result of the implementation of these rules. In order to establish an account wagering system and off-track wagering facilities, non-refundable filing fees must be submitted with each application for an initial or renewed license. Additionally, the costs associated with the hearings to be held following the submission of such applications is to be borne by the respective applicant. Further, each licensee is required to establish and maintain internal control procedures, and to maintain various records as defined in the rules related to their respective operations, which will require appropriate staffing and administrative costs.

The permit holders and successors in interests will also incur costs due to implementation of these rules, including the requirement that they pay racing costs. While the Commission is reimbursed by the industry for certain costs associated with its regulation of racing under existing law, not all such costs are presently assessed to the industry. Additionally, the implementation of off-track wagering and account wagering will result in an increase in regulatory costs to the Commission, which are dependent on the scope of industry initiatives. The Racing Commission estimates, however, based upon present circumstances, that approximately $550,000 to $700,000 in existing regulatory costs will annually be allocated to the industry as result of the implementation of these rules, and an additional $1,117,000 in regulatory costs directly related to the regulation of off-track wagering and account wagering will arise. However, these projected costs will be reduced consistent with the Act as a result of the revenues to be devoted to racing costs pursuant to N.J.A.C. 13:74-10.1(b). It is the remaining balance that will be allocated to the permit holders and successors in interest consistent with subsection (c) to that rule.

The account wagering licensee and off-track wagering licensee should also incur costs related to the requirement of N.J.A.C. 13:74-11.2, which requires that limited parking and permanent office space in the Commission's discretion be provided to the Commission at locations designated within the rule. Additionally, certain individuals and vendors who desire to work at an off-track wagering facility or in connection with the account wagering system will be required to take out a Commission issued license, which dependant upon the class of license range in annual cost from $10.00 to $50.00.

The rules require that the off-track wagering licensee and account wagering licensee utilize an in-State hub facility, which will result in costs to each. Although this requirement will benefit the operator of the hub, the rules impose certain costs upon the hub operator. The hub facility or facilities would be responsible for paying the compensation of the Racing Commission supervisors of mutuels. The operator of the hub facility would also be required to establish and maintain internal control procedures, as well as other records related to off-track wagering and account wagering, which will require appropriate staffing and administrative costs.

Federal Standards Statement

A Federal standards analysis is not required because the proposed new rules are authorized by the provisions of the Off-Track and Account Wagering Act, P.L. 2001, c. 199, and are not subject to any Federal requirements or standards.

Jobs Impact

As noted above, the implementation of these rules will result in the generation of jobs in the State. The opening of off-track wagering facilities, and the introduction of account wagering in the State, will create employment opportunities. The location of those employment opportunities is dependent upon the locations of the off-track wagering facilities, and the phone bank and other facilities that relate to the account wagering system infrastructure. In addition to the employment requirements at such facilities, job opportunities will also arise in terms of the construction of such facilities, and as concerns ancillary industries which will be needed to supply such facilities with goods and services.

Agriculture Industry Impact

The adoption of these rules, and the implementation of off-track wagering and account wagering in this State, should have a positive impact on agriculture. Since horse racing involves the participation of animals, which require farmland for breeding, development and training, the requirement of the Act that a portion of the funds derived from off-track and account wagering be devoted to purses for live racing in this State may indirectly result in an incentive to expand the devotion of land for such purposes. Additionally, as noted above, certain of the revenues resulting from such wagering is to be devoted to horse breeding and development in this State, which will have a direct beneficial impact.

Regulatory Flexibility Analysis

With respect to the permit holders, none of which qualifies as a small business under the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq., as each has over 100 full-time employees, no regulatory flexibility analysis is required. In any event, any impact on small businesses, which may result from these rules, is due to the Legislature's decision to authorize these activities, and not the promulgation of these rules.

The rules set forth licensing requirements as concern vendors, who may operate as small businesses, who furnish goods and services to an off-track wagering facility or to the account wagering licensee. Unless an exemption is applied for and granted, vendors are required to be licensed where they maintain a presence at the premises of an off-track wagering facility or at the premises of the account wagering licensee, or where they supply racing related or pari-mutuel related equipment, supplies, information or data to the off-track wagering licensee or in connection with the account wagering system. These vendors would be required to file a petition with a Commission seeking an exemption on the basis that licensure is unnecessary, or submit a license application to secure a license. Additionally, in a significantly lesser number, other vendors who transact more than $10,000 annually with the off-track wagering licensee or account wagering licensee might be required by the Commission to file an application for a vendor's license. However, where any vendor is already licensed by the Commission and it is determined that the vendors responsibilities to an existing Commission licensee are substantially similar to those to be performed in connection with off-track or account wagering, an endorsement to the existing license at no cost would be the only requirement. These requirements are consistent with the policies of the Act and, in addition to being amply warranted, are necessary to the integrity of off-track and account wagering. Costs to vendors are discussed in the Economic Impact above.

The rules would require a hub facility, or hub facilities if more than one is authorized by the Commission, to be licensed as a vendor. Additionally, all employees of the hub operator and those with oversight responsibilities as to the hub facility would be required to apply for and receive a Commission issued license. The hub facility would be required to establish and maintain internal control procedures, as well as records related to off-track and account wagering. The hub facility would also be required to test equipment or software before implementation, and submit the results of such testing to the Commission in writing. It would also be responsible for paying the compensation of supervisors of mutuels. The rules require that a hub facility be located in New Jersey, and it is likely that it would be a small business. Costs to hub facilities are discussed in the Economic Impact above.

A hub facility will house the totalisator and generate the reports that are to be utilized to reconcile simulcast wagers with sending or host tracks and calculate payments due to the Commission. It will also form integral functions, as overseeing the operations of the totalisator and conducting manual merges of pari-mutuel pool information in the event of a transmission failure. For these reasons, the licensing requirements and other controls imposed upon a hub facility are essential to maintaining the integrity of off-track and account wagering. It is equally important to insuring the fiscal soundness and technical reliability of off-track wagering and the account wagering system.

It is not anticipated that small businesses will have to employ professional services in order to comply with these rules.

Full text of the proposed new rule follows:

CHAPTER 74

OFF-TRACK WAGERING AND ACCOUNT WAGERING

SUBCHAPTER 1. GENERAL PROVISIONS

13:74-1.1 Definitions

The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise.

"Account holder" means a resident of this State, 18 years of age or older, who establishes an account through which account wagers are placed.

"Account wagering" means a form of pari-mutuel wagering in which an account holder may deposit money in an account with the account wagering licensee and then use the account balance to pay for pari-mutuel wagers by the account holder.

"Account wagering licensee" means the New Jersey Sports and Exposition Authority, provided that the Commission has granted its approval for the Authority to establish an account wagering system.

"Account wagering system" means the system through which account wagers are processed by the account wagering licensee.

"Act" means the Off-Track and Account Wagering Act, P.L. 2001, c. 199.

"Authority" means the New Jersey Sports and Exposition Authority created by section 4 of P.L. 1971, c. 137 (N.J.S.A. 5:10-4).

"Closed-loop system" means a system of telephone, computer or other electronic based wagering as approved by the Commission, whose key elements shall be located in this State. The key elements shall include, but not be limited to, the hub facility, permanent information databases, banking databases, system monitoring equipment and account information representatives including those situated at the phone bank. The non-key elements of such system, as determined by the Commission upon application to and approval by it, may be located outside this State.

"Commission" means the New Jersey Racing Commission created by section 1 of P.L. 1940 c. 17 (N.J.S.A. 5: 5-22).

"Delay period" means the time difference between off-time and the start of a simulcast horse race.

"Dormant account" means a wagering account, established pursuant to the Act and this chapter, which has remained inactive for a continuous period of 24 months in that, during such 24 month continuous period, no valid pari-mutuel wagers were made utilizing funds in that account, no valid deposits or credits were made to the wagering account, and no valid debits or withdrawals were made to the wagering account.

"Executive Director" means the Executive Director of the Commission.

"Hub facility" means: a facility located in this State which acts as an intermediary between each off-track wagering facility and an in-state sending track or out-of-state sending track; and which acts as an intermediary between the account wagering licensee and an in-State host track or out-of-State host track, with respect to the transmission of pari-mutuel wagering data. The hub facility shall be responsible for generating all reports necessary for the reconciliation of payments between the off-track wagering licensee or off-track wagering facilities, the account wagering licensee, sending tracks and the Commission. The hub facility may also, but is not required to, perform other functions, including the transmission of pictures of simulcast horse races to off-track wagering facilities and pari-mutuel non-wagering data.

"In-State host track" means a racetrack within this State that is operated by a permit holder which conducts a horse race upon which account wagers are placed.

"In-State sending track" means a racetrack within this State that is operated by a permit holder and is equipped to conduct off-track simulcasting.

"In-State track" means an in-State host track or an in-State sending track.

"Internal control procedures" means the written procedures required to be maintained and updated as necessary, for Commission approval, by:

1. The off-track wagering licensee, which sets forth the operational procedures to effectively operate the racing and pari-mutuel wagering aspects of each off-track wagering facility and to protect the fiscal soundness, technical reliability and integrity of wagering;

2. The account wagering licensee, which sets forth the operational procedures to effectively operate the racing and pari-mutuel wagering aspects of the account wagering system and to protect the fiscal soundness, technical reliability and integrity of wagering; and

3. The hub facility, which sets forth the operational procedures to effectively operate the hub facility in connection with off-track wagering, account wagering, any other racing related functions performed by the hub facility, and to protect the fiscal soundness, technical reliability and integrity of wagering.

"Interstate common pool" means a pari-mutuel pool established in this State, in another state or in another country, within which is combined the pari-mutuel pools of one or more receiving tracks located in one or more states or countries, upon a race at an out-of-state sending track or out-of-state host track for purposes of establishing payoff prices to winning pari-mutuel ticket holders in various jurisdictions participating in the interstate common pool.

"Manual merge" means the process used in the event of a systems or communications failure by which the off-track wagering licensee, the account wagering licensee and hub facility transmits to an in-State track or out-of-State track through telephone, facsimile machine, cellular telephone or other means of communication, the off-track wagering licensees or account wagering licensees pari-mutuel information and the process by which the in-State track or out-of-State track includes such pari-mutuel wagers in the common pari-mutuel pool in such event.

"Minus pari-mutuel pool" means a pari-mutuel pool in which insufficient monies have been wagered to permit the minimum payoffs of winnings required by the rules of pari-mutuel wagering governing the race.

"New Jersey Racing Industry Special Fund" means the fund established pursuant to section 27 of the Act, N.J.S.A. 5:5-153.

"Off-time" means when wagering is ceased prior to the start of a horse race by a signal transmitted from an in-State track or out-of-State track to the totalisator, through which the account wagering system or an off-track wagering facility is conducting wagering, or in the event that the transmission of data has been interrupted, by the totalisator in accordance with the internal controls of the hub facility.

"Off-track simulcasting" means the simultaneous video transmission which may include a simultaneous audio transmission, of horse races conducted live at in-State or out-of-State racetracks to off-track wagering facilities and pari-mutuel wagering at those off-track wagering facilities on the results of those races.

"Off-track wagering" means pari-mutuel wagering at an off-track wagering facility within this State.

"Off-track wagering facility" means a licensed facility within this State, other than a racetrack or casino simulcast facility operated within the premises of an Atlantic City casino, where no live racing is conducted.

"Off-track wagering licensee" means the Authority, provided that the Commission has granted its approval for the authority to conduct an off-track wagering facility.

"Out-of-State host track" means a racetrack in a jurisdiction other than this State, the operator of which is lawfully permitted to conduct a horse race meeting and which conducts horse races upon which account wagers may be placed.

"Out-of-State sending track" means a racetrack in a jurisdiction other than this State, which is equipped to conduct off-track simulcasting and the operator of which is lawfully permitted to conduct a horse race meeting and to provide simulcast horse races to off-track wagering facilities within this State.

"Out-of-State track" means an out-of-State host track or an out-of-State sending track.

