S T A T E O F N E W Y O R K
________________________________________________________________________
7382
I N S E N A T E
April 5, 2010
___________
Introduced by Sen. ADAMS -- read twice and ordered printed, and when
printed to be committed to the Committee on Racing, Gaming and Wager-
ing
AN ACT to amend the racing, pari-mutuel wagering and breeding law, in
relation to the franchise oversight board
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 3 and 8 of section 212 of the racing, pari-mu-
tuel wagering and breeding law, subdivision 3 as amended and subdivision
8 as added by chapter 18 of the laws of 2008, and subparagraphs (viii)
and (xi) of paragraph a of subdivision 8 as amended by chapter 140 of
the laws of 2008, are amended to read as follows:
3. Such members, except as otherwise provided by law, may engage in
private or public employment, or in a profession or business. The board,
its members, officers and employees shall be subject to the provisions
of sections seventy-three and seventy-four of the public officers law.
No former trustee or officer of a non-profit racing association known as
The New York Racing Association, Inc. or its predecessor, no current
director or officer of a franchised corporation, NO FORMER OR CURRENT
DIRECTOR OR OFFICER OF NEW YORK CITY OFF-TRACK BETTING CORPORATION or
any individual registered with the New York commission on public integ-
rity shall be appointed as members to the board nor shall any member of
the board have any direct or indirect interest in any racehorse,
thoroughbred racing, OFF-TRACK BETTING or pari-mutuel wagering business,
video lottery terminal facility or any development at any racing facili-
ty.
8. a. The duties and responsibilities of the franchise oversight board
shall include, but not be limited to, the following:
(i) represent the interests of the state in all real estate develop-
ment proposed for Aqueduct racetrack or real estate development at
Belmont Park racetrack. Any such real estate development shall only be
undertaken pursuant to a competitive process approved by the board,
after consultation with the applicable local advisory boards and consid-
eration of local zoning and planning regulation, and in a manner that
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16782-01-0
S. 7382 2
will not adversely impact any historic structure that is included in or
eligible for inclusion in the National or the State Register of Historic
Places, be consistent with any plan approved for such community, and
shall be subject to unanimous approval of the franchise oversight board
and all statutory and regulatory requirements; provided, however, that,
subject to approval of the franchise oversight board and subject to all
statutory and regulatory requirements, the franchised corporation shall
have full powers and rights to develop, redevelop, refurbish, renovate
or make such other improvements, capital expenditures or otherwise, to
the racetracks and the fixtures and improvements thereon consistent with
projects specifically identified in the franchised corporation's
approved track facility improvement plan.
The franchise oversight board shall be guided by the goals of ensuring
the continuation of high quality thoroughbred racing at the thoroughbred
racing facilities located within the state, raising revenue for or in
aid or support of education in this state from video lottery gaming at
facilities of the state racing franchise, and maximizing revenue for
governments from pari-mutuel wagering on racing at facilities of the
state racing franchise.
(ii) monitor and enforce compliance with definitive documents that
comprise the franchise agreement between the franchised corporation and
the state of New York governing the franchised corporation's operation
of thoroughbred racing and pari-mutuel wagering at the racetracks. The
franchise agreement shall contain objective performance standards that
shall allow contract review in a manner consistent with this chapter.
The franchise oversight board shall notify the franchised corporation
authorized by this chapter in writing of any material breach of the
performance standards or repeated non-material breaches which the fran-
chise oversight board may determine collectively constitute a material
breach of the performance standards. Prior to taking any action against
such franchised corporation, the franchise oversight board shall provide
the franchised corporation with the reasonable opportunity to cure any
material breach of the performance standards or repeated non-material
breaches which the franchise oversight board may determine collectively
constitute a material breach of the performance standards. Upon a writ-
ten finding of a material breach of the performance standards or
repeated non-material breaches which the franchise oversight board may
determine collectively constitute a material breach of the performance
standards, the franchise oversight board may recommend that the fran-
chise agreement be terminated. The franchise oversight board shall refer
such recommendation to the racing and wagering board for a hearing
conducted pursuant to section two hundred forty-five of this article for
a determination of whether to terminate the franchise agreement with the
franchised corporation;
(iii) oversee, monitor and review all significant transactions and
operations of the franchised corporation AND THE NEW YORK CITY OFF-TRACK
BETTING CORPORATION authorized by this chapter; provided, however, that
nothing in this section shall be deemed to reduce, diminish or impede
the authority of the state racing and wagering board to, pursuant to
article one of this chapter, determine and enforce compliance by the
franchised corporation OR THE NEW YORK CITY OFF-TRACK BETTING CORPO-
RATION with terms of racing laws and regulations. Such oversight shall
include, but not be limited to:
(A) review and make recommendations concerning the annual operating
budgets of such franchised corporation AND THE NEW YORK CITY OFF-TRACK
BETTING CORPORATION;
S. 7382 3
(B) review and make recommendations concerning operating revenues and
the establishment of a financial plan;
(C) review and make recommendations concerning accounting, internal
control systems and security procedures;
(D) review such franchised corporation's AND THE NEW YORK CITY
OFF-TRACK BETTING CORPORATION'S revenue and expenditure [polices] POLI-
CIES which shall include collective bargaining agreements management and
employee compensation plans, vendor contracts and capital improvement
plans;
(E) review such franchise corporation's AND THE NEW YORK CITY
OFF-TRACK BETTING CORPORATION'S compliance with the laws, rules and
regulations applicable to its activities;
(F) make recommendations for establishing model governance principles
to improve accountability and transparency; and
(G) receive, review, approve or disapprove capital expense plans
submitted annually by the franchised corporation AND THE NEW YORK CITY
OFF-TRACK BETTING CORPORATION.
