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Matter of Suffolk Regional Off-Track Betting Corp. v New York State Racing & Wagering Bd.
Annotate this Case
Matter of Suffolk Regional Off-Track Betting Corp. v New York State
Racing & Wagering Bd. 2008 NY Slip Op 09855 [11 NY3d 559] December
17, 2008 Kaye, Ch.J. Court of Appeals Published by New York State Law
Reporting Bureau pursuant to Judiciary Law § 431. As corrected through
Wednesday, February 11, 2009
[*1] In the Matter of Suffolk Regional Off-Track Betting Corporation, Appellant-Respondent,
v
New York State Racing and Wagering Board et al., Respondents-Appellants. (And Four Other Related Proceedings.)
Argued November 19, 2008; decided December 17, 2008
Matter of Suffolk Regional Off-Track Betting Corp. v New York State Racing & Wagering Bd., 47 AD3d 133, modified.
{**11 NY3d at 564} OPINION OF THE COURT
Chief Judge Kaye.
At the core of this litigationwith the Off-Track Betting Corporations
(OTBs) on one side, and the State Racing and Wagering Board and state
harness racing tracks on the other sideare questions of statutory
interpretation. We begin with a brief history of the relevant sections
of the Racing, Pari-Mutuel Wagering and Breeding Law and the present
controversy.
Prior to 1970, New York permitted wagering on horse racing only at its
thoroughbred and harness tracks, leaving (as{**11 NY3d at 565} Supreme
Court observed) "a lucrative and illegal [*2]niche for local bookies,
who took bets from those individuals who wished to gamble on horse
racing but who were unable or unwilling to travel to the race track to
place their wagers." When off-track betting was thereafter authorized,
its popularity depleted attendance at the tracks and threatened their
viability. To redress the situation, the Legislature in 1973 created
seven regional OTBs[FN1] to administer off-track wagering and required
them to pay a "state tax," a portion of which went to the regional
harness tracks and nonprofit racing associations (L 1973, ch 346, § 4,
as amended). The intention of the Legislature was: "to derive from such
betting . . . a reasonable revenue for the support of government, and to
prevent and curb unlawful bookmaking and illegal wagering on horse
races. It is also the intention of this article to ensure that off-track
betting is conducted in a manner compatible with the well-being of the
horse racing and breeding industries in this state, which industries are
and should continue to be major sources of revenue to state and local
government and sources of employment for thousands of state residents."
(Racing, Pari-Mutuel Wagering and Breeding Law § 518.)
In 1984, the Legislature authorized the simulcasting, or telecasting, of
horse races conducted in the state for the purposes of pari-mutuel
wagering (Racing, Pari-Mutuel Wagering and Breeding Law § 1001 [a]).
That again was a perceived threat to the financial stability of the
regional harness tracks, leading to new legislation requiring OTBs to
pay them commissions on the simulcast wagers placed at OTB facilities.
Between 1984 and 2003, simulcasting of thoroughbred races was prohibited
between 7:30 p.m. and midnightevenings were traditionally reserved for
harness racing. In 2003, however, the Legislature allowed simulcast
licensees to broadcast, and accept bets on, thoroughbred races conducted
after 7:30 p.m. from anywhere in the world. Again perceiving an adverse
impact on nighttime harness racing, the Legislature provided for
"maintenance of effort" payments, requiring OTBs that simulcast
nighttime thoroughbred racing, every year after 2002, to guarantee to
their regional harness tracks minimum payments based upon{**11 NY3d at
566} the commissions those tracks received before the nighttime
thoroughbred simulcasts were permitted.
That requirement engendered two of the statutory questions now before
us: first, can the OTBs credit commissions derived from daytime harness
racing against the maintenance of effort payments and second, are those
payments to be made on a regional, or track-by-track, basis.
