NY State Senate Bill 2009-S7351

Senate Bill S7351

2009-2010 Legislative Session

Repeals the New York city off-track betting corporation provisions and authorizes the transfer to a private vendor; repealer

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 31, 2010	referred to investigations and government operations

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2009-S7351 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Alcoholic Beverage Control Law
Laws Affected:: Amd §§3 & 17, ABC L; amd §519, RWB L; add §97-jjjj, St Fin L

2009-S7351 (ACTIVE) - Summary

Repeals the New York city off-track betting corporation provisions and authorizes the transfer to a private vendor; establishes registered sports bars and authorizes the use of interactive gaming devices.

2009-S7351 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S7351

 TITLE OF BILL :
An act establishing the New York city off-track betting privatization
act; to amend the alcoholic beverage control law, in relation to
registered sports bars; to amend the racing, pari-mutuel wagering and
breeding law, in relation to interactive gaming devices; making the
New York city off-track betting corporation a private corporation and
establishing procedures for the implementation of the transfer to a
private vendor; to amend the state finance law, in relation to a New
York city off-track betting corporation retiree health insurance
guarantee account; and to repeal article 6 of the racing, pari-mutuel
wagering and breeding law relating to the New York city off-track
betting corporation


 PURPOSE :
To ensure the long term viability of horse racing in New York State by
privatizing the New York City Off Track Betting Corporation.

 SUMMARY OF PROVISIONS :
This bill creates an expedited, transparent, non political process for
privatizing the New York City OTB.

Section 1. Short Title. The New York City Off Track Betting
Privatization Act.

Section 2. Defines registered sports bar as any facility licensed to
sell alcoholic beverages by the State Liquor Authority that meets the
following criteria:

* Is registered with the State Liquor Authority as a sports bar;

* Has at least two television screens that measure no less than 40
inches diagonally;

* Offers horse racing and over sporting events on television to its
patrons;

* Pays an annual registration fee of $400 per interactive gaming
device installed.

A registered sports bar may offer the use of interactive gaming
devices subject to the fee described above.

Section 3. Defines interactive gaming device.

Section 4. Provides that the State Liquor Authority shall not deny any
sports bar as defined herein, registration as a sports bar as long as
its license to sell and serve alcohol remains in good standing.

Section 5. Creates the New York City Off Track Betting Corporation
Retiree Health Insurance Guarantee Account to serve as the repository
for the annual licensing fee. Funds from this account are dedicated to
paying for the health insurance benefits of current retirees from the
New York City OTB.

Section 6. Repeals Article 6 of the Racing, Pari-mutuel Wagering and
Breeding Law.

Section 7. Establishes the New York Off Track Betting Corporation as a
private entity and provides a process for selecting an operator to run
such entity. Provides that the new entity is not liable for any of the
debts and obligations of the former New York City OTB.


Process for selecting an independent vendor to run the New York City
Off Track Betting Corporation.



ACTION                                DATE

Provision to Allow Submitting or      120 days after effective
Amending of Proposals                 date of the act

State Comptroller to recommend        10 days after the close of the
third party reviewer from one of      bidding process
the ten largest accounting firms
as measured by gross revenue

Selection of Third Party reviewer     20 days after the close of
by Governor, Speaker and Temporary    the bidding process
President of the Senate

Transmittal of proposals to reviewer, 25 days after effective
& revealing of the names & business   date of the act
address of the potential vendors

Recommendation by Reviewer: reveals   40 days after the close of
the name of the vendor and reasons    the bidding process
for recommendation

Public hearing                        10 days after recommendation

Selection of Vendor                   15 days after the public hearing

Minimum bid                           Minimum cash component of any
                                      bid shall be $250 million,
                                      provided that nothing shall
                                      prevent a potential vendor
                                      from a larger cash component

Work Force Retention                  The vendor must select 20
                                      percent of its work force
                                      from employers of the former
                                      New York City OTB