"Outstanding pari-mutuel ticket" means a winning or refundable pari-mutuel ticket that is not claimed within six months of sale, which six month period is to be calculated as set forth in this chapter.

"Pari-mutuel" means any system whereby wagers with respect to the outcome of a horse race are placed with or in a wagering pool conducted by an authorized person, and in which the participants are wagering with each other and not against the person conducting the wagering pool.

"Participation agreement" means the written contract that provides for the establishment or implementation of either an off-track wagering facility or facilities or an account wagering system. Each such contract shall set forth the manner in which the off-track wagering facility or facilities or the account wagering system shall be managed, operated and capitalized, as well as how expenses and revenues shall be allocated and distributed by and among the Authority and the other eligible participants.

"Permit holder" means the holder of an annual permit issued by the Commission to conduct a horse race meeting within this State.

"Phone bank" means a facility located within this State operated by the account wagering licensee or an assignee or assignees, as approved by the Commission, the functions of which facility shall include the processing of all account wagers placed by telephone and, unless otherwise approved by the Commission, such other functions related to account wagering and the administration thereof as set forth in this chapter.

"Racetrack" means the facility within this State where a permit holder conducts a live horse race meeting or meetings with pari-mutuel wagering.

"Racing costs" means the prospective and actual costs for all licensing, investigation, operation, regulation, supervision and enforcement activities and functions performed by the Commission.

"Scratch" means the withdrawal of an entered horse from a race after the closing of overnight entries.

"Self-service pari-mutuel machine" means a mechanical, electrical or other device connected to a totalisator which: upon the insertion of a credit voucher, coupon or currency, or any combination thereof, and the selection of a permissible wager, automatically issues a pari-mutuel ticket together with a credit voucher for any balance which may be due; and which, upon the insertion of a winning or refunded pari-mutuel ticket, reads the ticket and automatically issues a credit voucher in the amount of the correct payout; and which, upon the entry of an account wagering account number and correct personal identification number by a patron, allows the patron to access his or her wagering account for the purposes of placing wagers by selecting a permissible simulcast wager in an amount not to exceed the balance of the patron's account.

"Simulcast horse races" means horse races conducted at an in-State sending track or an out-of-State sending track, as the case may be, and transmitted simultaneously by picture to a receiving track or an off-track wagering facility.

"Successor in interest" means:

1. The party to whom, with the prior approval of the Commission, the annual permit to conduct a horse race meeting issued by the Commission has been transferred; or

2. The party to whom, with the prior approval of the Commission and Attorney General, an initial off-track wagering license, renewed off-track wagering license, initial account wagering license, or renewed account wagering license has been transferred or assigned.

"Takeout" means that portion of a wager that is deducted from or not included in the pari-mutuel pool, and which is distributed other than to persons placing wagers.

"Totalisator" means a computer situated within the hub facility which, among other things, directly or indirectly through one or more other totalisators receives pari-mutuel wagering information, calculates payoffs for winning pari-mutuel tickets, generates reports with respect to such information, and in the event that the transmission of data from a sending or host track has been interrupted, automatically ceases wagering in accordance with the internal control procedures of the hub facility.

"Wagering account" means an account through which an account holder may place account wagers through the account wagering system.

13:74-1.2 Rules of the Racing Commission

Except as otherwise provided in the Act or this chapter, the rules of racing and the conduct of pari-mutuel wagering in off-track wagering facilities, or in connection with account wagering, shall be subject to the rules of the Racing Commission. These rules shall be applicable to all persons licensed by the Commission and every patron of an off-track wagering facility or of the account wagering system.

SUBCHAPTER 2. APPLICATION FOR INITIAL OFF-TRACK WAGERING LICENSE; APPLICATION FOR RENEWAL OF OFF-TRACK WAGERING LICENSE

13:74-2.1 Prerequisites to and procedures for grant of initial off-track wagering license

(a) The Authority shall make an application for an initial off-track wagering license on a form prescribed by the Commission, accompanied by a non-refundable filing fee of $2,500. An initial application, accompanied by the non-refundable filing fee, shall be filed for each off-track wagering facility proposed by the Authority.

(b) An application for an initial off-track wagering license shall not be considered complete unless:

1) The Authority is in compliance with the minimum live race date requirements of the Act;

2) The Authority includes within the application a copy of a fully executed participation agreement, the terms of which encompass the license period, which it has entered into with all parties or successors in interest that held a valid race permit in 2000 (who are each in compliance with said permit, who are each in compliance with any minimum live race dates requirements of the Act, and who each are in good standing with the Racing Commission and State);

3) That all parties to the participation agreement are licensed by the Commission, or otherwise qualified to participate in off-track wagering;

4) The Authority demonstrates through the application that the requirements of the Act have been satisfied, including a statement evidencing that the governing body of the local municipality within which the proposed off-track wagering facility is to be sited has not issued a resolution disapproving the proposed off-track wagering facility; and

5) The Authority has completely answered each question within the application and complied with the requirements of this section.

(c) The initial application form, as prescribed by the Commission, shall include disclosure requirements concerning, but not limited to, the physical plan and location of the proposed off-track wagering facility subject of the specific application including the space relationship between wagering and non-wagering related amenities, the number of jobs expected to be created at the proposed facility, the gross revenues expected to be generated by the facility, the fire evacuation plan for the proposed facility, the type of food and beverages to be available and, if alcoholic beverages are to be offered at the proposed facility, whether the requirements of the Act have been satisfied, and the proposed hours of operation of the off-track wagering facility.

(d) The initial application form shall have attached a written internal controls procedure which shall set forth the procedures to be implemented to effectively operate and manage the proposed off-track wagering facility, and the procedures to be implemented to effectively maintain the integrity of wagering and the proceeds from wagering within the proposed off-track wagering facility. The internal control procedures shall include a procedure to foster and insure that the off-track wagering licensee complies with the requirement of the Act, which creates a right of first refusal as to certain individuals for certain employment opportunities within off-track wagering facilities.

(e) The initial application form shall be accompanied by a certification, signed and dated by a high managerial agent of the Authority, attesting that the disclosures within the application and within its attachments are true, accurate and complete.

(f) The initial application for an off-track wagering facility may be filed with the Commission at any time following the effective date of the Act, and any initial license granted pursuant to such application shall be for a period of one year.

(g) Following a determination that the application for an initial off-track wagering license is complete, the Executive Director shall within 14 days review the application in accordance with the Act to insure that the application is in due form and meets the requirements of law in all respects. Upon the Executive Director being satisfied that these requirements are met, and consistent with the public notice requirements of the Act, the Commission within 45 days of the receipt of the completed application, certification and non-refundable $2,500 filing fee shall at the cost of the Authority hold a public hearing in the municipality in which the proposed off-track facility is to be located.

(h) Between 30 days and 60 days following closing of the record on the public hearing described in (g) above, the Commission shall make a final determination on the application. The Commission shall approve the application if it determines that the Authority by clear and convincing evidence has demonstrated, through its application and internal control procedures, that:

1) The plan for the proposed facility, including its size, seating capacity, parking and services to be provided, reflects appropriate standards of quality;

2) The grant of a license to establish the proposed off-track wagering facility will not be inimical to the interests of the public and the horse racing industry in this State;

3) The participation agreement meets the requirements of the Act to the satisfaction of the Commission and Attorney General;

4) The proposed off-track wagering facility site is not in an area zoned residential;

5) The Authority has submitted its plans to the municipal planning board, and complied with the provisions of section 22 of P.L. 1975, c.291 (N.J.S.A. 40:55D-31); and

6) The Authority has made reasonable efforts to address the reasonable concerns, if any, as expressed by the appropriate municipal planning board.

(i) The Commission's determination on the application shall be submitted to the Attorney General, for review and approval, within three business days following the Commission's determination. The determination of the Commission shall be deemed approved by the Attorney General if not affirmatively approved or disapproved by the Attorney General within 14 days of the date of submission. The decision of the Attorney General shall be deemed a final decision. The Commission shall issue the license upon approval of the Attorney General.

(j) Any off-track wagering license issued to the Authority shall specify the effective dates of the license, the location of the off-track wagering facility subject of the license, the periods of time during the calendar year and the maximum hours of operation during which off-track wagering is permitted at the facility, and prescribe any other conditions or terms the Commission deems appropriate, including, but not limited to, the requiring of an annual audit of the off-track wagering licensee's books and records pertaining to off-track wagering, as well as the imposition of a condition consistent with N.J.A.C. 13:74-11.2.

(k) The Commission shall issue no more than 15 off-track wagering facility licenses, and no more than eight such licenses may be granted in the two year period commencing on the effective date of the Act.

13:74-2.2 Prerequisites to and procedures for grant of renewal of an off-track wagering license

(a) These procedures shall apply where the Authority has been granted an initial license for an off-track wagering facility within a particular municipality, which initial license has not lapsed, where the grant of that initial license occurred pursuant to the provisions of the Act and N.J.A.C. 13:74-2.1, and where the Authority or its successor in interest makes proper application for the renewal of an initial or previously renewed license for an off-track wagering facility itself subject of an initial license grant.

(b) A renewal license for an off-track wagering facility, as issued by the Commission, shall run for a one year period commencing January 1 and ending on December 31 of the same year. Where, however, an initial one year off-track wagering license granted pursuant to the procedure set forth in N.J.A.C. 13:74-2.1 shall by operation of the calendar expire on a date which would result in a lapse of such license if these dates were to be complied with, the Commission on a one-time basis and at no additional cost to the off-track wagering licensee may renew the initial license period to the last day of December of the year in question.

(c) A renewal application for an existing off-track wagering facility license shall be made by the off-track wagering licensee on a form prescribed by the Commission, accompanied by a non-refundable filing fee of $1,250, and shall be filed no later than October 15 of the year prior to that for which the license renewal is sought.

(d) A renewal application shall not be considered complete unless:

1) The Authority is in compliance with the minimum live race date requirements of the Act;

2) The off-track wagering licensee includes with the application a copy of a fully executed participation agreement which the off-track wagering licensee has entered into with all parties or successors in interest that held a valid race permit in 2000 (who are each in compliance with the permit, who each are in compliance with any minimum live race dates of the Act, and who each are in good standing with the Commission and State);

3) All parties to the participation agreement are licensed by the Commission, or otherwise qualified to participate in off-track wagering; and

4) The off-track wagering licensee has completely answered each question within the renewal application and complied with the requirements of this section.

(e) The renewal application shall include as attachments a written internal controls procedure as required by N.J.A.C. 13:74-2.1(d).

(f) The renewal application shall be accompanied by a certification, signed and dated by a high managerial agent of the off-track wagering licensee, attesting that the disclosures within the application and its attachments are true, accurate and complete.

(g) Following the Executive Director's determination that the renewal application is complete, the Executive Director shall at the cost of the off-track wagering licensee cause a hearing to be held before the Commission. Any such hearing may be held at a properly and regularly convened public meeting of the Commission, and at a location in this State at the Commission's discretion.

(h) Following the Commission's consideration of the renewal application, and prior to the expiration date of the initial license or previously renewed license under which the off-track wagering facility is then operating, the Commission subject to the review and approval of the Attorney General shall issue to the off-track wagering licensee an off-track renewal license if appropriate. An off-track renewal license shall be issued to the off-track wagering licensee where it demonstrates by clear and convincing evidence that:

1) The plan for the continued operation of the facility, including its size, seating capacity, parking and services to be provided, reflects appropriate standards of quality;

2) The grant of an off-track wagering license renewal to continue the operations of the off-track wagering facility will not be inimical to the interests of the public and the horse racing industry in this State;

3) The participation agreement meets the requirements of the Act to the satisfaction of the Commission and Attorney General; and

4) The off-track wagering licensee is in compliance with the Act, this chapter and any conditions imposed upon it by the Commission.