The third statutory issue before us involves so-called "dark day"
payments. "Dark days" occur when the State Racing Association is not
conducting a thoroughbred race meeting, and no licensed harness track is
accepting wagers on or displaying the signal of any thoroughbred
[*3]track. On dark days, simulcast licensees can broadcast out-of-state
thoroughbred races, but they must make payments to the harness tracks
(which are not open for business that day) in accordance with a
statutory formula (Racing, Pari-Mutuel Wagering and Breeding Law §
1017).[FN2] From 1997 through 2003, all OTBs made dark day payments to
their respective regional harness tracks, but in 2004 New York City OTB
(NYC OTB) stopped payment on the ground that the statute required the
tracks, not OTBs, to make such payments to one another.
Seeking clarification on maintenance of effort and dark day payments,
the OTBs brought their claims to the State Racing and Wagering Board,
which in February 2005 rejected their arguments. The Board concluded
that OTBs cannot credit commissions derived from daytime harness racing
against the maintenance of effort payment; that Racing, Pari-Mutuel
Wagering and Breeding Law § 1017-a required calculation of the
maintenance of effort payment on a track-by-track (not regional) basis;
and that Racing, Pari-Mutuel Wagering and Breeding Law § 1017 required
OTBs to make dark day payments to their respective regional harness
tracks. Five of the State's six regional OTBs (Western did not join)
brought CPLR article 78 proceedings challenging the Board's
determinations. After consolidating the proceedings, Supreme Court
dismissed the petitions, including a new claim that the Board's
determinations were rules not properly promulgated under the State
Administrative Procedure Act. On appeal, the Appellate Division modified
Supreme Court's dismissal: while affirming the separate payment{**11
NY3d at 567} distribution and State Administrative Procedure Act
determinations, the court reversed on the maintenance of effort and dark
day payments issues (47 AD3d 133 [2007]). The Board and the harness
tracks moved for leave to appeal, the OTBs cross-moved, and we granted
leave to appeal to all parties (10 NY3d 706 [2008]). We now conclude
that the Board and harness tracks, not the OTBs, were correct in their
reading of the relevant statutory sections. Analysis
Given the growth in codification of the law over recent decades, the
principles governing the Court's statutory review have by now been
extensively articulated. First and foremost, it is our role to implement
the intent of the Legislature (Matter of DaimlerChrysler Corp. v
Spitzer, 7 NY3d 653, 660 [2006]). Deference to administrative agencies
charged with enforcing a statute is not required when an issue is one of
pure statutory analysis (Matter of Astoria Gas Turbine Power, LLC v Tax
Commn. of City of N.Y., 7 NY3d 451, 455 [2006]). Even if no deference
is owed to an agency's reading of a statute, a court can nevertheless
defer to an agency's definition of a term of art contained within a
statute (Matter of Trump-Equitable [*4]Fifth Ave. Co. v Gliedman, 57
NY2d 588, 595 [1982]). Against this backdrop, we turn to the specific
issues in controversy.
Maintenance of Effort Payments. Starting in May 2003, when OTBs were
permitted to accept wagers on simulcast nighttime out-of-state
thoroughbred races, Racing, Pari-Mutuel Wagering and Breeding Law §
1017-a (2) (a) required them to make maintenance of effort payments to
their regional harness tracks, to hold the tracks harmless from the new
competition.
Section 1017-a (2) (a) provides: "Any off track betting corporation
which engages in accepting wagers on the simulcasts of thoroughbred
races from out-of-state or out-of-country as permitted under subdivision
one of this section shall submit to the board, for its approval, a
schedule of payments to be made in any year or portion thereof, that
such off track corporation engages in nighttime thoroughbred
simulcasting. In order to be approved by the board, the payment schedule
shall be identical to the actual payments and distributions of such
payments to tracks and purses made by such off{**11 NY3d at 568} track
corporation pursuant to the provisions of section [1016] of this article
during the year [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
conducted pursuant to this section and section [1016] of this article."
