years ago, immediately after the NY Court of Appeals case.
A00892 Summary:
BILL NO A00892
SAME AS No same as
SPONSOR Pretlow
COSPNSR
MLTSPNSR
Amd S1017, RWB L
Provides for the amount to be paid by off-track betting corporations to
regional harness tracks from out-of-state and out-of-country simulcast revenue.
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A00892 Actions:
BILL NO A00892
01/08/2015 referred to racing and wagering
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A00892 Memo:
BILL NUMBER:A892
TITLE OF BILL:
An act to amend the racing, pari-mutuel wagering and breeding law, in
relation to payments by off track betting corporations to regional
harness tracks for out-of-state and out-of-country simulcasting
revenue
PURPOSE:
To phase out additional payments made by off track betting
corporations conducting simulcast to those regional harness track or
tracks that had previously received additional payments.
SUMMARY OF PROVISIONS:
Section 1: Details dates and percentages of payment phase out.
Calendar year 2009 would retain the traditional two (2) percent
payment of excess handle, Each subsequent year there after would be a
half (5) percentage point reduction in payments. No payment of excess
handle would be made from the beginning of calendar year 2015 onward.
Section 2: Effective date language.
EXISTING LAW:
Currently subdivision 3(b)(3)-(4) of section 1016 requires OTBs to pay
regional harness tracks six (6) percent of the sum retained by the OTB
from wagers accepted on harness races run at out of state tracks, Of
the sum retained by the OTBs, five (5) percent is to be distributed in
the same manner as though such payments were made on the races
conducted at the harness trade In addition, one (1) percent of such
wagers shall be paid to the licensed regional harness track for the
purpose of increasing track purses. In OTB regions where there are
multiple regional harness tracks these payments are made to the
regional track conducting a live meet on the day out-of-state
simulcasting occurs. If either no regional track is conducting a meet,
or more than one regional track is conducting a meet, the distribution
is to be made either (i) in the proportion that each track's handle
bore to the total regional licensed harness track handle during the
preceding calendar month or (ii) in accordance with a contractual
agreement between the regional tracks and the OTB corporation,
Subdivision 2(a) of section 1017-a requires OTBs to make an additional
"maintenance of effort" payment to their regional harness tracks
measured by the level of payments received by the regional harness
tracks during 20 02 from their regional OTB attributable to wagering
on out-of-state harness races run after 6:00 p.m. OTBs engaged in the
simulcasting of out-or-state or out-of-country thoroughbred racing
after 7:30 p.m. are required to submit a payment schedule to be
approved by the State Racing and Wagering Board. In order to be
approved this payment schedule must be identical to the actual
payments and distributions of such payments to tracks and purses made
by such OTBs pursuant to the provisions of section 1015 during the
year of 2002, as derived from out-of-state harness races displayed
after 6:00 p.m. If approved by the board, such scheduled payments
shall be made from revenues derived from any simulcasting under
sections 1016 and 1017-a.
JUSTIFICATION:
Under the current law regional harness tracks that are not running
live racing are receiving maintenance of effort payments
notwithstanding that they are closed. The intent of the 2003
legislation was to provide harness tracks with a "hold harmless"
payment stream to offset the losses anticipated from bettors defecting
from harness racing to wager on the nighttime out-of-state and
out-of-country thoroughbred races. This payment requirement was not
meant to provide a source of revenue to harness tracks not running
live races. Recently, the State Racing and Wagering Board incorrectly
interpreted 1017-a (2)(a) as requiting the maintenance of effort
calculation to be made on a track by track basis in regions with more
than one regional licensed harness track. It was the Board's
interpretation that regional harness tracks could become entitled to
more than the amount they received in 2002 but under no circumstances
could they receive less individually; even if the aggregate level of
payments under section 1016 to all tracks within the region matched,
or exceeded, the total level of payments to all the tracks during
2002. This ruling is inconsistent with the Legislature's intent
expressed in section 1016 that distribution of revenue in multitrack
regions be made based on the proportion of each track's live handle.
Therefore, in a region with two or more regional harness tracks, if
one track is not running the entire section 1016 payment goes to the
track running live racing, but the track not running nonetheless
remains eligible to receive maintenance of effort payments. The
Board's misinterpretation of section 1017-a (2)(a) unfairly requires
OTBs to subsidize those harness tracks not conducting live race
meetings. In addition, the additional payments made pursuant to
section 1017 -a (2)(b) are no longer appropriate. Harness tracks have
been given permission to install Video Lottery Terminals (VLTs). The
success of VLTs has been well documented and these VLT operations have
provided harness tracks with a generous new stream of revenue. VLTs
have brought increased attendance to harness tracks, as well as,
afforded them the opportunity to increase purses. Allowing harness
tracks to install VLTs and at the same time requiring OTBs to make
additional payments if handle exceeds a designated amount is
tantamount to New York State subsidizing these private entities twice.
