STATE-CONDUCTED SWEEPSTAKES.

SEC. 813. STATE-CONDUCTED SWEEPSTAKES. (a) Section 4402 (relating to exemptions from the tax on wagers) is amended by striking out “and” at the end of paragraph (1), by striking out the period at the end of paragraph (2) and inserting or”, and by adding at the end thereof the following new paragraph: “(3) State-conducted sweepstakes.— On any wager placed in a sweepstakes, wagering pool, or lottery— “(A) which is conducted by an agency of a State acting under authority of State law, and “(B) the ultimate winners in which are determined by the results of a horse race, but only if such wager is placed with the State agency conducting such sweepstakes, wagering pool, or lottery, or with its authorized employees or agents.” (b) The amendment made by subsection (a) shall apply with respect to wagers placed after March 10, 1964.