(iv) evaluate, review and approve the racing franchisee's AND THE NEW
YORK CITY OFF-TRACK BETTING CORPORATION'S selection of a vendor or
vendors to contract with the franchised corporation AND THE NEW YORK
CITY OFF-TRACK BETTING CORPORATION for provision of totalizator
services, and manage, subject to the franchised corporation's unilateral
right to opt out, directly or indirectly, integration of any offered
internet wagering platform. The franchise oversight board shall consider
in its evaluation of any such proposed vendor their ability to reduce
the totalizator expenses and general development and production costs of
any internet wagering platform of an authorized off-track betting corpo-
ration and the state racing franchise holder.
(v) facilitate discussions and voluntary agreements between the fran-
chised corporation and off-track betting corporations to streamline
operations, decrease operating costs and maximize opportunities pertain-
ing to costs and revenues, and encourage an exchange of views and expe-
riences from the franchised corporation and the off-track betting corpo-
rations to improve the racing product in New York and to realize
efficiencies, EXCEPT THE NEW YORK CITY OFF-TRACK BETTING CORPORATION
SHALL TRANSFER ALL WAGERING ACCOUNTS, INCLUDING INDIVIDUAL ACCOUNT
BALANCES HELD FOR TELEPHONE AND INTERNET WAGERING TO THE FRANCHISE OVER-
SIGHT BOARD. NEW YORK CITY OFF-TRACK BETTING CORPORATION SHALL PROVIDE A
REPORT FROM ITS TOTALIZATOR PROVIDER OF ALL WAGERING ACCOUNTS INCLUDING
INDIVIDUAL CUSTOMER ACCOUNT BALANCES. THE FRANCHISE OVERSIGHT BOARD
SHALL FORTHWITH ENTER INTO A MANAGEMENT SERVICES AGREEMENT ON BEHALF OF
NEW YORK CITY OFF-TRACK BETTING CORPORATION WITH A THIRD PARTY VENDOR
SELECTED BY THE FRANCHISE OVERSIGHT BOARD SUBJECT TO STATE PROCUREMENT
LAW AND REGULATIONS FOR THE OPERATION OF THE ACCOUNT DEPOSIT WAGERING
FOR TELEPHONE AND INTERNET WAGERING. ANY SUCH MANAGEMENT FEE DERIVED
FROM SAID AGREEMENT SHALL BE DEDICATED TO OUTSTANDING LIABILITIES AND
CONTRACTUAL OBLIGATIONS WITH UNIONIZED EMPLOYEES OF NEW YORK CITY
OFF-TRACK BETTING TO THE EXTENT SUCH EXIST;
(vi) review and approve all purchasing policies pursuant to paragraph
(a) of subdivision six of section two hundred eight of this article AND
USED BY NEW YORK CITY OFF-TRACK BETTING CORPORATION;
(vii) NEW YORK CITY OFF-TRACK BETTING CORPORATION AND THE FRANCHISED
CORPORATION SHALL JOINTLY NEGOTIATE ALL SIMULCASTING CONTRACTS WITH OUT
OF STATE ENTITIES AND THE FRANCHISE OVERSIGHT BOARD SHALL review and
provide any recommendations on all simulcasting contracts (buy and sell)
S. 7382 4
that are also subject to prior approval of the racing and wagering
board;
(viii) act on behalf of the People of the State of New York to enter
into any real property transactions in furtherance of the purposes and
intent of this statute, including, without limitation, one or more
ground leases, for one dollar in consideration annually, for each of
Aqueduct racetrack, Belmont Park and Saratoga racecourse to the fran-
chised corporation, for a term that will extend until the racing fran-
chise expires, is revoked, terminated or ends by any other means
provided by law. Such leases shall be executed contemporaneously with
the conveyance of the racetracks by the franchised corporation's prede-
cessor to the state;
(ix) enter into on behalf of the state as licensor, a long term
license agreement with the franchised corporation for the use of the
simulcast signal and associated intellectual property rights, for
consideration of one dollar annually and for a term that will extend
until the racing franchise expires, is revoked, terminated or ends by
any other means provided by law. Such license agreement shall be
executed contemporaneously with the conveyance of the franchised corpo-
ration's assets associated with the franchise agreement.
