senate Bill S3334B

2011-2012 Legislative Session

Relates to the New York city off-track betting corporation and establishes the New York city off-track betting corporation fund; repealer

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 23, 2012 print number 3334b
amend and recommit to racing, gaming and wagering
Jan 04, 2012 referred to racing, gaming and wagering
Mar 15, 2011 reported and committed to finance
Mar 03, 2011 print number 3334a
amend and recommit to racing, gaming and wagering
Feb 17, 2011 referred to racing, gaming and wagering

Bill Amendments

Original
A
B (Active)
Original
A
B (Active)

Co-Sponsors

S3334 - Bill Details

Current Committee:
Law Section:
Racing, Pari-Mutuel Wagering and Breeding Law
Laws Affected:
Rpld §610 sub 4 & 5, §§611, 612, 613, 614, 616 & 620, amd RWB L, generally; add §95-h, St Fin L

S3334 - Bill Texts

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Relates to the New York city off-track betting corporation and establishes the New York city off-track betting corporation fund.

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BILL NUMBER:S3334

TITLE OF BILL:
An act
to amend the racing, pari-mutuel wagering and breeding law and the state
finance law, in relation to the New York city off-track betting
corporation and establishing the New York city off-track betting
corporation fund; and to repeal certain provisions of the racing,
pari-mutuel wagering and breeding law relating thereto

PURPOSE:
This bill would allow a vendor selected by an RFP process, to run the
New York City off-track betting corporation and resume operations in
a manner that would support the New York state horse racing industry.

SUMMARY OF PROVISIONS:
Section 1. Amends section 602 of the racing, pari-mutual wagering and
breeding law (RPWBL) to add a new term "vendor operator" to the
definitions and to remove the reference to bonds in the definition of
"cost of corporation's functions".

Section 2. Amends section 603 of the RPWBL to change the board of
directors' function from administration to oversight of the New York
City off-track betting corporation ("NYCOTB"); to give the duties of
administration of the NYCOTB to the vendor operator; to terminate the
terms of current board members; to appoint a new board; and to
exclude current executive and legislative employees from serving as
board members.

Section 3. Amends section 617 or the RPWBL to remove reference to
bonds and notes.

Section 4. Amends section 621 of the RPWBL to transfer the duty to
provide an annual report from the board of directors to the vendor
operator.

Section 5. Creates a new section 625 of the RPWBL to provide the
process for selecting a vendor operator.

Section 6. Amends clauses of section 1016 of the RPWBL to eliminate
the requirement that off-track betting corporations ("OTBs") pay all
other Dark Day payments to licensed regional harness tracks in New
York State, but keeps in place the existing portion of the payments
which flow to the horsemen and breeders.

Section 7. Amends section 1017 of the RPWBL § 1017(2) to eliminate the
requirement that OTBs pay Maintenance of Effort and hold harmless
payments to licensed regional harness tracks in New York State, but
requires that the portion of such payments which were made to the
horsemen and breeders will continue to be made.

Section 8. Amends section 529 of the RPWBL to allow all off-track
betting corporations to retain their uncashed tickets.

Section 9. Amends section 523 of the RPWBL to redirect all local
payments derived from NYCOTB and other OTBs that previously went to


the city of New York, be deposited in the newly created New York City
off-track betting corporation fund.

Section 10. Amends section 610 of the RPWBL to redirect NYCOTB to
deposit all payment collections previously owed to New York City into
the newly created New York City off-track betting corporation fund.

Section 11. Amends section 527 of the RPWBL § 527 to direct all
pari-mutuel taxes paid by NYCOTB be deposited into the newly created
New York City Off Track Betting Corporation fund.

Section 12. Creates a new section 626 of the RPWBL to create a vendor
operator fee to be paid to the vendor who is selected to operate
NYCOTB.

Section 13. Creates a new section 97-kkkk of the State Finance Law to
create the New York City Off Track Betting Corporation fund.

Section 14. Creates a new section 114 of the RPWBL to direct the New
York State Racing and Wagering Board to make a determination as to
whether out-of-state internet wagering sites taking wagers from New
York residents have a detrimental effect on the racing industry, and
if such a detriment exists, authorize the Board to eliminate or
regulate the practice.

Section 15. Clarifies the State's obligation to reimburse the City of
New York for the cost of health insurance for eligible retirees
of NYCOTB.

Sections 15-23. Repeal sections of RPWBL (subdivisions 4 and 5 of

§610; §§611,612, 613, 614, 616 and 620 that refer to NYCOTB's former
ability to seek bonding.

Section 24. Provides for an immediate effective date.

BUDGET IMPLICATIONS:
This bill would lower state finances by $5.7 million in SFY 2011-12.
The $4.4 million in additional revenues from the pari-mutuel taxes
and a redirection of New York City's OTB payments to the state would
be offset by a New York City off-track betting vendor operator fee of
$2.5 million; the OTBs now keeping $3 million in uncashed tickets
that previously went to the State; and $4.6 million in reimbursements
to New York City for paying New York City off track betting retiree
health benefits.

STATEMENT IN SUPPORT:
The closing of operations of the New York City off-track betting
corporation was preventable.
For years the corporation has struggled, yet the current board of
directors failed to address the factors that hampered the success of
the corporation and failed to formulate a profitable business plan.
As a public benefit corporation, integral to the New York State
racing industry, and as an employer of hundreds, the failure of this
corporation is felt by many. Resurrecting this corporation is
necessary, but only in a manner that allows the corporation to be
profitable long term.


By restructuring the corporation to allow for a private vendor
operator, the state will encourage the participation of the best and
the brightest of the business world to bring new ideas and new life
to this corporation. The selection process will be fair and
impartial, and open to public input.
This vendor will have a vested interest in the success of the
corporation, and thus better motivated to run the operation
efficiently.

The demise of operations of the corporation did bring to light factors
that may be unfairly burdening not only NYCOTB but the other OTBs of
the state as well. This bill addressed both outdated obligations as
well as unfair competition from out-of-state entities to give all
OTBs in this state a better financial future.