The apparent tension between the final two sentences of this subdivision
gives rise to the present dispute. The Board and the tracks rely on the
penultimate sentence in urging that OTBs cannot credit commissions from
daytime harness racing against their maintenance of effort payments,
and that payment must be identical to actual payments during 2002 as
derived from out-of-state harness races displayed after 6:00 p.m. The
OTBs, in urging that they can credit commissions from daytime racing,
rely on the last sentence, directing that scheduled payments be made
from revenues derived from any simulcasting conducted pursuant to this
section and section 1016 of this article.
Here, the trial court and Appellate Division understandably divided,
each pointing to the plain language of the statute.[FN3] Reading the
provision as a whole, however, and taking into account the Legislature's
purpose in requiring maintenance of effort payments, we conclude that
the correct interpretation of this less-than-perfectly-clear subdivision
is that given by the trial court. [*5]
The penultimate sentence establishes the baseline, or minimum, amounts
that OTBs must pay to harness tracks for the privilege of simulcasting
evening thoroughbred racing: at least the same level of payments
received in 2002 from evening simulcasting. The final sentence must then
be read to concern only the total pool of dollars from which the
mandated amounts can be paid. The amount of daytime harness racing
commissions OTBs pay to a harness track is irrelevant to determine
whether the OTB met its promised nighttime revenues threshold; allowing
OTBs to credit daytime harness racing commissions against the mandated
maintenance of effort payments would satisfy neither the words nor the
objective of the statute.
"Separate Payment" Distribution. The OTBs urge that the maintenance of
effort payments are to be made on a regional,{**11 NY3d at 569} rather
than track-by-track, basis. They argue that Racing, Pari-Mutuel Wagering
and Breeding Law § 1017-a (2) (a) incorporates the payment scheme of
section 1016, which distributes commissions from harness racing
simulcasting on a regional basis. The Board and the tracks, by contrast,
contend that the maintenance of effort payment should be on a
track-by-track basis because section 1017-a requires that the payment be
"identical to the actual payments and distributions of such payments to
tracks and purses made by such off track corporation" (emphasis
supplied).
We agree with the Board and the tracks that the plain text requires that
the maintenance of effort payments be distributed on a track-by-track
basis. As the Appellate Division noted, had the Legislature intended
that the maintenance of effort payment be made on a regional basis, it
could have used the same language as that used in the very next
paragraph: "During each calendar year, to the extent, and at such time
in the event, that aggregate statewide wagering handle after 7:30 P.M.
on out-of-state and out-of-country thoroughbred races exceeds
[$100,000,000], each off track betting corporation conducting such
simulcasting shall pay to its regional harness track or tracks, an
amount equal to [2%] of its proportionate share of such excess handle.
In any region where there are two or more regional harness tracks, such
[2%] shall be divided between or among the tracks in a proportion equal
to the proportion of handle on live harness races conducted at such
tracks during the preceding calendar year" (Racing, Pari-Mutuel Wagering
and Breeding Law § 1017-a [2] [b]).
Track-by-track payments thus are required by the explicit language of
the statute. That conclusion is underscored by the contrasting language
of the immediately ensuing paragraph and indeed by the very purpose of
the statuteto hold each track harmless from the potentially negative
impact of permitting OTBs to simulcast nighttime out-of-state
thoroughbred races.
