Senate Bill 5563 amends multiple sections of chapter 67.16 RCW governing horse racing in Washington. It modifies existing law rather than creating an entirely new statutory scheme, reenacting and changing provisions on licensing, fees, distributions, simulcasting, satellite wagering, and commission governance; text for several listed sections is not included in the extracted material. Major fiscal and procedural changes in the visible text include a required additional one percent withholding from gross receipts of parimutuel machines to fund a Washington bred owners' bonus fund and breeder awards account, with an exception for nonprofit race meets of ten days or less that have an average daily handle under $120,000. Licensees with more than $20 million in prior-year in-state parimutuel gross receipts must withhold 1.30% daily; those with $20 million or less must withhold 1.8% daily. Nonprofit meets of ten days or less are exempt from a parimutuel tax and may retain 15% of daily gross receipts; other licensees may retain up to 15%, and race meets may retain an additional 6% from exotic wagers, one-sixth of which must be paid to the commission for the Washington bred fund. The commission must promulgate an equitable distribution formula for the additional one percent and may distribute interest and funds to nonprofit short independent meets, with caps and reversion rules (for example, distributions up to $30,000 per race day and funds over $180,000 reverting to the operating account in certain circumstances). The bill also amends rules for simulcasting and satellite wagering, including class 1 racing association eligibility, limits on the number and proximity of satellite locations, mandatory pooling of satellite parimutuel pools with the racing facility, and fee and distribution formulas for simulcast signals (including a 5.5% in-state track-to-track receiving fee and requirements that specified shares be paid to horsemen's/women's purse accounts after allowable deductions). The text affirms it does not establish new or expanded gaming beyond prior authorizations, requires informational signage for simulcasting with a toll-free problem gambling number, allows handicapping contests with commission approval, and sets conflict-of-interest and employment restrictions (commissioners may not wager on live races conducted in Washington, may not be racetrack employees, serve six-year terms, and must post a $5,000 surety bond). Several provisions and entire amended sections listed in the bill header are not included in the extracted facts, and a portion of RCW 67.16.105 is cut off mid-sentence. Definitions and full operative language for some referenced terms and subsections are missing from the extract, so precise scope and any additional changes in the omitted sections cannot be stated here.

If enacted, race meet operators will face new and changed money flows: most licensees must withhold an extra one percent of parimutuel machine gross receipts to fund bonuses for Washington‑bred horses (with very small nonprofit meets exempt), and large operators will remit either 1.30% or 1.8% of daily gross receipts to the commission based on prior‑year machine handle. Nonprofit short meets (ten days or less) keep special tax treatment and may retain 15% of daily gross receipts and are eligible for interest distributions from the Washington‑bred fund to pay for purses and track/upgrades; exotic wagers allow meets to retain an extra 6% daily of exotic receipts, with one‑sixth of that amount funneled to the bred owners’ bonus account. Class 1 tracks get clearer options and limits for satellite wagering and simulcasting (including distance limits, a 5.5% in‑state track‑to‑track fee, and requirements that at least half of certain fees after costs go to purse accounts), and licensees must continue meeting live‑race minimums and pay a $500 per live race day license fee payable in advance. The horse racing commission gains more dedicated receipts and a state treasury operating account, new spending authority (up to $500,000 per year for industry development, facility upgrades, and equine health research with priority for nonprofit meets), and stricter conflict and conduct rules for commissioners and staff; it must also adopt distribution formulas and manage grant payouts of unspent funds to equestrian nonprofits or transfer excess to the fair fund. Some implementation details and several amended sections are missing from the provided text (for example the rest of the subsection on refunds/other distributions and the full language of several amended RCWs), so the exact mechanics of the commission’s distribution formulas and some thresholds remain unclear.