EFFECTIVE DATE:
This act shall take effect immediately.

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

                                  3334

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 17, 2011
                               ___________

Introduced by Sens. LANZA, GOLDEN -- read twice and ordered printed, and
  when  printed  to  be committed to the Committee on Racing, Gaming and
  Wagering

AN ACT to amend the racing, pari-mutuel wagering and  breeding  law  and
  the  state  finance  law,  in  relation to the New York city off-track
  betting corporation and  establishing  the  New  York  city  off-track
  betting  corporation  fund;  and  to  repeal certain provisions of the
  racing, pari-mutuel wagering and breeding law relating thereto

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

  Section  1.  Subdivision  9  of section 602 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter  115  of  the  laws  of
2008, is amended and a new subdivision 15 is added to read as follows:
  9.  "Cost of corporation's functions." All costs and expenses incurred
by the corporation in connection with the performance of  the  functions
of the corporation, including, but not limited to, operating expenses of
the corporation, the cost of acquiring, constructing or equipping branch
offices  and  other  facilities  and  premises  of the corporation, [and
interest and principal on bonds,] notes  or  other  obligations  of  the
corporation issued to finance the acquisition, construction or equipment
of such offices, facilities or premises.
  15.  "VENDOR OPERATOR." THE VENDOR OPERATOR SHALL BE SELECTED PURSUANT
TO THE PROVISIONS SET FORTH IN SECTION SIX HUNDRED TWENTY-FIVE  OF  THIS
ARTICLE AND SHALL BE RESPONSIBLE FOR THE ADMINISTRATION AND OPERATION OF
THE CORPORATION.
  S 2. Section 603 of the racing, pari-mutuel wagering and breeding law,
as  amended  by  chapter  115 of the laws of 2008, is amended to read as
follows:
  S 603. New York city off-track betting corporation. 1.  A  corporation
to  be  known  as  the  "New York city off-track betting corporation" is
hereby created. Such corporation shall be a body corporate  and  politic

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08961-03-1

S. 3334                             2

constituting  a  public  benefit corporation. It shall be [administered]
OVERSEEN by a board of directors consisting of five members, who may  be
public officers, appointed by the governor for fixed terms as hereinaft-
er provided, one of whom shall be appointed on the recommendation of the
temporary president of the senate, and one of whom shall be appointed on
the recommendation of the speaker of the assembly.
  2.  THE TERMS OF ALL DIRECTORS SERVING A TERM THAT ENCOMPASSED JANUARY
TWENTY-FIFTH, TWO THOUSAND ELEVEN, SHALL BE DEEMED TO HAVE  EXPIRED  AND
NEW  DIRECTORS  SHALL  BE  APPOINTED.  Of  the  directors,  one shall be
appointed for a term  ending  on  December  thirty-first,  two  thousand
[nine] ELEVEN, one for a term ending on December thirty-first, two thou-
sand  [ten]  TWELVE, one for a term ending on December thirty-first, two
thousand [twelve] THIRTEEN, and  the  two  directors  appointed  on  the
recommendation  of the temporary president of the senate and the speaker
of the assembly, for a term ending December thirty-first,  two  thousand
fourteen.  Upon  the  expiration  of  such terms, the terms of office of
their successors shall be six years. Vacancies occurring otherwise  than
by expiration of term shall be filled for the unexpired term.
  3. The governor shall designate one of the directors to be chairman of
the  board  of directors and may at his pleasure, change his designation
of any such director to be chairman.
  4. Each director shall continue to serve  until  the  appointment  and
qualification of his successor.
  5.  The  directors  shall be removable for cause by the governor, upon
charges and after a hearing.
  6. The [powers] OVERSIGHT of the corporation shall be  vested  in  and
exercised  by  the  board  at a meeting duly held at a time fixed by any
by-law adopted by the board, or at any duly adjourned  meeting  of  such
meeting  or  at  any  meeting  held upon reasonable notice to all of the
directors, or upon written waiver thereof, and a majority of  the  whole
number  of  directors  shall constitute a quorum[; provided that neither
the business nor the powers of the corporation shall  be  transacted  or
exercised  except  pursuant to the favorable vote of at least a majority
of the directors present at a meeting at which a quorum  is  in  attend-
ance].
  7.  The  board may delegate to one or more of the directors, officers,
agents or employees of the corporation such powers and duties as it  may
deem proper.
  8.  The  directors  shall be reimbursed for their actual and necessary
expenses incurred in the performance of their official duties.
  9. The directors may engage in outside employment or in  a  profession
or  business  EXCEPT  AS  AN EXECUTIVE OR LEGISLATIVE EMPLOYEE OR unless
otherwise prohibited from doing so by virtue of holding  another  public
office  subject to the provisions of section seventy-three of the public
officers law.
  10. The board shall hold an annual meeting.
  11. The fiscal year of the corporation shall be the same as  [that  of
the  city,  provided,  however,  that  the corporation shall have a nine
month fiscal year from July first,  two  thousand  eight  through  March
thirty-first,  two thousand nine, and then the fiscal year of the corpo-
ration shall be the same as] the state.
  12. THE CORPORATION WILL BE ADMINISTERED BY THE  VENDOR  OPERATOR  AND
THE POWERS OF THE CORPORATION SHALL BE VESTED IN THE VENDOR OPERATOR.
  S  3. Section 617 of the racing, pari-mutuel wagering and breeding law
is amended to read as follows:

S. 3334                             3

  S 617. Exemption from taxation. [1.] The moneys and  property  of  the
corporation  and  any property under its jurisdiction, control or super-
vision, and all of its activities and operations shall  be  exempt  from
taxation.
  [2. The state covenants with the purchasers of and with all subsequent
holders  and  transferees  of  bonds and notes issued by the corporation
pursuant to this article, in consideration  of  the  acceptance  of  and
payment  for the said bonds and notes, that the said bonds and notes and
the income therefrom, and all moneys, funds and revenue pledged  to  pay
or  secure the payment of such bonds and notes shall at all time be free
from taxation, except for estate and gift taxes and taxes on transfers.]
  S 4. The opening paragraph of section 621 of the  racing,  pari-mutuel
wagering  and  breeding  law,  as  amended by chapter 115 of the laws of
2008, is amended to read as follows:
  Within one hundred twenty days after the end of the fiscal year of the
corporation, the [directors thereof] VENDOR OPERATOR shall submit to the
governor, the legislature, the racing and wagering board and  the  state
comptroller a complete and detailed report setting forth:
  S  5.  The racing, pari-mutuel wagering and breeding law is amended by
adding a new section 625 to read as follows:
  S 625. SELECTION OF VENDOR OPERATOR. 1. THE NEW YORK STATE RACING  AND
WAGERING  BOARD  SHALL SUBMIT, WITHIN THIRTY DAYS AFTER THESE PROVISIONS
BECOME  LAW,  A  REQUEST  FOR  PROPOSALS  FROM  QUALIFYING  ENTITIES  AS
DESCRIBED  HEREIN  FOR  THE  PURPOSE OF THE ADMINISTRATING OF THE CORPO-
RATION. THE ENTITY CHOSEN TO ADMINISTER THE CORPORATION SHALL ENTER INTO
A CONTRACT WITH THE STATE FOR A TERM OF TEN YEARS, WHICH MAY BE  RENEWED
SUBJECT  TO  THE APPROVAL OF THE STATE RACING AND WAGERING BOARD AND THE
APPROVAL OF THE NEW YORK CITY OFF-TRACK BETTING BOARD OF DIRECTORS.
  2. ELIGIBLE ENTITIES SHALL CONSIST  OF  INDIVIDUALS,  PARTNERSHIPS  OR
CORPORATIONS  WHICH  ARE REQUIRED AS PART OF THEIR PROPOSAL TO SUBMIT AT
LEAST ONE BUSINESS PLAN FOR THE RE-ESTABLISHMENT AND CONTINUATION  OF  A
PROFITABLE  CORPORATION.  IN AWARDING THE CONTRACT, THE STATE RACING AND
WAGERING BOARD MUST CONSIDER THE FOLLOWING CRITERIA WITH RESPECT TO EACH
APPLICANT: ITS EXPERIENCE IN MANAGING SUCCESSFUL  BUSINESS  ENTERPRISES,
ITS EXPERIENCE IN THE RACING INDUSTRY, ITS EXPERIENCE IN THE PARI-MUTUEL
AND/OR OFF-TRACK BETTING INDUSTRIES, ITS EXPERIENCE IN THE ENTERTAINMENT
INDUSTRY,  THE  FEASIBILITY  OF ITS PROPOSED BUSINESS PLAN OR PLANS, AND
ITS COMMITMENT TO USE ITS BEST EFFORTS TO SUPPORT THE VIABILITY OF  OFF-
TRACK  BETTING  IN  THE  CITY OF NEW YORK AS WELL AS THE RACING INDUSTRY
THROUGHOUT THE STATE.
  3. ALL BUSINESS PLANS SUBMITTED BY AN ENTITY MUST  INCLUDE  PROVISIONS
FOR  PRIORITY FOR CONSIDERATION FOR EMPLOYMENT BY ANY FORMER EMPLOYEE OF
THE CORPORATION WHOSE EMPLOYMENT TERMINATED OTHER  THAN  FOR  CAUSE,  BY
RETIREMENT,  OR WITH A SEVERANCE AWARD. SUCH PLANS MUST ALSO PROVIDE FOR
REPRESENTATION OF OFF-TRACK BETTING BRANCH OFFICES, OR AN EQUIVALENT, IN
ALL OF THE BOROUGHS OF THE CITY OF NEW YORK, WITH PREFERENCE  GIVEN  FOR
BUSINESS  PLANS  THAT HAVE AT LEAST THREE FACILITIES IN EACH BOROUGH AND
THAT MAINTAIN THE SAME RATIO OF ACCESS TO OFF-TRACK  BETTING  FACILITIES
AS  WAS  PREVIOUSLY PROVIDED BY THE CORPORATION PRIOR TO DECEMBER FIRST,
TWO THOUSAND TEN.
  4. THE STATE RACING AND WAGERING BOARD SHALL MAKE PUBLIC ITS  PRELIMI-
NARY  SELECTION  OF THE VENDOR OPERATOR NO LATER THAN THREE MONTHS AFTER
THE SUBMISSION OF THE REQUEST FOR PROPOSALS, AND ALLOW FOR TWO WEEKS FOR
PUBLIC COMMENT. THE FINAL SELECTION AND THE CONTRACT BETWEEN THE  VENDOR
AND  THE  STATE  MUST BE FINALIZED WITHIN THIRTY DAYS OF THE PRELIMINARY