(i) A renewed off-track wagering license issued to the off-track wagering licensee shall specify the effective dates of the renewal license, the location of the off-track wagering facility subject of the license renewal, the periods of time during the calendar year and the hours of operation during which off-track wagering is permitted at the facility, and prescribe any other conditions or terms the Commission deems appropriate, including, but not limited to, the requiring of an annual audit of the off-track wagering licensee's books and records pertaining to the off-track wagering, as well as the imposition of any condition consistent with N.J.A.C. 13:74-11.2.

SUBCHAPTER 3. APPLICATION FOR INITIAL ACCOUNT WAGERING LICENSE; APPLICATION FOR RENEWAL OF ACCOUNT WAGERING LICENSE

13:74-3.1 Prerequisites to and procedures for grant of initial account wagering license

(a) An application for an initial account wagering license shall be made by the Authority on a form prescribed by the Commission, accompanied by a non-refundable filing fee of $7,500.

(b) An initial application for an account wagering license shall not be considered complete unless:

1) The Authority is in compliance with the minimum live race date requirements of the Act;

2) The Authority includes with the application a copy of a fully executed participation agreement which the Authority has entered into with all parties or successors in interest that held a valid race permit in 2000 consisting of an aggregate 40 live dates (who are each in compliance with said permit, who each are in compliance with any minimum live race date requirements of the Act, and who are each in good standing with the Commission and State); and

3) The Authority has completely answered each question within the application and complied with this section.

(c) The initial application form, as prescribed by the Commission, shall include disclosure requirements concerning, but not limited to:

1) The Authority's participation in the proposed account wagering system;

2) The participation of persons other than the Authority in the account wagering system

3) The physical plan, location of and particular functions of the phone bank facility to be utilized in connection with the account wagering system;

4) A detailed description of the intended account wagering operating system, including the methods by which account wagers are proposed to be taken; and

5) The proposed maximum hours of operation during which wagers are to be taken as to each method.

(d) The initial application form shall have attached a written internal controls procedure which shall set forth the procedures to be implemented to effectively operate and manage the racing and pari-mutuel aspects of the account wagering system, and the procedures to be implemented to effectively maintain the integrity of wagering and the proceeds from wagering associated with the account wagering system. The internal control procedures shall include a procedure to foster and insure that the account wagering licensee complies with the requirement of the Act creating a right of first refusal as to certain individuals for certain employment opportunities associated with the account wagering system.

(e) The completed initial application shall be accompanied by a certification, signed and dated by a high managerial agent of the Authority, attesting that the disclosures within the application and its attachments are true, accurate and complete. Any initial license granted pursuant to such application shall be for a one year period.

(f) The Commission in its discretion may accept an initial application for an account wagering license prior to the effective date of the Act, but it may not conduct a hearing on the application or render a decision on the application until after the effective date of the Act. If the Commission accepts such an application, the date of receipt for purposes of the time restrictions within this section shall be deemed to be the effective date of the Act.

(g) Following a determination that the application for an initial account wagering license is complete, the Executive Director shall within 14 days review the application in accordance with the Act to insure that the application is in due form and meets the requirements of law in all respects. Upon the Executive Director being satisfied that these requirements are met, the Executive Director shall at the cost of the Authority cause a hearing to be held before the Commission within 45 days of the receipt of the completed application, certification and non-refundable fee. Any such hearing may be held at a properly and regularly convened public meeting of the Commission, and at a location at the Commission's discretion.

(h) Between 30 days and 60 days following the closing of record on the public hearing described in (g) above, the Commission shall make a final determination on the application. The Commission shall approve the application if it determines that the Authority by clear and convincing evidence has demonstrated, through its application and internal control procedures, that:

1) Wagers placed through the proposed account wagering system will be accurately processed, with sufficient safeguards to maintain the integrity of the horse racing industry in this State;

2) That the grant of a license to establish the proposed account wagering licensee will not be inimical to the interests of the public and the horse racing industry in this State;

3) The participation agreement meets the requirements of the Act to the satisfaction of the Commission and Attorney General; and

4) All parties to the participation agreement are licensed by the Commission, or otherwise qualified to participate in account wagering.

(i) The Commission's determination on the application shall be submitted to the Attorney General, for review and approval, within three business days following the Commission's determination. The determination of the Commission shall be deemed approved by the Attorney General if not affirmatively approved or disapproved by the Attorney General within 14 days of the date of submission. The decision of the Attorney General shall be deemed a final decision. The Commission shall issue the license upon approval of the Attorney General.

(j) An account wagering license issued to the Authority shall specify the effective dates of the license, the methods of account wagering authorized by the license, and other conditions or terms the Commission may deem appropriate, including but not limited to the requiring of an annual audit of the of account wagering licensee's books and records pertaining to account wagering, as well as the imposition of any condition consistent with N.J.A.C. 13:74-11.2.

13:74-3.2 Prerequisites to a grant of renewal of an account wagering license

(a) These procedures shall apply where the account wagering licensee has been granted an initial license for account wagering, which initial license has not lapsed, where the grant of that initial license occurred pursuant to the provisions of the Act and N.J.A.C. 13:74-3.1, and where the account wagering licensee or its successor in interest makes proper application for the renewal of the initial account wagering license or a previously renewed account wagering license itself subject of the initial license grant.

(b) A renewal of an account wagering license, as issued by the Commission, shall run for a one year period commencing January 1 and ending on December 31 of the same year. Where however an initial one year account wagering license granted pursuant to the procedure set forth in N.J.A.C. 13:74.3.1 shall by operation of the calendar expire on a date which would result in a lapse of such license if these dates were to be complied with, the Commission on a one-time basis and at no additional cost to the account wagering licensee may grant a renewal of the initial license period to the last day of December of the year in question.

(c) A renewal license for an existing account wagering license shall be made by the account wagering licensee on a form prescribed by the Commission, accompanied by a non-refundable filing fee of $5,000, and shall be filed in a complete manner no later than October 15 of the year prior to that of which the license renewal is sought.

(d) A renewal application shall not be considered complete unless it complies with the requirements set forth in N.J.A.C. 13:74-3.1(b), (c), (d) and (e).

(e) Following the Executive Director's determination that the renewal application is complete, the Executive Director shall at the cost of the account wagering licensee cause a hearing to be held before the Commission. Any such hearing may be held at a properly convened public meeting of the Commission, and at a location in this State in the Commission's discretion.

(f) Following the Commission's consideration of the renewal application, and prior to the expiration date of the initial or previously renewed license under which the account wagering system is then operating, the Commission subject to the review and approval of the Attorney General shall issue an account wagering renewal license if appropriate. An account wagering renewal license shall be issued to the account wagering licensee where it demonstrates by clear and convincing evidence that:

1) Wagers placed through the account wagering system shall continue to be accurately processed, with sufficient safeguards to maintain the integrity of the horse racing industry in this State;

2) The grant of a renewal license will not be inimical to the interests of the public and the horse racing industry in this State;

3) The participation agreement meets the requirements of the Act to the satisfaction of the Commission and Attorney General; and

4) The account wagering licensee is in compliance with the Act, this chapter and any conditions imposed upon it by the Commission.

(g) An account wagering renewal license shall specify the effective dates of the renewal license, the methods of account wagering authorized by the renewal license, and other conditions or terms the Commission may deem appropriate, including but not limited to the requiring of an annual audit of the account wagering licensee's books and records pertaining to account wagering, as well as the imposition of any condition consistent with N.J.A.C.13:74-11.2.

SUBCHAPTER 4. ASSIGNMENT OR TRANSFER OF: OFF-TRACK WAGERING LICENSE OR ACCOUNT WAGERING LICENSE; OPERATIONAL ASPECTS OF OFF-TRACK WAGERING OR ACCOUNT WAGERING SYSTEM; PERMIT TO CONDUCT A HORSE RACE MEETING

13:74-4.1 Prerequisites to and procedures for transfer or assignment of off-track wagering license or account wagering license

(a) An initial off-track wagering license, renewed off-track wagering license, initial account wagering license, or renewed account wagering license, may not be transferred or assigned to a successor in interest absent compliance with this section, and the prior approval of the Commission and the Attorney General.

(b) Prior to acting upon an application for the transfer of an off-track wagering or account wagering license to a successor in interest, the Commission shall initiate and conduct an investigation into the qualifications of the proposed successor in interest as it determines appropriate, at cost to the proposed successor in interest. The Commission shall not approve such a transfer unless the proposed successor in interest is determined as qualified to hold a license by the Commission to engage in such activities.

(c) The Commission shall not approve a transfer or assignment of an off-track wagering or account wagering license to a successor in interest unless the successor in interest demonstrates by clear and convincing evidence that:

1) It and its employees are qualified in all aspects to hold the appropriate license;

2) The transfer of the off-track wagering license or account wagering license to it as a successor in interest will not be inimical to the best interests of the public and the horse racing industry in this State; and

3) All the requirements of the Act and these rules have been met, including the approval of the Attorney General.

(d) The Commission may prescribe such conditions or terms, as the Commission deems appropriate, in approving a transfer or assignment of an off-track wagering license or account wagering license to a successor in interest.

(e) Unless otherwise approved by the Commission, and in addition to the requirements imposed upon the holder of an off-track wagering licensee or account wagering license by the Act and this chapter, a successor in interest to either such license shall be responsible for any regulatory requirements or conditions imposed upon the prior off-track licensee or account wagering licensee, as the case may be, before the transfer or assignment of the respective license to the successor in interest.

13:74-4.2 Operation of off-track wagering facility, or account wagering system or facility, by person or entity other than the account wagering licensee

(a) With the prior approval of the Commission, the off-track wagering licensee may enter into a written contract or written agreement with a person or entity to conduct or operate an off-track wagering facility for it, or to act as its agent in all off-track wagering matters approved by the Commission, and the account wagering licensee may enter into a written contract or agreement with a person or entity to conduct or operate an account wagering system or facility for it, and to act as its agent in all off-track wagering matters approved by the Commission.

(b) Prior to acting upon an application to approve such a written contract or agreement, the Commission shall initiate and conduct an investigation into the qualifications of the person or entity subject of the application, at cost to such person or entity. The Commission shall not approve any such written contract or written agreement unless the person or entity who is proposed to conduct or operate the off-track wagering facility or account wagering system or facility, as the case may be, is determined qualified to hold a license by the Commission to engage in such activities.

(c) The Commission shall not approve any such contract or written agreement unless the person or entity who is proposed to conduct or operate the off-track wagering facility or account wagering system or facility, as the case may be, demonstrates by clear and convincing evidence that it is qualified to perform the function subject of the written contract or written agreement between it and the off-track wagering licensee or account wagering licensee.

(d) The Commission may prescribe such conditions and terms, as the Commission deems appropriate, in approving any contract or written agreement pursuant to this section.

(e) Unless otherwise approved by the Commission, and in addition to the requirements imposed upon the holder of the off-track wagering license or account wagering licensee by the Act and this chapter as concerns the particular functions to be assumed, a person or entity approved by the Commission to perform or act on behalf of either such licensee shall be responsible for the regulatory requirements and conditions imposed previously upon the off-track wagering licensee or account wagering licensee, as the case may be, as concerns the particular functions assumed by such person or entity.

SUBCHAPTER 5. LICENSING; PENALTIES FOR VIOLATIONS; HEARING PROCESS

13:74-5.1 Persons required to have licenses

(a) The off-track wagering licensee and the account wagering licensee shall be licensed in accordance with the Act, and these rules. Any appeal of a final decision on such a license application or renewal license application shall be to the Superior Court of New Jersey, Appellate Division.

(b) A party to whom an initial off-track wagering license, renewed off-track wagering license, initial account wagering license, or renewed account wagering license is to be transferred or assigned shall be licensed in the same capacity, and at the same license application filing fee cost, as the holder of the license subject of the transfer or assignment, in accordance with N.J.A.C. 13:74-2.2 or 3.2 as appropriate, N.J.A.C. 13:74-4.1, and this section.