 JUSTIFICATION :
The  New  York  City  Off-track  Betting  Corporation is insolvent and
facing closure. This will have serious  repercussions  for  the  horse
racing industry in the rest of the State. Nearly $1.1 billion dollars,
almost half of all money wagered on horse racing in New York State, is
wagered  through  the New York City Off-track Betting Corporation. The
revenue distributed to the racing  industry,  which  is  derived  from
wagering through New York City Off Track Betting Corporation, plays an
integral  role  in sustaining the viability of the entire horse racing
industry in New York State. Also, the New York City Off Track  Betting
Corporation employs approximately 1,300 people in the greater New York
City  and  surrounding  metropolitan  area.  Additionally,  since  its
inception in 1973, New York's regional off-track  betting  system  has
provided  state  and  local  governments  with significant revenues to
support government operations and to  aid  in  reducing  increases  in
local  property  taxation and that the New York City Off Track Betting
Corporation  is  an  essential  part  of  that  system.  The  regional
off-track   betting  system  has  been  integrated  into  the  state's
pari-mutuel  racing  and  breeding  industry  to   provide   statewide
accessibility  and  exposure  to  New  York's quality thoroughbred and
harness racing. Such  accessibility  and  exposure  has  significantly
contributed to the economic well-being of New York's racetracks, their
horsemen and employees and the growth of horse breeding in the state.

 LEGISLATIVE HISTORY :
New bill

 FISCAL IMPLICATIONS :
There  are  two  revenue streams that will result from passage of this
bill and the subsequent selection of a private operator to run the New
York City OTB. The first is a one-time  payment  of  $250  million  to
finance the pension obligations of the current NYC OTB retirees.

The second is from a licensing fee which will offset some of the costs
of  the  health  insurance  benefits of current retirees. Revenue from
this fee is based  upon  the  number  of  interactive  gaming  devices
installed  in  each bar, the number of bars participating and a fee of
$400 per interactive gaming device.


                 NUMBER OF BARS THAT WILL INSTALL KIOSKS

NUMBER OF
KIOSKS

   2,000      2,500      3,000      3,500      4,000          4,500


2  $1,600,000 $2,000,000 $2,400,000 $2,800,000 $3,200,000    $ 3,600,000

5  $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000    $ 9,000,000

8  $6,400,000 $8,000,000 $9,600,000 $11,200,000 $12,800,000  $14,000,000

10 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000

 EFFECTIVE DATE :
The first day of the month next succeeding the day on which  it  shall
have become law.

2009-S7351 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7351

                            I N  S E N A T E

                             March 31, 2010
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT establishing the New York city  off-track  betting  privatization
  act;  to  amend  the  alcoholic  beverage  control law, in relation to
  registered sports bars; to amend the racing, pari-mutuel wagering  and
  breeding  law,  in  relation to interactive gaming devices; making the
  New York city off-track betting corporation a private corporation  and
  establishing  procedures  for  the implementation of the transfer to a
  private vendor; to amend the state finance law, in relation to  a  New
  York city off-track betting corporation retiree health insurance guar-
  antee  account;  and  to  repeal  article 6 of the racing, pari-mutuel
  wagering and breeding law relating to  the  New  York  city  off-track
  betting corporation

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Short title.  This act shall be known and may be  cited  as
the "New York city off-track betting privatization act".
  S  2.  Section  3  of the alcoholic beverage control law is amended by
adding a new subdivision 29-a to read as follows:
  29-A. "REGISTERED SPORTS BAR" MEANS ANY ESTABLISHMENT LICENSED TO SELL
ALCOHOLIC BEVERAGES AS DEFINED BY SUBDIVISION ONE OF THIS  SECTION  THAT
MEETS THE FOLLOWING CRITERIA:
  (A) THE ESTABLISHMENT IS REGISTERED WITH THE STATE LIQUOR AUTHORITY AS
A SPORTS BAR;
  (B)  THE ESTABLISHMENT HAS AT LEAST TWO TELEVISION SCREENS THAT ARE NO
LESS THAN FORTY INCHES, DIAGONALLY ACROSS THE VIEWABLE SCREEN;
  (C) THE ESTABLISHMENT OFFERS  PATRONS  ACCESS  TO  TELEVISED  SPORTING
EVENTS  INCLUDING,  BUT  NOT  LIMITED  TO,  HORSE RACING AND TRADITIONAL
PROFESSIONAL AND COLLEGIATE SPORTING EVENTS SUCH  AS  FOOTBALL,  HOCKEY,
BASEBALL AND BASKETBALL; AND
  (D)  THE ESTABLISHMENT PAYS AN ANNUAL REGISTRATION FEE OF FOUR HUNDRED
DOLLARS PER INTERACTIVE GAMING DEVICE AS DEFINED IN SUBDIVISION FIVE  OF

