(1) The source market fee generated from wagers on a class 1 racing association's live races will be distributed to the class 1 racing association conducting that meet after deducting contributions to the commission, one percent owners bonus, breeders awards, and class C purse fund per WAC 260-49-070. The remaining source market fee from the class 1 racing association's live meet shall be distributed in accordance with the agreement between the class 1 racing association and the recognized horsemen's association.

(2) The source market fee generated from races conducted outside Washington shall be allocated proportionate to the gross amount of all sources of parimutuel wagering during each twelve-month period derived from the associations' live race meets after deducting contributions to the commission, one percent owners' bonus, and breeders awards. The remaining proportional share of the source market fee from races conducted outside Washington shall be distributed in accordance with the agreement between the class 1 racing association and the recognized horsemen's association. "All sources of parimutuel wagering" shall mean the total of in-state and out-of-state wagering on the associations' live race meet. This percentage must be calculated annually. The commission shall calculate the proportion of the source market fee for each class 1 racing association based upon the preceding calendar year. The commission shall inform the authorized advance deposit wagering service provider(s) of the percentage of source market fee to be distributed to each class 1 racing association. The authorized advance deposit wagering service provider(s) shall distribute the source market fee to the class 1 racing associations according to the percentages established by the commission.

(3) A class 1 racing association is not entitled to source market fees until it has completed one race meet in accordance with the requirements of RCW 67.16.200.

(4) A class 1 racing association must complete a live race meet in accordance with RCW 67.16.200 within each succeeding twelve-month period to maintain eligibility to continue participating in advance deposit wagering and to receive a proportionate share of the source market fee.