(c) A party who is the subject of a written contract or written agreement, pursuant to N.J.A.C. 13:74-4.2, to operate an off-track wagering facility or the account wagering system as an agent of the respective licensee, shall be licensed as an off-track wagering licensee agent or account wagering licensee agent at an annual fee of $50.00, and in accordance with N.J.A.C. 13:74-4.2 and this section.

(d) The hub facility shall be licensed by the Commission as a vendor, and the annual license fee shall be $50.00. All employees of the hub operator, including those with supervisory or oversight responsibilities regardless of location, shall take out an identification license at an annual fee of $10.00.

(e) All individuals employed at an off-track wagering facility, all persons employed in connection with the account wagering system at any premises in this State, and any persons regardless of location who are responsible for the supervision or oversight of any aspect of an off-track wagering facility or any aspect of the account wagering system, shall be required to take out an appropriate license from the Commission. The annual fee for each license shall be as follows:

1) Pari-mutuel employee - $25.00 annually;

2) Identification license - $10.00 annually.

(f) Unless the Commission or Executive Director shall determine the issuance of a license to be unnecessary upon the filing of a petition of a prospective applicant for an exemption from the vendor license requirements of this section, based upon the nature of the service provided and volume of business, the following vendors shall be required to take out a license from the Commission: any vendor who maintains an on-site presence at the premises of an off-track wagering facility, or at the premises of the account wagering licensee in connection with the account wagering system; and any vendor who supplies racing related or pari-mutuel wagering related equipment, supplies, information or data to the off-track wagering licensee or in connection with the account wagering system. The annual fee for such vendor license shall be $50.00.

(g) The Commission shall have the discretion to require, based upon the nature of service provided or volume of business, that any other vendor to an off-track wagering facility or in connection with the account wagering system take out a vendor license for the requisite $50.00 annual fee. The off-track wagering licensee and account wagering licensee, by March 15 of each year, shall file with the Commission a report identifying the name of each non-licensed vendor with whom it did business in an aggregate amount of $10,000 or more for the preceding calendar year, the nature of the vendors business, the principal address and telephone number of the vendor, and whether or not the business relationship is continuing in nature.

(h) An individual or vendor, who is licensed by the Commission pursuant to N.J.A.C. 13:70, 13:71 or 13:72 and who is 18 years of age or older, shall not be required to take out a license pursuant to this chapter where the job responsibilities for which the license was issued by the Commission are substantially similar to those that are to be performed pursuant to this chapter as determined by the Executive Director. However, such a vendor or individual must first have his or her license properly endorsed by the Commission at no charge, and is also subject to all other requirements of this chapter consistent with the license endorsement.

(i) An individual or vendor, who is licensed by the Commission pursuant to this chapter, shall not be required to take out a license pursuant to N.J.A.C. 13:70, 13:71 or 13:72 where the job responsibilities for which the license pursuant to this chapter was issued are substantially similar to those that are to be performed pursuant to N.J.A.C. 13:70, 13:71 or 13:72 as determined by the Executive Director. However, such a vendor or individual must first have his or her license properly endorsed by the Commission at no charge, and is also subject to all other requirements of N.J.A.C. 13:70, 71 or 72 consistent with the license endorsement.

13:74-5.2 Duration of license

All licenses issued pursuant to this chapter shall be effective from January 1 to December 31 of the same year.

13:74-5.3 License fee payment

All license fee costs shall be paid when the license application is filed with the Commission, and shall be non-refundable for any reason including the denial of the license applied for.

13:74-5.4 Collection and dissemination of social security numbers

For the purposes of this chapter, the Commission may request social security numbers to be furnished for use in determining an applicant's eligibility for licensure consistent with the provisions of N.J.A.C. 13:71-7.37.

13:74-5.5 Fingerprint and photograph requirement

All persons licensed by the Commission in connection with off-track wagering and account wagering will be required to be fingerprinted and photographed. The applicant must pay for the cost of fingerprints and for the related criminal history check consistent with the fee structure of the reviewing State and Federal agency.

13:74-5.6 Age requirements

No application for a license will be considered or granted to a person who is not 18 years of age or older.

13:74-5.7 Badges

All Commission licensed personnel who are employed at an off-track wagering facility, or at the premises of the account wagering licensee including the phone bank, shall be required to wear upon their outside apparel in prominent position any identification tag which may be devised by the account wagering licensee or off-track wagering licensee, as approved by the Commission, and to carry on their person and produce to the Commission upon request the authorized badges containing picture identification supplied by the Commission. In the event the account wagering licensee or off-track wagering licensee elect not to devise such an identification tag, all such Commission licensed personnel shall instead be required to wear upon their outside apparel in a prominent position the authorized badges containing picture identification supplied by the Commission. Notwithstanding anything herein to the contrary, the penalty for individuals for failure to comply with this section shall be $15.00 for a first violation; $25.00 for a second violation; $50.00 for a third violation; and a $100.00 fine and seven-day license suspension for each violation thereafter.

13:74-5.8 Refusal to issue or renew license

(a) The burden shall rest on the applicant to show that he or she is qualified in every respect to receive the license applied for. Ability, as well as good character and integrity, must be clearly shown by the applicant in order to receive the license applied for.

(b) The Commission may investigate the applicant or any person named in the application, with respect to such person's background, good character, qualifications, financial responsibility, criminal record, subversive record and other reports concerning such persons, in order to determine whether the applicant is qualified for the license applied for.

(c) The Commission may refuse to issue or renew a license or may suspend a license issued pursuant to this chapter if it shall find that the applicant is not of good character, is not qualified to hold the license applied for or that the applicant, or any person who is a partner, agent or employee or associate of the applicant, has been convicted of a crime in any jurisdiction, or is associating or consorting with any person or persons who has been convicted of a crime or crimes in any jurisdiction, or is consorting with, or has consorted with bookmakers, touts or persons of similar pursuits, or is financially irresponsible, or has been guilty of or attempted any fraud or misrepresentation in connection with racing, breeding or otherwise, or has violated or attempted to violate any law with respect to racing in any jurisdiction or any rule, regulation or order of the Commission, or shall have violated any rule of racing which shall have been approved or adopted by the Commission, or has been guilty of or engaged in similar, related or like practices.

(d) In considering an application for a license, the Commission or Executive Director may require that the applicant appear before the Commission, the Executive Director or a designee for an interview in connection with the license application. An applicant has the unqualified duty to cooperate with the Commission in connection with its investigation into any application for a license, and a license shall be denied where the applicant fails to do so.

(e) Any person making any false, untrue or misleading statements on a license application, or in connection with any written or oral examination in connection with an application for a license, shall be denied a license and is subject to the additional penalties set forth in N.J.A.C. 13:74-5.10.

(f) Where a license is denied, the Executive Director shall cause a ruling to be issued reflecting the license denial. An applicant who has been denied a license may appeal the license denial to the Commission in accordance with N.J.A.C. 13:74-5.12.

13:74-5.9 License conditions

The Commission shall have the discretion to impose conditions upon any license necessary to effectuate the purposes of the Act and this chapter.

13:74-5.10 Suspension or revocation of a license; penalties for violations

(a) Any license issued pursuant to this chapter, considering the particular facts present and the nature of the violation, may, following the conduct of a hearing, be suspended for a finite period of time, suspended indefinitely, permanently revoked, and a monetary fine issued, or a letter of reprimand issued, at any time for:

1) Misconduct or malfeasance;

2) Conduct detrimental to racing;

3) Failure to comply with any license condition;

4) Violation of any rule or order of the Commission;

5) Failure to comply with the requirements of the Act, this chapter, or fraudulent activity;

6) Bribery; financial irresponsibility, meaning the accumulation of unpaid obligations, or the issuance of drafts or checks that are dishonored or on which payment is refused, or otherwise displaying financial irresponsibility reflecting on off-track wagering, account wagering or racing;

7) Failure to cooperate with the Commission in any investigation as required by N.J.A.C. 13:74-5.11; or

8) Any attempt to commit, or participation in any conspiracy to commit, any of the above-listed acts.

(b) Any fine imposed as a result of a violation of this chapter shall not exceed $5,000 per violation. Where the violation is ongoing in nature, a fine not to exceed $5,000 per day may be imposed. A penalty of revocation may only be ordered by the Commission.

(c) Where a license suspension or license revocation is ordered, the licensee subject to the action shall be ordered not to appear at any premises subject to the jurisdiction of the Commission.

(d) In imposing any penalty, the imposition of remedial conditions may be ordered.

(e) A licensee, subject to compliance with the requirements and procedures set forth in N.J.A.C. 13:71-26.9, may have his or her license suspended immediately when the licensee is indicted in this State for a crime of the first, second, third or fourth degree, or is indicted for a similar crime under Federal law or the law of another state or country.

(f) Where a penalty is imposed as a result of a violation of this Chapter, the Executive Director shall cause a ruling to be issued reflecting the violation and penalty ordered.

13:74-5.11 Duty to cooperate; knowledge of violations

(a) A licensee who shall come into possession of knowledge concerning any violation of N.J.A.C. 13:70, 13:71, 13:72 or 13:73, the rules of racing or any violation of law in connection with off-track wagering, the account wagering system or the running of a race, shall immediately report the information to the Commission for investigation and such action as the case may warrant.

(b) A licensee has the duty to fully cooperate in any investigation being conducted by the Commission.

(c) A licensee shall give every possible cooperation, aid and assistance to any department, bureau, division, officer, agent or inspector, or any other person connected with the United States government or with this State, who may be investigating or prosecuting any matter involving a violation of law, or any other rules of the Commission.

13:74-5.12 Hearing requirement and procedure

(a) Pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq., and 52:14F-1 et seq., and the Uniform Administrative Procedure Rules, N.J.A.C. 1:1, the Commission may directly conduct a hearing to determine if a violation of its rules has occurred. Upon a finding of violation(s), the Commission may directly impose any of the penalties set forth in N.J.A.C. 13:71-5.10. Alternatively, the Commission may refer the matter to the Office of Administrative Law for a recommended decision.

(b) The licensee shall be responsible for any costs incurred in connection with any hearing held pursuant to this section.

13:74-5.13 Stay requests and determinations

Where a penalty has been issued or adopted in a final decision, the licensee may submit a written request to the Executive Director for a stay pending appeal to the Appellate Division of the Superior Court of New Jersey, which shall set forth all facts and arguments in support of the stay request. The Executive Director may deny a stay request if he or she determines that the grant of a stay would be adverse to the best interests of off-track wagering or the account wagering system, as the case may be, or adverse to the best interests of racing or inimical to the integrity of the sport. The decision of the Executive Director on the stay request shall constitute a final decision which may be appealed to the Appellate Division.

13:74-5.14 Reciprocity

Full force and effect shall be given to the denial, revocation or suspension of any license by any other Racing Commission, or other regulatory body with the responsibility to oversee the conduct of racing, off-track-wagering or account wagering authority.

SUBCHAPTER 6. STANDARDS FOR OFF-TRACK WAGERING FACILITIES

13:74-6.1 Square footage, amenity and safety requirements

(a) An off track wagering licensee shall establish and maintain an off-track wagering facility of sufficient square footage to promote:

1. Maximum comfort and safety for patrons and efficient operation of the facility;

2. Viewing of simulcast horse races by patrons in a comfortable manner, which is not obtrusive to the additional amenities within the off-track wagering facility;

3. Dining and handicapping facilities as contemplated by the Act, according to specifications approved by the Commission;

4. Optimum security of the facility, which shall include the installation and maintenance of security and surveillance equipment in public and non-public areas to include closed circuit television equipment to enhance safety, the integrity of wagering, and the integrity of the proceeds from wagering, according to specifications approved by the Commission. The Commission shall have access to the system or its signal to the same extent as the employees of the off-track wagering licensee with responsibility in such area; and

5. Sufficient and convenient parking to accommodate patrons, and to promote the efficient ingress and egress with regard to the off-track wagering facility, where parking is to be offered as a planned feature of the off-track wagering facility.