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16691-03-0

S. 7351                             2

SECTION  FIVE  HUNDRED  NINETEEN OF THE RACING, PARI-MUTUEL WAGERING AND
BREEDING LAW.
  A  REGISTERED  SPORTS BAR MAY OFFER INTERACTIVE GAMING DEVICES FOR THE
PURPOSE OF PLACING WAGERS AS AUTHORIZED BY THE NEW YORK STATE RACING AND
WAGERING BOARD.
  S 3. Section 519 of the racing, pari-mutuel wagering and breeding  law
is amended by adding a new subdivision 5 to read as follows:
  5. "INTERACTIVE GAMING DEVICE" MEANS A KIOSK OR SIMILAR DEVICE SUCH AS
IS  INSTALLED  IN  THE  WAGERING  VENUES  OF THE NEW YORK CITY OFF-TRACK
BETTING CORPORATION.   FOR PURPOSES OF THIS  SUBDIVISION,  SUCH  DEVICES
SHALL  BE DEFINED AS A SMALL PHYSICAL STRUCTURE THAT INCLUDES A COMPUTER
AND AN INTERACTIVE DISPLAY SCREEN WHICH DISPLAYS  INFORMATION  TO  USERS
AND  MAY  ALLOW USERS TO INTERACT WITH THE COMPUTER THROUGH AN INTERFACE
SUCH AS A KEYBOARD, MOUSE OR TOUCH SCREEN.
  S 4. Subdivision 2 of section 17 of  the  alcoholic  beverage  control
law, as amended by chapter 83 of the laws of 1995, is amended to read as
follows:
  2.  To limit in its discretion the number of licenses of each class to
be issued within the state or any political subdivision thereof, and  in
connection therewith to prohibit the acceptance of applications for such
class  or  classes  of  licenses  which have been so limited.   PROVIDED
HOWEVER, THAT NO PREMISES LICENSED PURSUANT TO  THIS  CHAPTER  SHALL  BE
DENIED REGISTRATION AS A SPORTS BAR IF ITS LICENSE TO SELL ALCOHOL IS IN
GOOD  STANDING  WITH  THE  AUTHORITY AND IT MEETS THE QUALIFICATIONS SET
FORTH IN SECTION THREE OF THIS CHAPTER.
  S 5. The state finance law is amended by adding a new section  97-jjjj
to read as follows:
  S  97-JJJJ.  THE  NEW  YORK CITY OFF-TRACK BETTING CORPORATION RETIREE
HEALTH INSURANCE GUARANTEE ACCOUNT. 1. THERE IS  HEREBY  ESTABLISHED  IN
THE JOINT CUSTODY OF THE STATE COMPTROLLER AND THE COMMISSIONER OF TAXA-
TION AND FINANCE AN ACCOUNT OF THE MISCELLANEOUS SPECIAL REVENUE FUND TO
BE  KNOWN  AS  THE  NEW  YORK CITY OFF-TRACK BETTING CORPORATION RETIREE
HEALTH INSURANCE GUARANTEE ACCOUNT.
  2. SUCH ACCOUNT SHALL CONSIST  OF  MONIES  RECEIVED  FROM  THE  ANNUAL
REGISTRATION  FEE  ESTABLISHED  PURSUANT TO SUBDIVISION TWENTY-NINE-A OF
SECTION THREE OF THE ALCOHOLIC BEVERAGE CONTROL LAW.
  3. MONIES FROM THIS ACCOUNT, FOLLOWING APPROPRIATION BY  THE  LEGISLA-
TURE  SHALL  BE  AVAILABLE  TO  THE STATE COMPTROLLER FOR THE PAYMENT OF
RETIREE HEALTH BENEFITS FOR EMPLOYEES RETIRED FROM  THE  NEW  YORK  CITY
OFF-TRACK  BETTING  CORPORATION  ON  OR BEFORE THE DATE THAT A VENDOR IS
SELECTED TO RUN THE NEW YORK CITY OFF-TRACK  BETTING  CORPORATION  AS  A
RECONSTITUTED  PRIVATE ENTITY PURSUANT TO THE CHAPTER OF THE LAWS OF TWO
THOUSAND TEN WHICH ADDED THIS SECTION.
  S 6. Article 6 of the racing, pari-mutuel wagering and breeding law is
REPEALED.
  S 7. 1. Disposition of assets of the corporation. Notwithstanding  any
provision  of  law, rule or regulation to the contrary, a corporation to
be known as the "New York city off-track betting corporation" is  hereby
established  as  a  private  corporation. Such private corporation shall
receive the assets of the former New York city off-track betting  corpo-
ration as defined by section 603 of the racing, pari-mutuel wagering and
breeding  law  as  it existed immediately prior to the effective date of
the chapter of the laws of  2010  which  added  this  section;  provided
however that such private corporation shall not be a successor in inter-
est  to  the  accrued liabilities of such former New York city off-track