(x) conduct running races or steeplechases at racing facilities and
conduct pari-mutuel betting on the outcome of the same when necessary to
assure the continuation of the racing and pari-mutuel betting activities
at such racing facilities (A) in the event that the racing and/or pari-
mutuel betting franchises of the franchised corporation authorized by
this chapter then holding such franchises have either been terminated in
the manner provided by law or have been relinquished by such corpo-
ration, or such corporation declines to continue conducting race meet-
ings and pari-mutuel betting on the outcome of the same as required by
such franchises unless such declination is the result of strikes, acts
of God, or other unavoidable causes not under the control of such corpo-
ration, or the corporate existence of such corporation has been
dissolved in the manner provided by law prior to the end of the term of
any such franchise and (B) until such time as a new franchise is
granted, AND TO CONDUCT ALL OPERATIONS AND PARI-MUTUEL WAGERING AS
AUTHORIZED PURSUANT TO THIS CHAPTER FOR NEW YORK CITY OFF-TRACK BETTING
CORPORATION IN THE EVENT THAT THE SYSTEM OF OFF-TRACK PARI-MUTUEL
BETTING IN THE CITY OF NEW YORK OPERATED BY NEW YORK CITY OFF-TRACK
BETTING CORPORATION HAS EITHER BEEN TERMINATED OR RELINQUISHED BY SUCH
CORPORATION, OR SUCH CORPORATION DECLINES TO CONTINUE TO OPERATE UNLESS
SUCH DECLINATION IS THE RESULT OF STRIKES, ACTS OF GOD OR OTHER UNAVOID-
ABLE CAUSES NOT UNDER CONTROL OF SUCH CORPORATION UNTIL SUCH TIME AS
OTHERWISE PROVIDED FOR IN STATUTE;
(xi) on behalf of the People of the State of New York, and, acting in
such capacity as lessor of the racing facilities and real estate, be
responsible for payment of all property taxes related to such racing
facilities and real estate;
(xii) report annually to the governor and the legislature, beginning
no later than December thirty-first, two thousand eight, stating its
findings and recommendations to implement policy and legislative changes
necessary to encourage the continuation of high quality thoroughbred
racing in New York state and to protect the legitimate interests of the
state and the thoroughbred racing industry;
(xiii) require the franchised corporation AND THE NEW YORK CITY
OFF-TRACK BETTING CORPORATION to make all records and documents pertain-
ing to its financial practices, and other documents and records neces-
S. 7382 5
sary to carry out its duties, available to the franchise oversight board
within thirty days of a written request;
(xiv) examine or cause to be examined by a third party, the books,
papers, records and accounts of the franchised corporation AND THE NEW
YORK CITY OFF-TRACK BETTING CORPORATION;
(xv) sue and be sued;
(xvi) make and execute contracts and all other instruments necessary
or convenient for the exercise of its powers and functions under this
article;
(xvii) request and accept the assistance of any state agency, includ-
ing but not limited to, the racing and wagering board, the division of
the lottery office of parks, recreation and historic preservation, the
department of environmental conservation, THE OFFICE OF GENERAL SERVICES
and the department of taxation and finance, in obtaining information
related to the franchised corporation's compliance with the terms of the
franchise agreement; and
(xviii) do all things necessary, convenient or desirable to carry out
its purposes and for the exercise of the powers granted in this article.
b. Notwithstanding any other provision of this article, the franchised
corporation shall be entitled to make capital expenditures, except those
capital expenditures for the Saratoga Racecourse that may, on the advice
of the New York state historic preservation office, adversely impact any
historic structure that is included in or is eligible for inclusion in
the national or state register of historic places, to the physical plant
of the racetracks, grandstand, backstretch, parking and public areas set
forth in the New York Racing Association's capital expenditure plan
("capital plan") filed with the racing and wagering board in two thou-
sand seven. Any material modification to the capital plan as determined
by the franchise oversight board and each future capital investment plan
for the tracks, grandstand, backstretch, parking and public areas of the
racetracks operated by the franchised corporation involving the expendi-
ture of more than five million dollars in the aggregate shall require
the prior approval of the franchise oversight board. Within five years
from the date of commencement of the video lottery terminal operations
at Aqueduct, and every five years thereafter, the franchised corporation
shall submit to the oversight board a capital plan for the five year
period commencing on January first of the following year. Such plans
shall contain both the intended object of expenditure and the proposed
sources of financing. The franchised corporation shall report to the
franchise oversight board within ninety days following the end of each
fiscal year as to the amount spent pursuant to the capital plan.
S 2. This act shall take effect immediately; provided, however, that
the amendments to section 212 of the racing, pari-mutuel wagering and
breeding law made by section one of this act shall take effect upon the
confirmation of the New York Racing Association plan of reorganization
pursuant to section 16 of chapter 18 of the laws of 2008, as amended;
provided further, that the amendments to section 212 of the racing,
pari-mutuel wagering and breeding law made by section one of this act
shall be deemed repealed as provided by chapter 354 of the laws of 2005,
as amended.