13:74-6.2 Odds display

An off-track wagering facility shall prominently display in its facility the approximate odds for each horse in a simulcast race for the purpose of informing patrons of the actual wagering on each horse.

13:74-6.3 Race information availability

An off-track wagering facility shall make race information available to patrons in a manner consistent with N.J.A.C. 13:70 in the case of thoroughbred races, and in a manner consistent with N.J.A.C. 13:71 in the case of harness races.

13:74-6.4 Commingling and transmission failure notice

(a) The off-track wagering licensee shall display prominently in each off-track wagering facility a notice, as approved by the Commission, that it is commingling wagers as required by the Act and this chapter. Such notice shall further provide that this procedure may result in changes in pools and pari-mutuel odds during the running of a simulcast race and after the close of betting.

(b) The off-track wagering facility shall display prominently in each off-track wagering facility a notice, as approved by the Commission, as to the transmission failure requirement set forth in N.J.A.C. 13:74-9.6.

13:74-6.5 Ticket sales

All pari-mutuel machines in an off-track wagering facility shall be locked at off-time and wagering shall cease no later than off-time. No pari-mutuel ticket may be issued for any particular race at an individual sending track after the totalisator has been locked or wagering has ceased, whichever occurs first. No wager shall be honored for payment, and no payment shall be made on any wager, where the corresponding pari-mutuel ticket is found to have been issued in violation of this section.

13:74-6.6 Refunds

For races offered for wagering at an off-track wagering facility from an in-State sending track, the refund rule set forth at N.J.A.C. 13:70-29.29 shall apply as to thoroughbred races, and the refund rule set forth at N.J.A.C. 13:71-27.28 shall apply as to harness races. For races offered for wagering at an off-track wagering facility from an out-of-State sending track, and subject to the provisions of N.J.A.C. 13:74-8.6(b) where an interstate common pool is formed, the refund rule as set forth in N.J.A.C. 13:74-8.5 shall apply.

13:74-6.7 Cancellation of tickets issued at off-track wagering facilities

(a) Except as provided in this section, no pari-mutuel ticket issued at an off-track wagering facility shall be cancelled.

(b) A pari-mutuel ticket with a total value of $500.00 or less may be cancelled at any time prior to off-time.

(c) A pari-mutuel ticket of any value may be canceled prior to the end of the delay period if the patron has not left the pari-mutuel window at which the ticket was purchased or if the patron left the window without paying for or accepting the ticket

(d) A pari-mutuel ticket of any value may be cancelled prior to off-time if the ticket is on a wager (such as trifecta) where probable payoffs or odds are not displayed to the public.

(e) A pari-mutuel ticket of any value may be cancelled if the ticket is on an advance race and the race immediately preceding the race for which the cancellation has been requested has not been declared official.

(f) A pari-mutuel ticket with a total ticket value exceeding $500.00 which is not otherwise cancelable pursuant to this section may be cancelled by an off-track wagering facility simulcast shift supervisor or supervisor thereof at any time prior to off-time if he or she determines that the cancellation will not significantly alter a pari-mutuel pool. The factors to be considered before approving or disapproving a cancellation request include the size of the mutuel pool, the reason for the requested cancellation, current odds, minutes to post, and any late changes such as track conditions or jockey or driver changes as may be the case. Any request to cancel such a ticket shall be reported to the Commission on a form approved by the Commission within 48 hours.

13:74-6.8 Ticket claims

(a) Subject to the time limitations set forth in N.J.A.C. 13:74.6-9(a) as to the claiming of pari-mutuel tickets, a winning pari-mutuel ticket, a refundable pari-mutuel ticket or credit voucher issued at an off-track wagering facility shall be presented for cashing at a pari-mutuel window or a self-service machine at the off-track wagering facility where issued, at any off-track wagering facility, or at any racetrack in this State.

(b) No claim shall be considered for pari-mutuel tickets which have been discarded, lost, altered, destroyed or mutilated beyond identification.

(c) Payment of wagers will be made only upon the presentation of appropriate pari-mutuel tickets.

(d) No claim shall be considered for a credit voucher which has been discarded, lost, altered, destroyed or mutilated beyond identification, or otherwise not presented for payment in the absence of a regulation, promulgated pursuant to N.J.A.C. 13:70 or 71, specifically authorizing such claims in this State.

13:74-6.9 Expiration of pari-mutuel tickets

(a) A pari-mutuel ticket shall be claimed within six months from of the date of issue (that is, for example, a pari-mutuel ticket purchased on January 1 will expire at the close of business on July 1), after which it becomes an expired pari-mutuel ticket to be paid to the Commission for distribution consistent with the Act.

(b) Notice of this expiration provision shall be prominently posted in an off-track wagering facility and shall be printed on each pari-mutuel ticket sold at an off-track wagering facility. The failure of a pari-mutuel ticket to contain notice of this expiration provision, for any reason including printing error, shall not entitle a patron to payment of the ticket where it is not presented for payment within six months of the date of issue as required by (a) above.

(c) Credit vouchers issued at an off-track wagering facility shall not expire.

13:74-6.10 No fee to be charged

No fee, in addition to the amount wagered, shall be charged at an off-track wagering facility in connection with a wager on a simulcast horse race. An off-track wagering licensee shall not be precluded from charging an entry fee to the facility, subject to the approval of the Commission.

13:74-6.11 Proceeds from off-track wagering; money room requirements

(a) All proceeds from wagering at an off-track wagering facility shall be delivered to and deposited within a money room within the off-track wagering facility, which shall be a secure area with limited access. An off-track wagering facility shall develop and implement written procedures, designed to accurately account for and track proceeds from wagering from the time the related wager is placed through delivery to the money room and ultimate distribution therefrom, which are to be included in the internal control procedures filed with the Commission pursuant to N.J.A.C. 13:74-2.1(d) and 2.2(e).

(b) All takeouts from wagering at an off-track wagering facility, resulting from patrons who are present at an off-track wagering facility and who use their account wagering account to wager at that facility, shall be distributed in accordance with N.J.A.C. 13:74-7.14(b).

(c) All proceeds from wagering at an off-track wagering facility shall be disbursed by the off-track wagering licensee and Commission, as appropriate, in accordance with the Act and this Chapter.

(d) A money room at an off-track wagering facility shall include closed circuit television equipment consistent with N.J.A.C. 13:74-6.1(a)4.

13:74-6.12 Testing of equipment and software

Except as required by N.J.A.C. 13:74-9.3, or unless an emergency situation exists in which case verbal notice to the Executive Director or designee shall be acceptable, the off-track wagering licensee shall provide written notice to the Commission of any new equipment or software, or change in equipment or software, to be utilized at an off-track wagering facility or in connection with off-track wagering. The writing shall set forth what testing has been accomplished with regard to the new equipment or software, or change in equipment or software, and the results of the testing, to insure the integrity of off-track wagering and the related proceeds. The Commission, before implementation of such equipment or software by the off-track wagering licensee, may require such additional testing as it determines appropriate.

13:74-6.13 Patron complaints

(a) The off-track wagering licensee, at a location within the off-track wagering facility approved by the Commission, shall provide a comment box with a locking mechanism to allow patrons the ability to provide written complaints to the Commission by depositing a completed form as provided by the Commission within the comment box.

(b) The off-track wagering licensee, its employees and agents shall not have direct access to the complaints submitted by patrons as a result of depositing a completed Commission complaint form into the comment box. The Executive Director shall provide a copy of each complaint to the off-track wagering licensee unless the Executive Director determines that to do so would be inconsistent with a Commission investigation or criminal investigation.

13:74-6.14 Off-track wagering, and maintaining a presence at an off-track wagering facility, by certain persons prohibited

(a) No person under the age of 18 years shall be permitted in any off-track wagering facility, except in dining areas if there accompanied by a parent or guardian. An off-track wagering facility shall contain a prominent notice concerning this requirement, at the entrance to the off-track facility and at each dining location within the off-track wagering facility.

(b) A person not in good standing with or who has been excluded by the Commission from appearing at any premises subject to the jurisdiction of the Commission pursuant to N.J.A.C. 13:70, 13:71 or 13:72, including, but not limited to, the premises of permitted racetracks, licensed farms, non-licensed farms where racehorses are situated, and casino simulcast facilities, shall not be permitted to appear upon the premises of or wager within an off-track wagering facility.

(c) Nothing contained in this chapter shall be interpreted to preclude the Commission from initiating a hearing, in accordance with N.J.A.C. 13:74-5.12, with regard to a non-licensed patron of an off-track wagering facility whose presence is inimical to the integrity of racing, or who is in violation of this Act, this chapter or the Commission's rules appearing at N.J.A.C. 13:70, 13:71 or 13:72, for the purpose of excluding the patron from appearing at off-track wagering facilities in this State, from maintaining a wagering account, and appearing at any premises subject to the jurisdiction of the Commission.

SUBCHAPTER 7. STANDARDS FOR ACCOUNT WAGERING SYSTEM

13:74-7.1 Establishment of a wagering account

(a) A person may only place an account wager if he or she has established a wagering account in accord with the Act and this chapter. To establish a wagering account, a person must be a New Jersey resident and 18 years of age or older. A wagering account shall be established in the name of a natural person only, and shall not be assigned or otherwise transferred. A natural person may only hold and maintain one wagering account at any time. A wagering account shall be established with and through the account wagering licensee, and no person or entity other than the account wagering licensee shall accept an account wager from a person within this State.

(b) A wagering account may be established by a prospective account holder completing an application form developed by the account wagering licensee, and approved by the Commission. The application is to be submitted, together with the prospective account holder's principal residence address and a signed certification including proof of age and residency of the applicant, to the account wagering licensee for processing consistent with its internal control procedures, the Act and this chapter. The account wagering licensee shall have discretion to accept an account wagering application from an applicant appearing in-person at, or sent by mail or other means approved by the Commission to any of the following locations in this State: the phone bank, the premises of the account wagering licensee or its agent, the premises of an off-track wagering facility, the premises of a racetrack facility, or the premises of such other entity as approved by the Commission and determined by the Commission to be consistent with the Act and this Chapter. All account wagering applications shall be processed at a location as required by N.J.A.C. 13:74-7.8.

(c) The signed certification of an applicant, which shall accompany an application to establish a wagering account, shall include a statement that a false or misleading statement made in regard to an application may subject the applicant to prosecution, to an enforcement action initiated by the Commission consistent with this chapter, and to rejection of the application or cancellation of the wagering account by the account wagering licensee without notice.

(d) A wagering account application shall include or be accompanied by notice, as approved by the Commission, that the address provided by the prospective account holder in the application shall be deemed the proper address for the purposes of mailing checks, account withdrawals, notices including as concerns dormant accounts, and the mailing of other materials.

(e) A wagering account application shall include or be accompanied by notices, as approved by the Commission, in compliance with N.J.A.C. 13:74-7.6 and 7.12.

(f) The account wagering licensee shall provide the prospective account holder, at the time of the opening of a wagering account, with the operation rules adopted by the account wagering licensee concerning wagering account deposits, wagering account withdrawals, a non-accumulation of interest disclosure as to wagering accounts, maintenance requirements of the wagering account including rules concerning dormant accounts, credit or debit card usage rules, a procedure to amend an account wagering application to update the account holder's address or other information required by the account wagering licensee, any reporting obligations of the account wagering licensee for taxation purposes, the dispute resolution procedure adopted by the account wagering licensee pursuant to N.J.A.C. 13:74-7.16(e), the complaint procedure to the Commission as set forth in N.J.A.C. 13:74-7.17(a), and any other aspects of the operation of the account as determined by the account wagering licensee. The account holder shall be deemed to have accepted the rules of account operation upon opening or not closing the account. The account wagering licensee shall notify the account holder whenever the rules governing the wagering account are changed, which notification shall occur before the new rules are applied to the account to allow opportunity for the account holder to close the account in advance of those new rules becoming effective.