Dark Day Payments. As the foregoing discussion demonstrates, the Racing,
Pari-Mutuel Wagering and Breeding Law remains "an imbroglio, being born
out of the union of diverse racing industry interests and legislative
compromise" (Finger Lakes Racing Assn. v New York State Racing &
Wagering Bd., 45 NY2d 471, 476 [1978]). That observation is nowhere
more{**11 NY3d at 570} evident than in Racing, Pari-Mutuel Wagering and
Breeding Law § 1017, which governs distribution of wagers placed on dark
days at facilities that simulcast out-of-state races. [*6]
Section 1017 itself contains one subdivision, two paragraphs, six
subparagraphs, 22 clauses, six subclauses, and six tables listing
percentages due for state payments (with varying percentages depending
on the type of bet, race and facility). Racing, Pari-Mutuel Wagering and
Breeding Law § 1017 (1) (b) (5) (E) and (6) (F) provide in relevant
part: "On days when a non-profit racing association is not conducting a
race meeting and when a licensed harness track is neither accepting
wagers nor displaying the signal from an in-state thoroughbred
corporation or association or an out-of-state thoroughbred track: "(i)
Such licensed regional harness track shall receive in lieu of any other
payments on wagers placed at off-track betting facilities outside the
special betting district on races conducted by an in-state thoroughbred
racing corporation, two and eight-tenths percent on regular and multiple
bets during a regional meeting and one and nine-tenths percent of such
bets if there is no regional meeting and four and eight-tenths percent
on exotic bets on days on which there is a regional meeting and three
and four-tenths percent of such bets if there is no regional meeting.
"(ii) Such licensed regional harness track shall receive one and
one-half per centum on total regional handle on races conducted at
out-of-state or out-of-country thoroughbred tracks."
From 1997 through 2003, without apparent problem, OTBs made payments to
tracks in their region that did not open for business on dark days. Then
in 2004, NYC OTB stopped making such payments. It claimed that the
headings of section 1017 (1) (b) (5) and (6) required dark day payments
only of "facilities licensed in accordance with section [1007] of this
article," and OTBs do not operate facilities under section 1007. Racing,
Pari-Mutuel Wagering and Breeding Law § 1007 indeed does provide for
simulcast licenses from track to track, not off-track branch offices or
simulcast theaters.
Those headings, however, stand in marked contrast to the headings of
section 1017 (1) (b) (3) and (4) that govern the distribution{**11 NY3d
at 571} of wagers placed at "facilities licensed in accordance with
sections [1008] and [1009]"meaning OTB branch offices and simulcast
theaters. According to the OTBs, the statutory headers of subparagraphs
(5) and (6) dictate that the tracks must simply pay one another. The
Board and tracks claim that the body of the text, not the statutory
headings, determines the meaning. Again, we agree with the Board and the
tracks because the text's unambiguous language requires OTBs to make
the dark day payments, as they apparently also believed for several
years.
While a statute's heading may help in ascertaining the intent of an
otherwise ambiguous statute, a heading cannot trump the clear language
of the statute (see McKinney's Cons Laws of NY, Book 1, Statutes § 123
[b]). Here, section 1017 specifies that dark day payments are a
percentage of "total regional handle"a term of art which the Board
explained is used in [*7]the Racing, Pari-Mutuel Wagering and Breeding
Law in relation to the concept of payments by off-track betting
corporations to tracks; harness tracks do not have regions but rather
are located for defined purposes within established off-track betting
regions. Under the OTBs' reading, if a region has only one track and it
remains closed on the dark day, it will not receive any commissions
because only tracks can contribute to regional handle. We conclude that,
applying the Board's definition of regional handle (meaning an OTB's
commissions), the statute makes sense: if a track remains closed on a
dark day, then it will receive 1.5% of the total regional handle made by
the OTB.
Additionally, the statute directs "off-track betting facilities"a term
used elsewhere in the Racing, Pari-Mutuel Wagering and Breeding Law to
apply only to OTBs (see Racing, Pari-Mutuel Wagering and Breeding Law §
520 [1]; § 532 [1], [3-a]; § 901 [2] [b]; § 907 [1] [e]; § 1016 [3]
[b])to make dark day payments to regional harness tracks. Finally, the
purpose of dark day payments is to compensate harness tracks when the
OTBscompetitors to harness trackssimulcast out-of-state thoroughbred
races. Requiring OTBs to pay the 1.5% of regional handle to harness
tracks in their region that remain closed on the dark day implements
that statutory purpose.