S. 3334                             4

SELECTION, BUT NO SOONER THAN THE END OF THE  TWO  WEEK  PUBLIC  COMMENT
PERIOD.
  5.  THE  SELECTION OF VENDOR MAY BE REVOKED AND CANCELLED BY THE STATE
RACING AND WAGERING BOARD FOR A MATERIAL BREACH OF  CONTRACT  OR  FOR  A
VIOLATION OF THE RULES OF THE STATE RACING AND WAGERING BOARD OR IF SUCH
VENDOR  OR  ITS  OFFICERS  OR  DIRECTORS  SHALL  KNOWINGLY  VIOLATE  THE
PROVISIONS OF THIS CHAPTER OR OF THE PENAL LAW. THE ACTION OF THE  STATE
RACING  AND WAGERING BOARD IN REVOKING THE SELECTION SHALL BE REVIEWABLE
IN THE SUPREME COURT IN THE  MANNER  PROVIDED  BY  AND  SUBJECT  TO  THE
PROVISIONS OF ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
  6.  FOR  CONTRACTS  IN EXCESS OF ONE HUNDRED THOUSAND DOLLARS, ENTERED
INTO BY THE VENDOR FOR THE PROCUREMENT OF GOODS OR SERVICES,  THE  BOARD
MAY  REVIEW  THE  CHARACTER  AND FITNESS OF THE ENTITY OR ITS PRINCIPALS
ENTERING INTO CONTRACTS WITH THE VENDOR.
  S 6. Clause (E) of subparagraph 5 and clause (F) of subparagraph 6  of
paragraph  b of subdivision 1 of section 1016 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter 18 of the laws of 2008,
are amended to read as follows:
  (E) On days when a franchised corporation 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 thorough-
bred  racing  corporation,  [two  and  eight-tenths] ONE AND FOUR-TENTHS
percent on regular and multiple bets during a regional meeting and  [one
and nine-tenths] NINETY-FIVE HUNDREDTHS percent of such bets if there is
no  regional  meeting  and  [four  and eight-tenths] TWO AND FOUR-TENTHS
percent on exotic bets on days on which there is a regional meeting  and
[three  and  four-tenths]  ONE  AND SEVEN-TENTHS percent of such bets if
there is no regional meeting.
  (ii) Such licensed regional harness track shall receive [one and  one-
half]  SEVENTY-FIVE  HUNDREDTHS  per  centum on total regional handle on
races conducted at out-of-state or out-of-country thoroughbred tracks.
  (iii) In those regions in  which  there  is  more  than  one  licensed
regional  harness  track,  if no track is accepting wagers or displaying
the live simulcast signal from the out-of-state  track,  the  total  sum
shall  be divided among the tracks in proportion to the ratio the wagers
placed on races conducted by each track bears to the corporation's total
in-region harness handle. If one or more tracks are accepting wagers  or
displaying  the live simulcast signal, the total amount shall be divided
among those tracks not accepting  wagers  or  displaying  the  simulcast
signal for an out-of-state track or in-state thoroughbred corporation or
association.
  (F)  Of  the sums retained by a licensed harness facility, [fifty] ONE
HUNDRED percent shall be used exclusively for purses  awarded  in  races
conducted  by  such  licensed  facility [and the remaining fifty percent
shall be retained by such licensed facility for  its  general  purposes,
provided,  however,  that  in  a  harness  special  betting district the
portion of the sums retained by a licensed harness facility to  be  used
for  purses or the methodology for calculating the amount to be used for
purses may be specified in a written contract between a  harness  racing
association  or  corporation  and  its representative horsemen's associ-
ation].

S. 3334                             5

  S 7. Section 1017 of the racing,  pari-mutuel  wagering  and  breeding
law, as amended by chapter 18 of the laws of 2008, is amended to read as
follows:
  S  1017.  Out-of-state  or out-of-country races. 1. Licensed simulcast
facilities may accept wagers and display the signal of  out-of-state  or
out-of-country  thoroughbred tracks after 7Labor P.M. in accordance with
the provisions of this section.  Such  simulcasting  may  include  mixed
meetings  if  such meetings are integral to such racing programs and all
such wagering on such races shall be construed to be thoroughbred races.
For  facilities  located  within  the  special  betting  district,  such
approval  shall  also be required from a thoroughbred racing corporation
during the period a racing program is being  conducted  at  such  track.
Such  approval shall not be required on any day such thoroughbred racing
corporation is also accepting an out-of-state or  out-of-country  signal
and  wager, as authorized by this section. The provisions of section one
thousand sixteen of this article shall be applicable to the  conduct  of
such  simulcasting and the provisions of clauses (A) and (B) of subpara-
graph four of paragraph b of subdivision one  of  section  one  thousand
sixteen  of  this  article  shall  apply to those facilities licensed in
accordance with sections one thousand eight and  one  thousand  nine  of
this  article  and the provisions of clauses (A) and (B) of subparagraph
six of paragraph b of subdivision one of section one thousand sixteen of
this article shall apply to those facilities licensed in accordance with
section one thousand seven of this article, when such provisions are  in
full  force  and effect pursuant to such section. Provided, however, the
provisions of section one thousand fourteen of  this  article  shall  be
applicable to the conduct of such simulcasting, when such provisions are
in full force and effect pursuant to such section.
  2.  a.  Maintenance of effort. 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] purs-
es made by such off-track corporation  pursuant  to  the  provisions  of
section  one  thousand fifteen of this article during the year two thou-
sand two, 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 one thousand fifteen of this article.
  b.  Additional payments. During each calendar year, to the extent, and
at such time in the event,  that  aggregate  statewide  wagering  handle
after  7Labor P.M. on out-of-state and out-of-country thoroughbred races
exceeds one hundred million dollars, each off-track betting  corporation
conducting  such simulcasting shall pay to its regional harness track or
tracks, an amount equal to [two] ONE percent of its proportionate  share
of  such  excess  handle.  In  any  region  where  there are two or more
regional harness tracks, such two percent 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  calen-
dar year. [Fifty percent of the] THE sum received by each track pursuant
to  this  paragraph  shall  be  used  exclusively for increasing purses,
stakes and prizes at that regional harness track.