13:74-7.2 Review of account wagering application by account wagering licensee, suspension or closure of wagering account

(a) The account wagering licensee shall accept or reject an application for a wagering account after receipt and review of the application for compliance with the Act and this chapter. Any prospective account holder who provides false or misleading information on the application is subject to rejection of the application or cancellation of the wagering account, by the account wagering licensee, without prior notice.

(b) The account wagering licensee may additionally reject an account wagering application, or suspend or close a wagering account at its discretion, including where the account holder attempts to place a wager or wagers with an insufficient account balance.

(c) The decision of the account wagering licensee to reject an application for a wagering account, or to suspend or close a wagering account, shall constitute a final decision and shall not be the subject of any appeal to the Commission.

(d) Where the account wagering licensee rejects an application for a wagering account, suspends the operability of a wagering account for a period of 48 hours or longer, or closes a wagering account pursuant to this section or N.J.A.C. 13:74-7.3, it shall file a written report with the Commission identifying:

1) The name of the applicant or account holder;

2) The address of the applicant or account holder;

3) The date the application for the wagering account was filed, the date of the rejection of the wagering account application or the date of the suspension or closure of the wagering account; and

4) The reason for the rejection of the application, suspension or closure of the wagering account.

13:74-7.3 Restrictions on placing and accepting account wagers

(a) The account wagering licensee shall only accept wagers from New Jersey residents who have established an account in accordance with the Act and this chapter. Prior to making any account inquiry or requesting any account transaction, an account holder shall provide his or her confidential personal identification number, to be selected in a manner subject to the discretion of the account wagering licensee consistent with its internal control procedures, and such other information as required by the account wagering licensee which may include the account holder's confidential account number. The account wagering licensee shall not provide any account information or consummate any account transaction unless the account holder first provides the correct confidential personal identification number and satisfies any other requirements of the account wagering licensee. The account wagering licensee may not accept a wager, or series of wagers, in an amount in excess of the funds on deposit and available within the wagering account of the account holder who desires to place the wager.

(b) Unless otherwise approved by the Commission, or authorized by this chapter, no person, corporation or other entity shall directly or indirectly act as an intermediary, transmitter or agent in the placing of wagers for a holder of a wagering account.

(c) All persons or entities accepting wagers on behalf of the account wagering licensee shall do so at a location within this State.

(d) No pari-mutuel wager may be accepted after the totalisator has been locked or wagering has ceased, whichever occurs first. All pari-mutuel machines in connection with account wagering shall be locked at off-time and wagering shall cease no later than off-time.

13:74-7.4 Credits to a wagering account

(a) Subject to the right of the account wagering licensee to refuse for any reason all or any part of any deposit to a wagering account, and consistent with the internal control procedures of the account wagering licensee, an account holder may make a deposit into his or her wagering account by remitting funds to the account wagering licensee, the licensee's agent, or in the account wagering licensee's discretion, a racetrack, a licensed off-track wagering facility or such other entity as may be approved by the Commission.

(b) Any funds intended for deposit by an account holder into his or her wagering account shall be made payable to the account wagering licensee in the form of: a cash deposit utilizing a properly completed and executed deposit slip approved by the Commission; a credit or debit card or cards specifically approved by the account wagering licensee, upon the account holder's direct and personal instruction (which instruction may be given by telephone or other electronic means); check, money order, negotiable order of withdrawal utilizing a properly executed deposit slip approved by the Commission, or wire transfer or electronic transfer. A deposit to a wagering account shall only be accepted where the account holder first provides a correct confidential account number and a correct confidential personal identification number for the account. A receipt for each deposit shall be issued to the account holder, but the receipt need not reflect the current account balance. A deposit to a wagering account or wagering accounts, by credit card or cards, shall only be accepted by the account wagering licensee in a maximum amount consistent with its internal control procedures, as approved by the Commission, for each account holder. The funds deposited into a wagering account shall not bear interest to the account holder. The internal control procedures of the account wagering licensee shall set forth procedures addressing the allocation of such interest funds, including as to their disbursement to the account wagering licensee for retention by it, or for such use as the account wagering licensee deems appropriate.

(c) Credit for winnings from wagers placed with funds in a wagering account shall be promptly posted to the wagering account by the account wagering licensee, consistent with its internal control procedures.

(d) Credit for refunded pari-mutuel tickets shall be promptly posted to the wagering account by the account wagering licensee, consistent with its internal control procedures. For races offered for wagering through the account wagering system from an in-State host track, the refund rule set forth at N.J.A.C. 13:70-29.29 shall apply as to account wagers placed on thoroughbred races, and the refund rule set forth at N.J.A.C. 13:71-27.28 shall apply as to account wagers placed on harness races. For races offered for wagering through the account wagering system from an out-of-State host track, and subject to the provisions of N.J.A.C. 13:74-8.6(b) where an interstate common pool is formed, the refund rule as set forth in N.J.A.C. 13:74-8.5 shall apply.

(e) An account holder may not place an account wager drawn upon sums deposited into his or her wagering account, regardless of the manner of deposit of those funds, unless the deposit has first been administratively processed by the account wagering licensee, the funds subject of the deposit have been credited to the wagering account of the account holder, the funds subject of the deposit have satisfied any banker's or other required clearance, and the funds subject of the deposit are actually available within the account. Holding periods shall be determined by the account wagering licensee, who shall make such information available to the account holder upon request.

13:74-7.5 Debits to a wagering account

(a) Upon receipt by the account wagering licensee of an account wager placed in accordance with the Act, this chapter and the internal control procedures of the account wagering licensee, the account wagering licensee shall promptly debit the account holder's wagering account in the amount of the wager.

(b) An account holder may request a withdrawal of the available funds in his or her wagering account or any portion thereof. The account wagering licensee shall authorize a disbursement of the amount requested to the account holder consistent with its internal control procedures where there are sufficient funds in the wagering account and where the account holder provides to the account wagering licensee, the licensee's agent, or in the account wagering licensee's discretion to a permit holder or off-track wagering facility for transmittal purposes, or such other entity as approved by the Commission, each of the following: proper identification; a correct confidential account number; a correct personal identification number; and a properly completed and executed withdrawal slip on a form approved by the Commission. Where a withdrawal is requested by an account holder by telephone, or by other electronic means as approved by the Commission, an executed withdrawal form will not be required where the account holder has previously and in writing authorized the account wagering licensee to accept withdrawal requests by such approved electronic means.

(c) No later than three business days following the receipt of a properly completed and executed withdrawal form, which shall be processed by the account wagering licensee at a location consistent with the requirements of N.J.A.C. 13:74-7.8, the account wagering licensee shall send, to the address specified in the wagering application for the account holder, a check made payable to the account holder in the amount requested and available in his or her account. The address provided by the account holder in the application to establish the wagering account shall be deemed to be the proper address for this purpose, unless the account holder has properly amended his or her application to reflect a new address consistent with the procedures established by the account wagering licensee for such purpose.

13:74-7.6 Cancellation of account wagers; finalization of account wagers

(a) An account wager may be cancelled by the account holder consistent with the provisions of N.J.A.C. 13:74-6.7. A statement, approved by the Commission, shall appear in or accompany the account wagering application form advising prospective applicants of this requirement.

(b) Any account wagering opportunity must provide for the account holder's review and finalization of a wager before it is accepted by the account wagering licensee, and the account wagering licensee must establish a method to record or document such finalization process. The method of wager review and finalization, and method of recordation of the finalization process, shall be set forth in the account wagering licensee's internal control procedures, unless specifically required by this chapter.

(c) Neither the account holder nor the account wagering licensee shall change a wager after the account holder has reviewed and finalized the wager, except where the wager is properly cancelled in accordance with (a) above.

13:74-7.7 Declaration by account wagering licensee to close account wagering system

The account wagering licensee, in accordance with its internal control procedures, may at any time declare the account wagering system closed for receiving any wagers on any race, or closed for all wagering.

13:74-7.8 Phone bank facility requirement and functions; minimum standards of operation

(a) The account wagering licensee shall establish and maintain a phone bank facility in this State, which premises shall:

1) Receive and process all wagers placed by telephone from account holders either through live operators or through an automated telephone wagering system implemented consistent with the internal controls of the account wagering licensee;

2) Receive and process all wagers placed by computer, or other Commission approved electronic means, from account holders consistent with the internal control procedures implemented by the account wagering licensee, unless another location within the State is approved for such purpose by the Commission;

3) Receive directly or have transmitted to it for processing all applications for wagering accounts consistent with the internal control procedures of the account wagering licensee, unless another location within the State is approved for such purpose by the Commission; and

4) Conduct all administrative matters relating to the maintenance of existing wagering accounts consistent with the internal control procedures of the account wagering licensee, unless another location within the State is approved for such purpose.

(b) There shall be a single phone bank facility in this State, unless the Commission approves the establishment of more than one such facility in this State.

13:74-7.9 Testing of equipment and software

Except as provided by N.J.A.C. 13:74-9.3, or unless an emergency situation exists in which case verbal notice to the Executive Director or designee shall be acceptable, the account wagering licensee shall provide written notice to the Commission of any new equipment or software, or change in equipment or software, to be utilized in connection with the account wagering system. The writing shall set forth what testing has been accomplished with regard to the new equipment or software, or change in equipment or software, and the results of the testing, to insure the integrity of the account wagering system and the related proceeds. The Commission, before implementation of such equipment or software by the account wagering licensee, may require such additional testing as it determines appropriate.

13:74-7.10 Facilities at or through which an account holder may place wagers

(a) Subject to the right of the account wagering licensee to refuse all or part of any wager for any reason, the account wagering licensee may accept account wagers from account holders through a closed loop system in the following manners and at the following premises, consistent with the Act, this chapter, and the internal control procedures of the account wagering licensee:

1) By telephone;

2) By computer;

3) At the premises of an off-track wagering facility, including through self-service pari-mutuel machines and other wagering devices at such premises as approved and determined by the Commission to be consistent with the Act and this chapter;

4) At the premises of a racetrack facility or successor in interest, including through self-service pari-mutuel machines and other wagering devices at such premises as approved and determined by the Commission to be consistent with the Act and this chapter; and

5) By such electronic or other means and at such other premises upon application to and a determination by the Commission that such would be consistent with the Act and this chapter.

13:74-7.11 Race information availability

(a) The account wagering licensee shall have discretion concerning what race information, if any, to make available to account holders who place account wagers by telephone, by computer or by other electronic means as approved by the Commission. The account wagering licensee shall file a report with the Commission, before implementing any form of account wagering, identifying any race information which it will make available to account holders.

(b) An account holder who wagers in-person at an off-track wagering facility through a wagering account, as a patron of an off-track wagering facility, shall have such race information available to him or her on the same terms as is required by N.J.A.C. 13:74-6.3.

(c) An account holder who wagers in-person at a racetrack through a wagering account, as a patron of a racetrack, shall have such race information available to him or her on the same terms as required by N.J.A.C. 13:70 and 13:71 as appropriate.

13:74-7.12 Commingling and transmission failure notice requirements

(a) An application to establish a wagering account shall contain or be accompanied by a statement, approved by the Commission, that the account wagering licensee is commingling wagers as required by the Act and this chapter. Such notice shall further provide that this procedure may result in changes in pools and pari-mutuel odds during the running of a simulcast race and after the close of betting.

(b) An application to establish a wagering account shall contain or be accompanied by a statement, as approved by the Commission, as to the transmission failure requirement of N.J.A.C. 13:74-9.6.

13:74-7.13 Fees to be charged in connection with account wagering

(a) Except as provided in (b) below, no fee in addition to the amount wagered shall be charged by the account wagering licensee in connection with the placing of account wagers or a series of account wagers, unless approved by the Commission and determined by the Commission to be consistent with the Act and this chapter.

(b) The account wagering licensee may charge an administrative or access fee in connection with account wagers or a series of account wagers where account wagers are placed by telephone through live operators. The type of fee to be charged if any, as well as the amount of any such fee to be charged, shall be subject to the approval of the Commission.