State Administrative Procedure Act. The State Constitution, as well as
the State Administrative Procedure Act, mandates the procedures that
must be followed for promulgation of rules and regulations. Excluded
from these requirements are "interpretive statements and statements of
general policy which in{**11 NY3d at 572} themselves have no legal
effect but are merely explanatory" (State Administrative Procedure Act §
102 [2] [b] [iv]). A rule or regulation, by contrast, is "a fixed,
general principle to be applied by an administrative agency without
regard to other facts and circumstances relevant to the regulatory
scheme of the statute it administers" (Matter of Roman Catholic Diocese
of Albany v New York State Dept. of Health, 66 NY2d 948, 951 [1985]).
The OTBs argue that the Board's maintenance of effort, separate payment
distribution and dark day payment determinations were fixed, general
principles to be applied without regard to other facts and circumstances
relevant to the regulatory scheme of the Racing, Pari-Mutuel Wagering
and Breeding Law by imposing financial obligations upon the OTBs. We
agree with both Supreme Court and the Appellate Division that the Board
here promulgated no rules or regulations, but rather interpreted the
requirements of the statutes in issue, which we have now independently
construed.
Accordingly, the order of the Appellate Division should be modified,
with costs to respondents-appellants, by reinstating the judgment of
Supreme Court, and, as so modified, affirmed.
Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.
Order modified, etc. [*8] Footnotes
Footnote 1: Currently, there are six regional OTBs: New York City, Suffolk, Nassau, Capital District, Catskill and Western.
Footnote 2: While the Legislature recently renumbered relevant sections
of the Racing, Pari-Mutuel Wagering and Breeding Law, to maintain
consistency we adhere to the statutory numbering used by Supreme Court
and the Appellate Division in this case.
Footnote 3: The trial court additionally accorded deference to the
Board's reading of the statute it is empowered to oversee. What is at
issue, however, is a matter of statutory interpretation, not deference
to the operational expertise of the administrative agency.
the famous motto of all otb's is coulda woulda shoulda
The employees of New York City, Nassau OTB and Suffolk OTB should have spoken out early in the race before it is too late?
Nassau OTB's death was sealed by the acquisition and bonding of the Race Palace whose municipal bonds were covenanted and guaranteed by Nassau County.
Both Republicans and Democrats care not about people who have a job to do some work .
When the house of cards is ready to collapse, some run and some die, sort of like the rats who move when an apartment building is demolished to make room for a new glass tower.
No one has to speak up, but when the end comes, it is too late for coulda woulda shoulda
Supporters of Suffolk OTB's proposed casino in Medford walk out of civic group's meeting
A look inside the Empire City Casino at Yonkers Raceway on April 18, 2012. Photo Credit: Nancy Siesel
Dozens
of trade union workers and Suffolk Off-Track Betting employees stormed
out Wednesday night of a Medford community rally against building a $65
million video lottery gaming establishment.
"We're opposed to the casino," Medford resident Brett
Houdek said at the start of the meeting of the Medford Taxpayers and
Civic Association at the Medford firehouse.
Suffolk Off-Track Betting acquired the former Brookhaven
Multiplex movie theater site near Exit 64 of the Long Island Expressway
for $10.95 million. OTB has proposed opening a facility with about 1,000
video lottery machines and 1,400 parking spaces, starting next
February.
StoryProposed bill: OTB must consider communityMore coverageLatest Long Island gaming news Several plain-clothed Suffolk police officers were among the crowd of about 300 at Wednesday night's meeting.
After Houdek spoke for nearly 40 minutes, multiple outbursts occurred in the packed room.
More than one hundred casino proponents left.
Donald Nohs, 61, an eight-year OTB worker, was among the people who left.
"He's being condescending in his talk," said Nohs, referring to Houdek.
Minutes later, the meeting resumed.
"Let's stop the nonsense. No community on the Island would
want them [video lottery terminals]," Assemb. Michael Fitzpatrick
(R-St. James) told the gathering via Skype. Discussing a bill he
announced this week that would rescind state authorization for the site,
Fitzpatrick said: "The bill, if it generates enough support, maybe we
can pass this."