S. 3334                             6

  S 8. Subdivision 2 of section 529 of the racing, pari-mutuel  wagering
and breeding law is amended to read as follows:
  2.  [Ninety-five  percent  of  the  balance  of such account remaining
unclaimed as of the last day of February of such year shall be  paid  to
the state tax commission by March fifteenth. On or before April tenth of
each  year  the  balance of such account and any other unclaimed amounts
received in the course of conducting off-track betting shall be paid  by
such  corporation to the state tax commission. A penalty of five percent
and interest at the rate of one percent per month from the due  date  to
the  date  of  payment  of  the unclaimed balance due March fifteenth or
April tenth, as the case may be, shall be payable in case  such  balance
is  not  paid  when  due.  Such  amounts,  interest  and  penalties when
collected by the state tax commission shall be deposited into the gener-
al fund of the state treasury] ON APRIL FIRST OF EACH YEAR,  THE  AMOUNT
OF  TICKETS  REMAINING  UNCLAIMED  FROM  THE  PRIOR YEAR MAY BE USED FOR
CORPORATE PURPOSES.
  S 9. Subdivision 7 of section 532 of the racing, pari-mutuel  wagering
and  breeding  law,  as  added  by  chapter  115 of the laws of 2008, is
amended to read as follows:
  7. Notwithstanding any other provision of this section,  any  payments
otherwise  payable  to  a city with a population of one million or more,
pursuant to this section, [other than payments pursuant to subparagraphs
(i) and (iii) of paragraph b of subdivision three of this section, shall
be payable to the corporation and shall be available for  its  corporate
purposes] SHALL PAY REMAINING AMOUNTS TO THE COMPTROLLER OF THE STATE OF
NEW  YORK FOR DEPOSIT IN THE NEW YORK CITY OFF-TRACK BETTING CORPORATION
FUND.
  S 10. Subdivision 2 of section 610 of the racing, pari-mutuel wagering
and breeding law, as amended by chapter 115 of  the  laws  of  2008,  is
amended to read as follows:
  2.  All moneys due the city pursuant to article five-A of this chapter
shall be paid to the  New  York  city  [comptroller]  OFF-TRACK  BETTING
CORPORATION FUND.
  S 11. Subdivision 6 of section 527 of the racing, pari-mutuel wagering
and  breeding  law,  as  amended  by chapter 115 of the laws of 2008, is
amended to read as follows:
  6. The net amount remaining to each regional corporation after payment
of taxes and distributions pursuant to this section and after payment of
operating expenses and principal and interest on any obligations  shall,
in  the  case  of  the  New  York city off-track betting corporation, be
retained by the corporation, and in the case of  other  regional  corpo-
rations  shall  accrue and be payable to participating counties pursuant
to section five hundred sixteen of this chapter; provided, however, that
the New York city off-track betting corporation, after  payment  of  all
current  taxes  and  distributions  shall use such net amount to pay all
liabilities of such corporation as of [the effective date of the chapter
of the laws of] JUNE SEVENTEENTH, two thousand eight [which amended this
subdivision], and at such time as all liabilities have  been  paid  such
corporation  shall pay remaining amounts to the comptroller of the state
of New York for deposit in the [general fund of the state] NEW YORK CITY
OFF-TRACK BETTING CORPORATION FUND.
  S 12. The racing, pari-mutuel wagering and breeding law is amended  by
adding a new section 626 to read as follows:
  S  626. VENDOR OPERATOR FEE. AS CONSIDERATION FOR THE OPERATION OF THE
CORPORATION, THE COMPTROLLER SHALL PAY A VENDOR FEE IN EXCHANGE FOR  THE
DAILY OPERATIONS AND CAPITALIZATION OF A NEW YORK CITY OFF-TRACK BETTING

S. 3334                             7

OPERATION  TO  BE  PAID AS FOLLOWS:   IF THE ANNUAL DEPOSIT INTO THE NEW
YORK CITY OFF-TRACK BETTING  CORPORATION  FUND  IS  LESS  THAN  TWO  AND
ONE-HALF  MILLION DOLLARS, THE VENDOR OPERATOR SHALL RECEIVE ONE HUNDRED
PERCENT  OF THE ANNUAL DEPOSITS; IF THE ANNUAL DEPOSIT INTO THE NEW YORK
CITY OFF-TRACK BETTING CORPORATION FUND IS LESS THAN  OR  EQUAL  TO  TEN
MILLION  DOLLARS,  THE  VENDOR  OPERATOR  SHALL BE PAID TWO AND ONE-HALF
MILLION DOLLARS AND THE REMAINING FUNDS SHALL BE DEPOSITED TO THE  STATE
GENERAL  FUND;  IF  THE ANNUAL DEPOSIT IS MORE THAN TEN MILLION DOLLARS,
THE VENDOR OPERATOR SHALL BE PAID TWENTY-FIVE PERCENT OF THE TOTAL ANNU-
AL DEPOSITS AND THE REMAINING FUNDS SHALL  BE  DEPOSITED  TO  THE  STATE
GENERAL FUND.
  S 13. The state finance law is amended by adding a new section 97-kkkk
to read as follows:
  S 97-KKKK. NEW YORK CITY OFF-TRACK BETTING CORPORATION FUND. 1.  THERE
IS  HEREBY ESTABLISHED IN THE CUSTODY OF THE COMPTROLLER, A SPECIAL FUND
TO BE KNOWN AS THE "NEW YORK CITY OFF-TRACK BETTING CORPORATION FUND".
  2. SUCH FUND SHALL CONSIST OF ALL MONIES RECEIVED BY THE STATE  PURSU-
ANT TO SUBDIVISION SIX OF SECTION FIVE HUNDRED TWENTY-SEVEN AND SUBDIVI-
SION SEVEN OF SECTION FIVE HUNDRED THIRTY-TWO OF THE RACING, PARI-MUTUEL
WAGERING  AND  BREEDING  LAW.  ANY  INTEREST EARNED BY THE INVESTMENT OF
MONEYS IN SUCH FUND SHALL BE ADDED TO SUCH FUND, BECOME A PART  OF  SUCH
FUND, AND BE USED FOR THE PURPOSE OF SUCH FUND.
  3.  MONEYS  OF  THE  NEW  YORK CITY OFF-TRACK BETTING CORPORATION FUND
SHALL BE MADE AVAILABLE TO THE COMPTROLLER FOR THE PURPOSE OF PAYING THE
NEW YORK CITY OFF-TRACK BETTING VENDOR OPERATOR FEE DISTRIBUTED  ACCORD-
ING  TO SECTION SIX HUNDRED TWENTY-SIX OF THE RACING, PARI-MUTUEL WAGER-
ING AND BREEDING LAW; ALL REMAINING MONEY SHALL BE  DISBURSED  INTO  THE
STATE GENERAL FUND.
  S  14. The racing, pari-mutuel wagering and breeding law is amended by
adding a new section 113 to read as follows:
  S 113. TELEPHONE AND INTERNET WAGERING. THE STATE RACING AND  WAGERING
BOARD SHALL DETERMINE WHETHER ELIMINATING OR REGULATING THE AUTHORITY OF
OUT-OF-STATE  ENTITIES TO ACCEPT TELEPHONE AND/OR INTERNET WAGERING FROM
NEW YORK STATE RESIDENTS PLACED  WHILE  IN  NEW  YORK  STATE,  WOULD  BE
CONSISTENT  WITH  THE  OBJECTIVES  OF  OFF-TRACK  PARI-MUTUEL BETTING AS
DEFINED IN SECTION FIVE HUNDRED EIGHTEEN OF  THIS  CHAPTER,  AND  IF  SO
DETERMINED,  THE  STATE  RACING  AND WAGERING BOARD SHALL ESTABLISH SUCH
GENERAL  REGULATIONS  TO  ELIMINATE  OR   REGULATE   THE   PRACTICE   OF
OUT-OF-STATE ENTITIES OF ACCEPTING SUCH WAGERS.
  S 15. Subdivision 4 of section 606 of the racing, pari-mutuel wagering
and  breeding  law,  as  amended  by chapter 115 of the laws of 2008, is
amended to read as follows:
  4. All [employees and officers] PRESENT AND  FUTURE  RETIREES  of  the
corporation  in  classes  or  positions  whose incumbents, in equivalent
classes or positions of the city, are eligible, as of the effective date
hereof, to participate in, and receive benefits from any city authorized
health insurance or  welfare  benefit  program,  shall  be  eligible  to
participate  in,  and receive benefits from any such health insurance or
welfare benefit program; provided, however, that the [corporation] STATE
shall reimburse the city or its designee for the actual cost of benefits
under this subdivision.
  S 16. Subdivisions 4 and 5 of section 610 of the  racing,  pari-mutuel
wagering and breeding law are REPEALED.
  S 17. Section 611 of the racing, pari-mutuel wagering and breeding law
is REPEALED.