13:74-7.14 Proceeds from account wagering

(a) All proceeds from wagering through the account wagering system shall be disbursed by the account wagering licensee and Commission, as appropriate, in accordance with the Act and this chapter. A permit holder or successor in interest to a permit holder who is not eligible to enter into an account wagering participation agreement with the Authority may not directly share in any revenues as a result of the implementation of account wagering. Except as provided in (b) and (c) below, a permit holder or successor in interest to a permit holder who is not eligible to enter into a participation agreement with the Authority may not indirectly share in any revenues related to account wagering.

(b) All takeouts from wagering, resulting from account holders placing account wagers through pari-mutuel clerks, self-service machines or other Commission approved wagering devices situated at an off-track wagering facility, shall be distributed as if the wager were placed with cash at that off-track wagering facility.

(c) All takeouts from wagering, resulting from account holders placing account wagers through pari-mutuel clerks, self-service machines or other Commission approved wagering devices at a race track, shall be distributed as if the wager were placed with cash at that race track.

13:74-7.15 Dormant accounts

(a) The account wagering licensee, consistent with this chapter and its internal control procedures, may in its discretion cause a dormant account to be closed.

(b) The account wagering licensee, at least 30 days before the date on which any dormant account is to be closed, shall forward by regular and certified mail to the address of the account holder as set forth in the account holder's account wagering application (or properly amended application) notice of the date on which the account shall be closed. The notice shall provide that, upon any closure of the account, the funds within the account shall be disbursed as set forth in (c) below. The notice shall further provide what actions the account wagering licensee must take, consistent with the internal control procedures of the account wagering licensee, in order for the account holder to secure the funds in the account prior to its closure, or alternatively and subject to the discretion of the account wagering licensee, to cause the wagering account not to be closed and remain an active account.

(c) Where a wagering account is closed consistent with this section, the funds which were within the closed account shall be disbursed as follows: 50 percent shall be retained by the account wagering licensee; and the remaining 50 percent shall be transmitted within 30 days of the closing of the account to the Commission for deposit into Racing Industry Special Fund as established pursuant to the Act. The account wagering licensee, when transmitting such funds to the Commission, shall include a copy of the report concerning the closing of the related wagering account required to be maintained by N.J.A.C. 13:74-7.2(d).

13:74-7.16 Account wagering system records maintenance; Account Disputes

(a) The account wagering licensee shall maintain complete records of every deposit, withdrawal, wager and winning payoff for each account wager, which records shall be made available to the Commission upon request.

(b) For account wagers and other transactions made by telephone, the account wagering licensee shall make a voice recording of the entire transaction and shall not accept any such wager or transaction if the voice recording system is inoperable. The voice recording of the account holders finalization of the wager, as required by N.J.A.C. 13:74-7.6(b), shall be deemed to be the actual wager or record of transaction, regardless of what wager was recorded by the pari-mutuel system. The voice recording records shall be made available to the Commission upon request.

(c) For account wagers or transactions made by computer or other electronic means approved by the Commission, the account wagering licensee shall maintain a printable record of the entire transaction and shall not accept any such wager or transaction if the printable record system is inoperable. The record of the finalization of the wager, as required by N.J.A.C. 13:74-7.6(b), shall be deemed to be the actual wager or record of transaction, regardless of what wager was recorded by the pari-mutuel system. The records shall be made available to the Commission upon request.

(d) For account wagers or transactions made by an account holder in-person at an off-track wagering facility or permitted racetrack facility, the account wagering licensee shall maintain a printable record of the entire transaction and shall not accept any such wager or transaction if the printable record system is inoperable. The record of the finalization of the wager, as required by N.J.A.C. 13:74-7.6(b), shall be deemed to be the actual wager or record of transaction, regardless of what wager was recorded by the pari-mutuel system. The records shall be made available to the Commission upon request.

(e) The account wagering licensee shall provide each account holder, upon reasonable request and consistent with its internal control policies, with a statement of account showing each wagering deposit, each wagering account withdrawal, each credit to the wagering account, and each debit to the wagering account made during the time period reported by the account statement. The account holder may dispute any transaction in accordance with the account wagering licensees dispute resolution procedure, which procedure shall be set forth in the account wagering licensee's internal control procedures. In any dispute initiated in accordance with such procedure, or as otherwise permitted by the account wagering licensee in its discretion, the account holder shall have the right to review the voice recorded or printable record of his or her wagering account transaction or wager as described in (b), (c) and (d) above. The decision of the account wagering licensee as to any dispute shall not be the subject of any appeal to the Commission, and shall constitute a final decision. The records referred to in this subsection shall be made available to the Commission upon request.

(f) The account wagering licensee shall maintain all records required by this section for a period of time consistent with the ability of an account holder to dispute a transaction consistent with its internal control procedures and, except as otherwise noted within this subsection, for a period of not less than six months from the date of the related wagering transaction. All telephone voice recordings of wagering transactions shall be maintained for a period of not less than thirty days from the date of the related wagering transaction. All wagering account applications or amendments thereto shall be retained by the account wagering licensee for a minimum period of one year following the rejection of the application by the account wagering licensee, or where an account has been established, for a minimum period of one year following the closure of the related wagering account.

13:74-7.17 Account holder complaints to Commission

(a) An application to establish a wagering account shall contain or be accompanied by a statement, as approved by the Commission, advising the prospective applicant that an account holder may file any complaints as may concern the account wagering system with the Commission in writing or by computer. The statement shall include the present address of the Commission for such purpose, and the email address of the Commission for such purpose.

(b) The account wagering licensee, its employees and agents shall not have direct access to the complaints submitted by account holders as a result of the filing by an account holder of a complaint in writing or by computer. The Executive Director shall provide a copy of each complaint to the account wagering licensee unless the Executive Director determines that to do so would be inconsistent with a Commission investigation or criminal investigation.

13:74-7.18 Account wagering by certain persons prohibited

(a) A person not in good standing with or has been excluded by the Commission from appearing at any premises subject to the jurisdiction of the Commission pursuant to this chapter or N.J.A.C 13:70, 13:71 or 13:72, including, but not limited to, the premises of off-track wagering facilities, racetracks, licensed farms, non-licensed farms where racehorses are situated, and casino simulcast facilities, shall not be permitted to have or to maintain a wagering account.

(b) Nothing contained in this chapter shall be interpreted to preclude the Commission from initiating a hearing with regard to a patron or account holder whose continued participation in the account wagering system would be inimical to the integrity of account wagering or racing, or who is in violation of the Act, this chapter or the Commissions rules appearing at N.J.A.C 13:70, 13:71 or 13:72, for the purpose of excluding the account holder from participating in racing, maintaining a wagering account, and appearing at any premises subject to the jurisdiction of the Commission.

SUBCHAPTER 8. CONDUCT OF OFF-TRACK WAGERING AND ACCOUNT WAGERING

13:74-8.1 Parameters of off-track wagering and account wagering; hub facility

requirement

(a) Off-track wagering may only be conducted in a licensed off-track wagering facility, and off-track wagering and account wagering may be conducted in accordance with the provisions of the Act and this chapter.

(b) The off-track wagering licensee in connection with off-track wagering, and the account wagering licensee in connection with account wagering, shall utilize the same hub facility unless the Commission approves otherwise. A hub facility shall be licensed by the Commission on an annual basis by the Commission.

13:74-8.2 Receipt of races from in-State tracks

(a) An off-track wagering facility, as a condition of continued operation, shall receive all live races that are transmitted by in-State sending tracks approved by the Commission to participate in off-track wagering. A permit holder authorized by the Commission to conduct live racing shall have discretion to transmit all or some of the live horse races conducted at the racetrack to off-track wagering facilities. Any race which is transmitted from an in-State sending track shall be transmitted to all off-track wagering facilities. A permit holder who wishes to transmit some, but not all, of its live horse races to off-track wagering facilities shall do so only with the prior approval of the Commission. Where an off-track wagering licensee offers a wagering opportunity to its patrons on a race from an in-State sending track, each patron at the off-track wagering facility shall be offered the same wagering opportunity on said race.

(b) The account wagering licensee may accept wagers from account holders on a race from an in-State host track that has been approved by the Commission to participate in account wagering. Where the account wagering licensee offers a wagering opportunity to account holders on a race from an approved in-State host track, each account holder shall be offered the same wagering opportunities on said race.

13:74-8.3 Receipt of races from out-of-State sending tracks

(a) An off-track wagering facility may receive live races from an out-of-State sending track that has been approved by the Commission to participate in off-track wagering. Where the off-track wagering facility offers a wagering opportunity to its patrons on a race from an approved out-of-State track, each patron shall be offered the same wagering opportunity on that race. An out-of-State sending track which transmits any race to an off-track wagering facility shall offer to transmit such race to all off-track wagering facilities on the same terms.

(b) The account wagering licensee may accept wagers from account holders on a race from an out-of-State host track that has been approved by the Racing Commission to participate in account wagering. Where the account wagering licensee offers a wagering opportunity to account holders on a race from an approved out-of-State host track, each account holder shall be offered the same wagering opportunity on said race.

13:74-8.4 Formation of pari-mutuel pool for horse races from in-State sending tracks or in-State host tracks

(a) All sums wagered at an off-track wagering facility on a race transmitted by an in-State sending track, and all sums wagered through account wagering on a race transmitted by an in-State host track, shall be included within the comparable in-State tracks pari-mutuel pool for said race, and winners of wagers placed at the off-track wagering facility are to be paid at the same odds as winners of wagers placed at the in-State sending track.

(b) The forms of traditional and exotic wagers which may be offered for wagering at an off-track wagering facility and through the account wagering system, and originating from an in-State sending track or in-State host track, shall be the same as those authorized by the Commission on the live race to be conducted at the in-State track and as set forth within N.J.A.C. 13:70 and 13:71.

13:74-8.5 Formation of pari-mutuel pool for horse races from out-of-State sending tracks or out-of-State host tracks

Except where an interstate common pool is formed pursuant to N.J.A.C. 13:74-8.6, all sums wagered at an off-track wagering facility on a race transmitted by an out-of-State sending track, and all sums wagered through account wagering on a race transmitted by an out-of-State host track, shall be included within the comparable out-of-State sending tracks pari-mutuel pool, and the types of wagering, takeout, distribution of winnings, rules for pari-mutuel ticket refunds, rules of racing and percentage of deposits remaining undistributed from pari-mutuel pools after payment is made to winning ticket holders shall be determined in accordance with the law or policy applicable to the out-of-State sending track or out-of-State host track as appropriate.

13:74-8.6 Formation of interstate common pool

(a) With the prior approval of the Commission, and the concurrence of the out-of-State sending track as to off-track wagering or out-of-State host track as to account wagering, an off-track wagering licensee or the account wagering licensee and receiving tracks or entities in states other than the state where the out-of-State sending track or out-of-State host track is located, may form an interstate common pool.

(b) With respect to a Commission approved interstate common pool, the Commission may approve types of wagering, takeout, distribution of winnings, rules for pari-mutuel ticket refunds, rules of racing, method of calculating breakage, and a percentage of deposits remaining undistributed from a pari-mutuel pool after payment is made to winning ticket holders which are different from those which would otherwise be applied in this State but which are consistent for all parties to the interstate common pool.

13:74-8.7 Agreements with sending tracks

(a) Agreements between the off-track wagering licensee and a sending track, or between the account wagering licensee and a host track upon which account wagers are to be taken, shall be in writing and shall be filed with the Commission. Nothing contained in this section shall preclude such an agreement from being incorporated into or being part of another agreement, including an agreement between a permit holder and a sending track concerning simulcasting or other matters.

(b) Every agreement between an off-track wagering licensee and a sending track, or between the account wagering licensee and a host track upon which account wagers are to be taken shall, in a manner consistent with the provisions of the Act and this chapter, define and provide for the distribution of outstanding pari-mutuel tickets, and define and provide for the allocation of losses in the event of a minus pari-mutuel pool. Every such agreement shall also provide for manual merging in the event of a systems or communications failure and shall further set forth a procedure, acceptable to the Commission, which shall be followed in the event that the manual merging procedure is not followed.