S. 7351                             3

betting corporation. The selection of an operator of such private corpo-
ration shall be governed by the process delineated in this section.
  2.  Provision  to allow submission or amendments of proposals. For 120
days after the effective date of this act, the governor's  office  shall
allow  potential  vendors  to  submit  proposals for the acquisition and
management of the assets of the New York city off-track  betting  corpo-
ration.
  3.  Selection  of  third  party reviewer. The governor's office shall,
within twenty days of the closing of the bidding process, contract  with
an accountancy and professional services firm, recommended by the office
of the state comptroller, to review the proposals and make a recommenda-
tion  for  the selection of one of the potential operators by the gover-
nor, the speaker of the assembly and  the  temporary  president  of  the
senate. No later than ten days after the closing of the bidding process,
the  state comptroller shall recommend to the governor a firm to conduct
the review and make recommendations from among the ten largest  interna-
tional  accountancy and professional services firms as measured by gross
revenue as reported in the most recent annual  financial  statements  of
such firms.
  4. Submission for review. No later than the twenty-fifth day after the
closing date of the bidding process, the governor's office shall provide
to the accountancy and professional services firm selected the proposals
of  potential operators submitted or deemed active pursuant to this act.
On the date of such transmittal, the governor's office shall reveal  the
names and primary places of business of each such potential operator.
  5.  Recommendation.  Within  forty  days of the closing of the bidding
process, the accountancy and professional services firm shall  make  its
recommendation concerning a potential operator to be selected in accord-
ance  with the criteria established pursuant to this section. On the day
that the recommendation is transmitted to the  governor,  the  temporary
president  of the senate, and the speaker of the assembly, the recommen-
dation shall be made public, along  with  the  reasons  for  making  the
recommendation.
  6.  Public  hearing.  Within ten business days of the day on which the
accountancy and professional services firm makes the recommendation, the
fiscal committees of the two houses of the legislature shall  conduct  a
joint  public  hearing concerning the recommendation, such hearing to be
conducted in the city of Albany.
  7. Selection of vendor. Not more than fifteen business days  following
the date of the joint public hearing, the governor, the temporary presi-
dent of the senate and the speaker of the assembly shall select an oper-
ator  for  the  newly constituted New York city off-track betting corpo-
ration.
  8. Minimum bid. Minimum acceptable bid shall include a cash component.
Such cash component shall be remitted in the form of a cash payment that
is no less than 250 million dollars, provided that nothing shall prevent
a potential operator from including a cash  payment  of  more  than  250
million  dollars.  Funds realized pursuant to this section shall be used
to fulfill any unfunded New  York  city  off-track  betting  corporation
employee  pension  liability  that  may  exist  at  the time a vendor is
selected pursuant to this section.
  9. Assessments. The new private corporation  shall  remit  amounts  as
required  by  article 5 of the racing, pari-mutuel wagering and breeding
law,  except  that  such  corporation  shall  first  pay  its  operating
expenses, employee pensions costs, health benefits and other obligations
prior to remitting such assessments.

S. 7351                             4

  10.  Workforce retention. No less than twenty percent of the workforce
of the selected operator that will be charged  with  running  the  newly
privatized  New  York  city  off-track  betting  corporation,  shall  be
selected from employees of the former New York  city  off-track  betting
entity.
  S  8.  This  act  shall  take  effect  on  the first of the month next
succeeding the date on which it shall have become a law;  provided  that
within  ninety  days  of the effective date of this act the state liquor
authority shall adopt rules and regulations necessary for the  implemen-
tation  of  a process for the registration of sports bars as provided in
section two of this act.

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Senate Bill S7351

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Sponsored By

Martin J. Golden