It needs to be recognized that the exodus of harness bettors for the
new world of nighttime thoroughbred wagering is not as great as was
expected, OTBs have handled well over $100 million in annual wagering
statewide on nighttime thoroughbred racing without significant
detriment to the wagering done on regional harness tracks. In fact
regional harness tracks are themselves authorized to simulcast these
nighttime thoroughbred races and can partake in this new endeavor just
as OTBs can. This legislation does not call for the end of all OTB
payments to regional harness tracks. It simply is a fair
redistribution of the wagering handle to all parties involved that is
in line with the intent of the 2003 legislation when passed. This
legislation is not intended to deprive revenue to those regional
harness tracks running live races. OTBs will continue to contribute
the six (6) percent that is required by subdivisions (3)(c)(3)-(4) of
section 1016. OTBs will continue to pay their fair share to those
regional harness tracks conducting live racing meets. It is merely the
intention of this legislation to end a subsidy to private harness
tracks not running live racing and that are not being adversely
affected in any way from the simulcasting of nighttime thoroughbred
racing by their regional OTBs.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
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A00892 Text:
S T A T E O F N E W Y O R K
________________________________________________________________________
892
2015-2016 Regular Sessions
I N A S S E M B L Y
January 8, 2015
___________
Introduced by M. of A. PRETLOW -- read once and referred to the Commit-
tee on Racing and Wagering
AN ACT to amend the racing, pari-mutuel wagering and breeding law, in
relation to payments by off track betting corporations to regional
harness tracks for out-of-state and out-of-country simulcasting reven-
ue
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Subdivision 2 of section 1017 of the racing, pari-mutuel
2 wagering and breeding law, as amended by chapter 174 of the laws of
3 2013, is amended to read as follows:
4 2. [a. Maintenance of effort. Any off-track betting corporation which
5 engages in accepting wagers on the simulcasts of thoroughbred races from
6 out-of-state or out-of-country as permitted under subdivision one of
7 this section shall submit to the commission, for its approval, a sched-
8 ule of payments to be made in any year or portion thereof, that such
9 off-track corporation engages in nighttime thoroughbred simulcasting. In
10 order to be approved by the commission, the payment schedule shall be
11 identical to the actual payments and distributions of such payments to
12 tracks and purses made by such off-track corporation pursuant to the
13 provisions of section one thousand fifteen of this article during the
14 year two thousand two, as derived from out-of-state harness races
15 displayed after 6:00 P.M. If approved by the commission, such scheduled
16 payments shall be made from revenues derived from any simulcasting
17 conducted pursuant to this section and section one thousand fifteen of
18 this article.
19 b. Additional payments.] PAYMENTS. During each calendar year, to the
20 extent, and at such time in the event, that aggregate statewide wagering
21 handle after 7:30 P.M. on out-of-state and out-of-country thoroughbred
22 races exceeds one hundred million dollars, each off-track betting corpo-
23 ration conducting such simulcasting shall pay to its regional harness
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05469-01-5
A. 892 2
1 track or tracks, an amount equal to [two percent] THE FOLLOWING PERCENT-
2 AGE of its proportionate share of such excess handle: FOR CALENDAR YEARS
3 THROUGH TWO THOUSAND FIFTEEN, TWO PERCENT; FOR CALENDAR YEAR TWO THOU-
4 SAND SIXTEEN, ONE AND ONE-HALF PERCENT; FOR CALENDAR YEAR TWO THOUSAND
5 SEVENTEEN, ONE PERCENT; AND FOR CALENDAR YEAR TWO THOUSAND EIGHTEEN,
6 ONE-HALF OF ONE PERCENT. THERE SHALL BE NO FURTHER ADDITIONAL PAYMENT
7 OBLIGATION PURSUANT TO THIS SUBDIVISION FOR CALENDAR YEARS COMMENCING ON
8 OR AFTER JANUARY FIRST, TWO THOUSAND NINETEEN. In any region where there
9 are two or more regional harness tracks, such [two percent] PAYMENT
10 AMOUNT shall be divided between or among the tracks in a proportion
11 equal to the proportion of handle on live harness races conducted at
12 such tracks during the preceding calendar year. Fifty percent of the sum
13 received by each track pursuant to this [paragraph] SUBDIVISION shall be
14 used exclusively for increasing purses, stakes and prizes at that
15 regional harness track. For the purpose of determining whether such
16 aggregate statewide handle exceeds one hundred million dollars, all
17 wagering on such thoroughbred races accepted by licensed multi-jurisdic-
18 tional account wagering providers from customers within New York state
19 shall be excluded.
20 S 2. This act shall take effect immediately.
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