Brookhaven Town officials and civic leaders who oppose the
proposed casino want to force Suffolk OTB to withdraw its plans just as
Nassau OTB officials last month abandoned plans for a gaming facility
at the former Fortunoff site in Westbury after fierce opposition from
local, county and state officials.
Medford residents opposed to the plan have said they fear the casino would increase traffic and threaten their quality of life.
Before the meeting, about 15 Suffolk OTB employees, many
of whom favor the gaming to save their jobs, stood in front of the
building with "Yes to Casino and Jobs" signs.
Chris Dempsey, 60, a 40-year OTB employee, said: "I'm in support of people working. The casino will add jobs."
Suffolk OTB officials weren't expected to attend the meeting.
The Brookhaven Town Board recently adopted a nonbinding
resolution opposing the casino. In doing so, town officials acknowledged
that state law exempts video lottery terminals and OTB facilities from
local zoning laws.
Suffolk officials think the parlor would be a boon for OTB
and help close a $20 million county budget deficit. Supporters say it
would bring 500 construction jobs and create up to 400 other jobs.
where were all these workers and religious people and bettors whose right to do as they please has been violated by Suffolk OTB for years and years while it moans that the handle is down because they were closed? With Suffolk OTB's access to FREE LAWYERS you might think that someone would have pointed out thatIra Block Esq. , once counsel to now DEAD NYC OTB, was correct. See also NY Const. Art. 1, Sec. 3
Suicide is painless, fall on your sword, swallow poison etc. Bad bets, bad behavior, bad character or worse sometimes causes death.
Suffolk County should take back Kevin McCaffrey who has cost Nassau OTB employees some sums of money for very little or less.
It would be helpful? if the gang from Suffolk would help see that the New York Court of Appeals decision is reversed by the Legislature. Too little, to late, but perhaps a start?
HI-
Thanks for the help. The item’s below. I’d be happy to mail you
a copy, if you give me a mailing address.
Claude Solnik
(631) 913-4244
Long Island Business News
2150 Smithtown Ave.
Ronkonkoma, NY 11779-7348
Home > LI Confidential > Stop scratching on holidays
Stop scratching on holidays
Published: June 1, 2012
Off Track Betting in New York State has been racing into a
crisis called shrinking revenue. Some people have spitballed a
solution: Don’t close on holidays.
New York State Racing Law bars racing on Christmas, Easter and
Palm Sunday, and the state has ruled OTBs can’t handle action on
those days, even though they could easily broadcast races from
out of state.
“You should be able to bet whenever you want,” said Jackson
Leeds, a Nassau OTB employee who makes an occasional bet. He
added some irrefutable logic: “How is the business going to make
money if you’re not open to take people’s bets?”
Elias Tsekerides, president of the Federation of Hellenic
Societies of Greater New York, said OTB is open on Greek
Orthodox Easter and Palm Sunday.
“I don’t want discrimination,” Tsekerides said. “They close for
the Catholics, but open for the Greek Orthodox? It’s either open
for all or not open.”
OTB officials have said they lose millions by closing on Palm
Sunday alone, with tracks such as Gulfstream, Santa Anita, Turf
Paradise and Hawthorne running.
One option: OTBs could just stay open and face the consequences.
New York City OTB did just that back in 2003. The handle was
about $1.5 million – and OTB was fined $5,000.
Easy money.
OTB worker Donald Nohs confronts
fire commissioner Bill Hart over rules of the meeting on Wednesday, Feb.
25, 2015 in Medford. Photo Credit: Joseph D.
Sullivan
Republican Angie Carpenter, who is
resigning as Suffolk County treasurer to become the appointed Islip Town
supervisor at a salary of $103,000 a year, has filed for her state
pension, which she expects will net her another $77,000 annually.
Photo Credit: Newsday / J. Conrad Williams Jr.