S. 3334                             8

  S 18. Section 612 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 19. Section 613 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 20. Section 614 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 21. Section 616 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 22. Section 620 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 23. This act shall take effect immediately.

Co-Sponsors

S3334A - Bill Details

Current Committee:
Law Section:
Racing, Pari-Mutuel Wagering and Breeding Law
Laws Affected:
Rpld §610 sub 4 & 5, §§611, 612, 613, 614, 616 & 620, amd RWB L, generally; add §95-h, St Fin L

S3334A - Bill Texts

view summary

Relates to the New York city off-track betting corporation and establishes the New York city off-track betting corporation fund.

view sponsor memo
BILL NUMBER:S3334A

TITLE OF BILL:
An act
to amend the racing, pari-mutuel wagering and breeding law and the state
finance law, in relation to the New York city off-track betting
corporation and establishing the New York city off-track betting
corporation fund; and to repeal certain provisions of the racing,
pari-mutuel wagering and breeding law relating thereto

PURPOSE:
This bill would allow a vendor selected by an RFP process, to run the
New York City off-track betting corporation and resume operations in
a manner that would support the New York state horse racing industry.

SUMMARY OF PROVISIONS:
Section 1. Amends section 602 of the racing, pari-mutual wagering and
breeding law (RPWBL) to add a new term "vendor operator" to the
definitions and to remove the reference to bonds in the definition of
"cost of corporation's functions".

Section 2. Amends section 603 of the RPWBL to change the board of
directors' function from administration to oversight of the New York
city off-track betting corporation ("NYCOTB"); to give the duties of
administration of the NYCOTB to the vendor operator; to terminate the
terms of current board members; to appoint a new board; and to
exclude current executive and legislative employees from serving as
board members.

Section 3. Amends section 617 or the RPWBL to remove reference to
bonds and notes.

Section 4. Amends section 621 of the RPWBL to transfer the duty to
provide an annual report from the board of directors to the vendor
operator.

Section 5. Creates a new section 625 of the RPWBL to provide the
process for selecting a vendor operator.

Section 6. Amends clauses of section 1016 of the RPWBL to eliminate
the requirement that off-track betting corporations ("OTBs") pay all
other Dark Day payments to licensed regional harness tracks in New
York State, but keeps in place the existing portion of the payments
which flow to the horsemen and breeders.

Section 7. Amends section 1017 of the RPWBL § 1017(2) to eliminate the
requirement that OTBs pay Maintenance of Effort and hold harmless
payments to licensed regional harness tracks in New York State, but
requires that the portion of such payments which were made to the
horsemen and breeders will continue to be made.

Section 8. Amends section 529 of the RPWBL to allow all off-track
betting corporations to retain their uncashed tickets.

Section 9. Amends section 523 of the
RPWBL to redirect all local


payments derived from NYCOB and other OTBs that previously went
to the City of New York, be deposited in the newly created New York
City off-track betting corporation fund.

Section 10. Amends section 610 of the RPWBL to redirect NYCOTB to
deposit all payment collections previously owed to New York City into
the newly created New York City off-track betting corporation fund.

Section 11. Amends section 527 of the RPWBL § 527 to direct all
proceeds after payment of operating expenses be deposited into the
newly created New York City Off Track Betting Corporation fund;
clarifies that the vendor operator is not responsible for any
"liabilities" of NYC OTB.

Section 12. Creates a new section 626 of the RPWBL to create a vendor
operator fee to be paid to the vendor who is selected to operate
NYCOTB.

Section 13. Creates a new section 97-kkkk of the State Finance Law to
create the New York City Off Track Betting Corporation fund.

Section 14. Creates a new section 114 of the RPWBL to direct the New
York State Racing and Wagering Board to make a determination as to
whether out-of-state internet wagering sites taking wagers from New
York residents have a detrimental effect on the racing industry, and
if such a detriment exists, authorize the Board to eliminate or
regulate the practice.

Section 15. Clarifies the State's obligation to reimburse the City of
New York for the cost of health insurance for eligible retirees of
NYCOTB.

Sections 15-23. Repeal sections of RPWBL {subdivisions 4 and 5 of
§610; §§611,612, 613, 614, 616 and 620 that refer to NYCOTB's former
ability to seek bonding.

Section 24. Provides for an immediate effective date.