SUBCHAPTER 9. MINIMUM STANDARDS FOR HUB FACILITY

13:74-9.1 Presence of supervisor of mutuels at hub facility

(a) A Supervisor of Mutuels shall be present at the hub facility, or at each hub facility if approval is obtained by the account wagering licensee or off-track wagering licensee pursuant to N.J.A.C. 13:74-8.1(b) to use separate hub facilities, at all times when off-track wagering or account wagering is being conducted. The Supervisor of Mutuels shall be an employee of the Commission whose compensation shall be reimbursed to the Commission by the operator of the hub facility, whose duties shall be to insure that the hub facility acts in compliance with the Act, this chapter, and as set forth in N.J.A.C. 13:70-29.1, 13:71-27 and 13:72-9.2 as appropriate.

(b) Nothing contained in this section shall, with Commission approval and subject to compliance with all regulatory requirements, preclude the account wagering licensee or off-track wagering licensee from utilizing an existing hub facility in this State, as established pursuant to Commission rules appearing within N.J.A.C. 13:70, 13:71 and 13:72. In determining whether to approve the use of an existing hub facility for such purpose, the Commission shall consider the technological ability of the existing hub facility to perform such additional functions, the ability of the existing hub facility personnel to perform such additional functions, and the ability of the existing Commission Supervisor of Mutuels to perform his or her regulatory duties.

(c) The Commission, its employees and agents shall at all times have access to the hub facility in order to maintain the integrity of off-track wagering and account wagering, and to effectuate the purposes of the Act and this chapter.

13:74-9.2 Internal control procedures of hub facility

The operator of a hub facility shall submit for the Commission's approval internal control procedures as defined in N.J.A.C. 13:74-1.1.

13:74-9.3 Testing of equipment and software

Unless an emergency situation exists in which case verbal notice to the Executive Director or designee shall be acceptable, the operator of the hub facility shall provide written notice to the Commission of any new equipment or software, or change in equipment or software, to be utilized at or by the hub facility in connection with off-track wagering or the account wagering system. The writing shall set forth what testing has been accomplished with regard to the new equipment or software, change in equipment or software, and the results of the testing, to insure the integrity of off-track wagering, account wagering and the related proceeds. The Commission, before implementation of such equipment or software by the operator of the hub facility, may require such additional testing as it determines appropriate.

13:74-9.4 Mechanical breakdowns

(a) In the event of an irreparable breakdown of the totalisator during the wagering on a race, all pari-mutuel and self-service pari-mutuel machines, and account wagering equipment, the wagering on that race shall be declared closed and, unless otherwise ordered by the Commission, the pay-off for that race shall be computed on the sums wagered in each pari-mutuel pool at the time of the breakdown. However, where any such breakdown is partial and does not impact each method by which wagers may be placed and the integrity of the ability to otherwise accept wagers, wagering may by the method or methods not impacted by the irreparable breakdown continue. For example, in the event the account wagering equipment is the subject of an irreparable breakdown during the wagering on a race and no additional wagers on that race may be taken through the account wagering system, wagers may still be taken on the race by other wagering methods which might include wagering by cash payment at an off-track wagering facility.

(b) In the event of a totalisator malfunction requiring the operator of the totalisator equipment to purchase any non-issued ticket or the equivalent, the operator of the totalisator equipment may be permitted to credit losing tickets so purchased to the extent of winning tickets similarly purchased. The proceeds of such winning tickets which exceed any credit for losing tickets shall be paid to the Commission and distributed as outstanding pari-mutuel ticket monies as set forth in the Act.

13:74-9.5 Overpays caused by totalisator or failure

Overpays caused by totalisator error or failure shall be borne by the vendor operator of the totalisator equipment causing or responsible for the error.

13:74-9.6 Transmission failure

In the event of failure to transmit pari-mutuel information to a sending track in connection with off-track wagering or to a host track in connection with account wagering, no further wagers shall be accepted at an off-track wagering facility or through the account wagering system on the sending or host track(s) until and unless the failure has been corrected. The off-track wagering licensee, account wagering licensee, hub facility and sending or host track(s) shall attempt to manually merge any wagers which have already been accepted but which have not been transmitted due to the failure. Notice of this procedure and any backup procedure established in accordance with N.J.A.C. 13:74-8.7(b) shall be posted in a prominent location in the off-track wagering facility, and such information shall be provided to account holders consistent with N.J.A.C. 13:74-7.12(b).

SUBCHAPTER 10. ASSESSMENT FORMULAS FOR RACING COSTS AND FOR THE PREVENTION, EDUCATION AND TREATMENT PROGRAMS FOR THE BENEFIT OF COMPULSUVE GAMBLING

13:74-10.1 Racing costs assessment formula

(a) The State Treasurer shall certify racing costs annually. The Commission shall submit to the State Treasurer all information pertinent to the certification for the related state fiscal year. Subject to the approval of the State Treasurer, the Racing Commission may adjust the annual assessment amount established pursuant to (b) below to cover costs not anticipated at the time of the certification.

(b) Racing costs shall be reimbursed to the Commission in the following order:

1) All license, permit and application filing fees collected by the Commission including those derived in connection with live thoroughbred racing, live harness racing, simulcasting at permitted racetrack facilities, casino simulcasting, account wagering and off-track wagering;

2) All breakage monies and outstanding ticket monies resulting from wagering at any off-track wagering facility or through account wagering on races conducted by an in-State track, and all breakage monies and outstanding ticket monies resulting from wagering at any off-track wagering facility or through account wagering on races conducted by an out-of-state track in excess of $300,000 annually, which $300,000 is to be devoted to the purposes set forth in Act;

3) The outstanding pari-mutuel ticket monies due the Racing Commission pursuant to N.J.S.A. 5:5-64a.1 and 5:10-7g(1), comprising 50 percent of the total proceeds of outstanding ticket monies derived from all wagering on live running and live harness races at permitted racetrack facilities in this State;

(c) Where the items in (b) above are not sufficient to reimburse the Racing Commission for racing costs in any State fiscal year, the permit holders and successors in interest shall be assessed for the balance of racing costs not otherwise appropriated to the Commission by law in accordance with the following formula:

1. The dollar amount of the balance shall be divided by the greater of the number of race dates allocated to or actually raced by New Jersey permit holders and successors in interest during the assessment period;

2. The figure derived by performing the calculation in (c)1 above shall be multiplied by the greater of the number of race days allocated to or actually raced by each permit holder or successor in interest;

3. The figure derived by performing the calculation in (c)2 above, as to each permit holder or successor in interest which conducted live racing, shall be reduced by 40 percent each. Subject to any additional amount due, as a result of the application of the calculation in (c)4 above, this figure shall comprise the total amount due for racing costs by each permit holder or successor in interest offering live racing.

4. The cumulative dollar amount derived by performing the 40 percent percentage reduction calculation in (c)3 above shall be allocated for payment amongst each permit holder or successor in interest, the permit holder or successor in interest which holds the account wagering licensee or the off-track wagering licensee, on the following basis:

i) Twenty percent of the total shall be paid on an equal basis by each permit holder who offers live racing but is not subject to the minimum live race date requirements of the Act;

ii) Twenty-five percent shall be paid by the permit holder or successor in interest which holds the off-track wagering licensee, commencing with the opening of the first Commission approved account wagering facility in this State, and the off-track wagering licensee shall not be precluded from obtaining reimbursement for any or all of such costs from other parties to the participation agreement related to off-track wagering; and

iii) Any remaining balance shall be paid by the permit holder or successor in interest that holds the account wagering licensee, which shall not be precluded from obtaining reimbursement for any or all of such costs from other parties to the participation agreement related to account wagering; and

5. Such assessment shall be approved by the State Treasurer.

(d) The Commission shall issue a written invoice to a designated representative of each permit holder or successor in interest, the account wagering licensee, or the off track wagering licensee as appropriate who is responsible for the payment of racing costs pursuant to (b) or (c) above. If the State Treasurer does not certify racing costs within 30 days of submission of information by the Commission under (a) above, the Commission may issue an interim invoice based on the information submitted. The amount of the invoice or interim invoice shall be paid to the Commission within 21 days of issuance. The Commission shall make a refund or additional assessment, if required, in accordance with the certification by the State Treasurer. Upon receipt of the funds subject to any invoice for racing costs, the Commission shall cause such funds to be deposited into a non-lapsing dedicated account to be used for racing purposes.

13:74-10.2 Assessment formula for costs related to prevention, education and treatment programs for the benefit of compulsive gambling Beginning on July 1, 2003, the Commission by written invoice and on an annual basis shall assess each permit holder, or successor in interest to each permit holder if applicable, on an equal basis a total sum of $200,000 in the aggregate. Each permit holder or successor in interest shall make the required payment within 15 days of the date of the issuance of the invoice by the Commission. The Commission shall cause or direct that the related funds be paid into the General Treasury, no later than August 1 of year of the assessment, for appropriation by the legislature to the Department of Health and Senior Services for use by that Department within the same fiscal year when collected, for prevention and education and treatment programs for compulsive gambling consistent with the Act.

SUBCHAPTER 11. COMMISSION ACCESS TO AND PRESENCE AT OFF-TRACK WAGERING FACILITIES AND PREMISES WHERE ACCOUNT WAGERING IS CONDUCTED; COMMISSION EMPLOYEE AND APPOINTEE PROHIBITED AFFILIATIONS

13:74-11.1 Unrestricted access of Racing Commission

(a) The Commission, its agents and representatives in furtherance of its regulatory responsibilities shall have unrestricted access to:

1. All off-track wagering facilities; and

2. All premises utilized by the account wagering licensee, it agents or assignees for the purposes of directly or indirectly offering or accepting or processing accounts wagers.

13:74-11.2 Provision of parking space and office space by off-track wagering licensee and account wagering licensee

(a) The off-track wagering licensee shall, in furtherance of the Commission's regulatory responsibilities, provide the Commission with two designated parking spaces, as approved by the Commission, at each off-track wagering facility where employee or patron parking is offered.

(b) The account wagering licensee shall, in furtherance of the Commission's regulatory responsibilities, provide the Commission with two designated parking locations, as approved by the Commission, at the phone bank facility utilized in connection with account wagering, or at each such facility in the event the Commission approves the establishment of more than one phone bank.

(c) The Commission, in its discretion and in furtherance of its regulatory responsibilities, may require, as a condition of licensure, that the off-track wagering licensee provide the Commission with reasonable office space, as approved by the Commission, at no more than four off-track wagering facilities within geographic regions as selected by the Commission.

(d) The Commission, in its discretion and in furtherance of its regulatory responsibilities, may require, as a condition of licensure, that the account wagering licensee provide the Commission with reasonable office space, as approved by the Commission, at each phone bank utilized in connection with account wagering. Nothing contained in this section shall be construed to disallow a phone bank utilized in connection with account wagering from being situated at the same premises as a licensed off-track wagering facility, including at such a facility where the Commission is allocated reasonable office space by the off-track wagering licensee, in which case that combined office space shall be deemed to satisfy any condition imposed on the off-track wagering facility pursuant to (c) above, and any such condition imposed upon the account wagering licensee as to that phone bank pursuant to this subsection.

(e) Nothing contained in this section shall be construed to disallow a phone bank utilized in connection with account wagering from being situated at the same premises as a permitted racetrack premises at which the Commission is allocated reasonable office space by the permit holder, in which case that office space shall be deemed to satisfy any such condition imposed on the account wagering licensee as to that phone bank pursuant to (d) above.

13:74-11.3 Commission employees/appointees; prohibited affiliations

No employee or appointee of the Commission shall provide any services to the account wagering licensee or off-track wagering licensee, including to the account wagering system or any off-track wagering facility, whether or not for compensation where those services are outside the scope of his or her duties on behalf of the Commission.