(a) Requirements.--The following shall apply to a secondary pari-mutuel organization:
(1) A secondary pari-mutuel organization offering and accepting pari-mutuel wagers within this Commonwealth must be properly licensed by the commission. Each secondary pari-mutuel organization employee directly or indirectly responsible for the acceptance of wagers on horse races or the transmittal of wagering information to and from the Commonwealth must be properly licensed.
(2) A secondary pari-mutuel organization must comply with each rule and regulation of the commission.
(3) As a condition of licensing and annual license renewal, a license application of a secondary pari-mutuel organization must include all of the following:
(i) Disclosure of each officer, director, partner and share holder with a 5% or greater share of ownership or beneficial interest.
(ii) A list of personnel assigned to work in this Commonwealth.
(iii) Certification of compliance with totalisator standards and licensing requirements adopted by the commission.
(iv) A type II SAS 70 report, or other independent report in a form acceptable to the commission, completed within the preceding 12 months, to assure adequate financial controls are in place in the secondary pari-mutuel organization.
(v) An agreement to allow the commission to inspect and monitor each facility used by the secondary pari-mutuel organization for accepting, recording or processing pari-mutuel wagers accepted in this Commonwealth.
(vi) Certification of the use of a pari-mutuel system which meets all requirements for a pari-mutuel system utilized by a licensed racing entity in this Commonwealth.
(4) Fitness and experience of a secondary pari-mutuel organization must be consistent with the public interest, convenience and necessity and the best interests of racing generally, including, but not limited to, all of the following:
(i) Meeting general industry standards for business and financial practices, procedures and controls.
(ii) Possession of a wagering system that ensures that all wagering information is transmitted to and calculated in the appropriate host track pool.
(iii) Utilization of a totalisator system that meets wagering-industry standards and certification criteria.
(iv) Meeting general industry standards for physical security of computerized wagering systems, business records, facilities and patrons.
(v) Having no indications of improper manipulation of a secondary pari-mutuel organization's wagering system, including software.
(vi) Having policies and procedures that ensure a secondary pari-mutuel organization's key individuals have applied and are eligible for all required occupational licenses.
(vii) Having an annual independent audit with no audit opinion qualifications that reflect adversely on integrity.
(viii) Having a system that verifies the identity of each person placing a wager and requires the person placing a wager to disclose each beneficial interest in a wager the secondary pari-mutuel organization accepts.
(ix) Having a real-time independent monitoring system to monitor wagering activity to detect suspicious patterns, including any that might indicate criminal activity or regulatory violations. The system must verify each transaction performed by the totalisator system and provide expeditious notice of any discrepancies or suspicious activity to the host track, wagering site, due diligence investigating body and any affected regulatory agency.
(x) Having a satisfactory record of customer relations, including no excessive unresolved patron complaints concerning the secondary pari-mutuel organization's business practices.
(xi) Holding required permits, licenses, certifications or similar documents that may be required by a racing, gaming or other pari-mutuel wagering jurisdiction.
(xii) Having sufficient measures to protect customer funds.
(xiii) Publicizing and providing a sufficient program for customer self-exclusion and wagering limitation.
(xiv) Having expertise in pari-mutuel wagering and being technologically capable of participating in simulcast and wagering activities.
(5) Financial responsibility of a secondary pari-mutuel organization must be consistent with the public interest, convenience and necessity and the best interests of racing generally, including all of the following:
(i) The secondary pari-mutuel organization and the secondary pari-mutuel organization's key individuals may not be in default or have a history of defaulting in the payment of a financial obligation, including the payment of taxes due to a taxing jurisdiction or on the payment of gaming, wagering or pari-mutuel racing-related financial obligations. A secondary pari-mutuel organization's key individuals may not be four or more months in arrears for child support that is ordered or approved by a court in any jurisdiction within the United States.
(ii) The secondary pari-mutuel organization and the secondary pari-mutuel organization's owners and sources of funds must have sufficient financial means to participate in simulcast and wagering activities, including sufficient assets and means to pay industry-related debts and obligations and to fund the operations of the secondary pari-mutuel organization.
(6) The secondary pari-mutuel organization must be fully cooperative and act in good faith with all disclosure and other duties involved in a due diligence investigation, voluntarily submit to regulatory and investigating body oversight, permit inspection of each business record upon request by a regulatory authority or investigating body, promptly honor regulatory or investigating body requests for wagering patterns or other information and, after reasonable notice, permit full access to each facility and property by a regulatory authority or investigating body.
(b) Waiver.--
(1) A due diligence investigation may rely on an investigation and oversight conducted by a commission-approved entity.
(2) The commission may not consent to the acceptance of an interstate off-track wager by a secondary pari-mutuel organization that has not been determined to be suitable under this section.