BUDGET IMPLICATIONS:
This bill would lower state finances by $5.7 million in SFY 2011-12.
The $4.4 million in additional revenues from the pari-mutuel taxes and
a redirection of New York City's OTB payments to the state would be
offset by a New York City off-track betting vendor operator fee of
$2.5 million; the OTBs now keeping $3 million in uncashed tickets
that previously went to the State; and $4.6 million in reimbursements
to New York City for paying New York City off track betting retiree
health benefits.

STATEMENT IN SUPPORT:
The closing of operations of the New York City off-track betting corpo-
ration was preventable. For years the corporation has struggled, yet
the current board of directors failed to address the factors that
hampered the success of the corporation and failed to formulate a
profitable business plan. As a public benefit corporation, integral
to the New York State racing industry, and as an employer of
hundreds, the failure of this corporation is felt by many.


Resurrecting this corporation is necessary, but only in a manner that
allows the corporation to be profitable long term.

By restructuring the corporation to allow for a vendor operator, be it
an individual, partnership, or private or public corporation, the
state will encourage the participation of the best and the brightest
of the business world to bring new ideas and new life to this
corporation. The selection process will be fair and impartial, and
open to public input. This vendor will have a vested interest in the
success of the corporation, and thus better motivated to run the
operation efficiently.

The demise of operations of the corporation did bring to light factors
that may be unfairly burdening not only NYCOTB but the other OTBs of
the state as well. This bill addresses both outdated obligations as
well as unfair competition from out-of-state entities to give all
OTBs in this state a better financial future.

EFFECTIVE DATE:
This act shall take effect immediately.

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

                                 3334--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 17, 2011
                               ___________

Introduced by Sens. LANZA, GOLDEN -- read twice and ordered printed, and
  when  printed  to  be committed to the Committee on Racing, Gaming and
  Wagering -- committee discharged, bill amended, ordered  reprinted  as
  amended and recommitted to said committee

AN  ACT  to  amend the racing, pari-mutuel wagering and breeding law and
  the state finance law, in relation to  the  New  York  city  off-track
  betting  corporation  and  establishing  the  New  York city off-track
  betting corporation fund; and to  repeal  certain  provisions  of  the
  racing, pari-mutuel wagering and breeding law relating thereto

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

  Section 1. Subdivision 9 of section 602  of  the  racing,  pari-mutuel
wagering  and  breeding  law,  as  amended by chapter 115 of the laws of
2008, is amended and a new subdivision 15 is added to read as follows:
  9. "Cost of corporation's functions." All costs and expenses  incurred
by  the  corporation in connection with the performance of the functions
of the corporation, including, but not limited to, operating expenses of
the corporation, the cost of acquiring, constructing or equipping branch
offices and other facilities  and  premises  of  the  corporation,  [and
interest  and  principal  on  bonds,]  notes or other obligations of the
corporation issued to finance the acquisition, construction or equipment
of such offices, facilities or premises.
  15. "VENDOR OPERATOR." THE VENDOR OPERATOR SHALL BE SELECTED  PURSUANT
TO  THE  PROVISIONS SET FORTH IN SECTION SIX HUNDRED TWENTY-FIVE OF THIS
ARTICLE AND SHALL BE RESPONSIBLE FOR THE ADMINISTRATION AND OPERATION OF
THE CORPORATION.
  S 2. Section 603 of the racing, pari-mutuel wagering and breeding law,
as amended by chapter 115 of the laws of 2008, is  amended  to  read  as
follows:
  S  603.  New York city off-track betting corporation. 1. A corporation
to be known as the "New York  city  off-track  betting  corporation"  is

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08961-04-1

S. 3334--A                          2

hereby  created.  Such corporation shall be a body corporate and politic
constituting a public benefit corporation. It  shall  be  [administered]
OVERSEEN  by a board of directors consisting of five members, who may be
public officers, appointed by the governor for fixed terms as hereinaft-
er provided, one of whom shall be appointed on the recommendation of the
temporary president of the senate, and one of whom shall be appointed on
the recommendation of the speaker of the assembly.
  2.  THE TERMS OF ALL DIRECTORS SERVING A TERM THAT ENCOMPASSED JANUARY
TWENTY-FIFTH, TWO THOUSAND ELEVEN, SHALL BE DEEMED TO HAVE  EXPIRED  AND
NEW  DIRECTORS  SHALL  BE  APPOINTED.  Of  the  directors,  one shall be
appointed for a term  ending  on  December  thirty-first,  two  thousand
[nine] ELEVEN, one for a term ending on December thirty-first, two thou-
sand  [ten]  TWELVE, one for a term ending on December thirty-first, two
thousand [twelve] THIRTEEN, and  the  two  directors  appointed  on  the
recommendation  of the temporary president of the senate and the speaker
of the assembly, for a term ending December thirty-first,  two  thousand
fourteen.  Upon  the  expiration  of  such terms, the terms of office of
their successors shall be six years. Vacancies occurring otherwise  than
by expiration of term shall be filled for the unexpired term.
  3. The governor shall designate one of the directors to be chairman of
the  board  of directors and may at his pleasure, change his designation
of any such director to be chairman.
  4. Each director shall continue to serve  until  the  appointment  and
qualification of his successor.
  5.  The  directors  shall be removable for cause by the governor, upon
charges and after a hearing.
  6. The [powers] OVERSIGHT of the corporation shall be  vested  in  and
exercised  by  the  board  at a meeting duly held at a time fixed by any
by-law adopted by the board, or at any duly adjourned  meeting  of  such
meeting  or  at  any  meeting  held upon reasonable notice to all of the
directors, or upon written waiver thereof, and a majority of  the  whole
number  of  directors  shall constitute a quorum[; provided that neither
the business nor the powers of the corporation shall  be  transacted  or
exercised  except  pursuant to the favorable vote of at least a majority
of the directors present at a meeting at which a quorum  is  in  attend-
ance].
  7.  The  board may delegate to one or more of the directors, officers,
agents or employees of the corporation such powers and duties as it  may
deem proper.
  8.  The  directors  shall be reimbursed for their actual and necessary
expenses incurred in the performance of their official duties.
  9. The directors may engage in outside employment or in  a  profession
or  business  EXCEPT  AS  AN EXECUTIVE OR LEGISLATIVE EMPLOYEE OR unless
otherwise prohibited from doing so by virtue of holding  another  public
office  subject to the provisions of section seventy-three of the public
officers law.
  10. The board shall hold an annual meeting.
  11. The fiscal year of the corporation shall be the same as  [that  of
the  city,  provided,  however,  that  the corporation shall have a nine
month fiscal year from July first,  two  thousand  eight  through  March
thirty-first,  two thousand nine, and then the fiscal year of the corpo-
ration shall be the same as] the state.
  12. THE CORPORATION WILL BE ADMINISTERED BY THE  VENDOR  OPERATOR  AND
THE POWERS OF THE CORPORATION SHALL BE VESTED IN THE VENDOR OPERATOR.
  S  3. Section 617 of the racing, pari-mutuel wagering and breeding law
is amended to read as follows:

S. 3334--A                          3

  S 617. Exemption from taxation. [1.] The moneys and  property  of  the
corporation  and  any property under its jurisdiction, control or super-
vision, and all of its activities and operations shall  be  exempt  from
taxation.
  [2. The state covenants with the purchasers of and with all subsequent
holders  and  transferees  of  bonds and notes issued by the corporation
pursuant to this article, in consideration  of  the  acceptance  of  and
payment  for the said bonds and notes, that the said bonds and notes and
the income therefrom, and all moneys, funds and revenue pledged  to  pay
or  secure the payment of such bonds and notes shall at all time be free
from taxation, except for estate and gift taxes and taxes on transfers.]
  S 4. The opening paragraph of section 621 of the  racing,  pari-mutuel
wagering  and  breeding  law,  as  amended by chapter 115 of the laws of
2008, is amended to read as follows:
  Within one hundred twenty days after the end of the fiscal year of the
corporation, the [directors thereof] VENDOR OPERATOR shall submit to the
governor, the legislature, the racing and wagering board and  the  state
comptroller a complete and detailed report setting forth:
  S  5.  The racing, pari-mutuel wagering and breeding law is amended by
adding a new section 625 to read as follows:
  S 625. SELECTION OF VENDOR OPERATOR. 1. THE NEW YORK STATE RACING  AND
WAGERING  BOARD  SHALL SUBMIT, WITHIN THIRTY DAYS AFTER THESE PROVISIONS
BECOME  LAW,  A  REQUEST  FOR  PROPOSALS  FROM  QUALIFYING  ENTITIES  AS
DESCRIBED  HEREIN  FOR  THE  PURPOSE OF THE ADMINISTRATING OF THE CORPO-
RATION. THE ENTITY CHOSEN TO ADMINISTER THE CORPORATION SHALL ENTER INTO
A CONTRACT WITH THE STATE FOR A TERM OF TEN YEARS, WHICH MAY BE  RENEWED
SUBJECT  TO  THE APPROVAL OF THE STATE RACING AND WAGERING BOARD AND THE
APPROVAL OF THE NEW YORK CITY OFF-TRACK BETTING BOARD OF DIRECTORS.
  2. ELIGIBLE ENTITIES SHALL CONSIST  OF  INDIVIDUALS,  PARTNERSHIPS  OR
CORPORATIONS,  PUBLIC  OR  PRIVATE,  WHICH ARE REQUIRED AS PART OF THEIR
PROPOSAL TO SUBMIT AT LEAST ONE BUSINESS PLAN FOR  THE  RE-ESTABLISHMENT
AND  CONTINUATION OF A PROFITABLE CORPORATION. IN AWARDING THE CONTRACT,
THE STATE RACING AND WAGERING BOARD MUST CONSIDER THE FOLLOWING CRITERIA
WITH RESPECT TO EACH APPLICANT: ITS EXPERIENCE  IN  MANAGING  SUCCESSFUL
BUSINESS ENTERPRISES, ITS EXPERIENCE IN THE RACING INDUSTRY, ITS EXPERI-
ENCE IN THE PARI-MUTUEL AND/OR OFF-TRACK BETTING INDUSTRIES, ITS EXPERI-
ENCE  IN  THE  ENTERTAINMENT  INDUSTRY,  THE FEASIBILITY OF ITS PROPOSED
BUSINESS PLAN OR PLANS, AND ITS COMMITMENT TO USE ITS  BEST  EFFORTS  TO
SUPPORT  THE  VIABILITY  OF OFF-TRACK BETTING IN THE CITY OF NEW YORK AS
WELL AS THE RACING INDUSTRY THROUGHOUT THE STATE.
  3. ALL BUSINESS PLANS SUBMITTED BY AN ENTITY MUST  INCLUDE  PROVISIONS
FOR  PRIORITY FOR CONSIDERATION FOR EMPLOYMENT BY ANY FORMER EMPLOYEE OF
THE CORPORATION WHOSE EMPLOYMENT TERMINATED OTHER  THAN  FOR  CAUSE,  BY
RETIREMENT,  OR WITH A SEVERANCE AWARD. SUCH PLANS MUST ALSO PROVIDE FOR
REPRESENTATION OF OFF-TRACK BETTING BRANCH OFFICES, OR AN EQUIVALENT, IN
ALL OF THE BOROUGHS OF THE CITY OF NEW YORK, WITH PREFERENCE  GIVEN  FOR
BUSINESS  PLANS  THAT HAVE AT LEAST THREE FACILITIES IN EACH BOROUGH AND
THAT MAINTAIN THE SAME RATIO OF ACCESS TO OFF-TRACK  BETTING  FACILITIES
AS  WAS  PREVIOUSLY PROVIDED BY THE CORPORATION PRIOR TO DECEMBER FIRST,
TWO THOUSAND TEN.
  4. THE STATE RACING AND WAGERING BOARD SHALL MAKE PUBLIC ITS  PRELIMI-
NARY  SELECTION  OF THE VENDOR OPERATOR NO LATER THAN THREE MONTHS AFTER
THE SUBMISSION OF THE REQUEST FOR PROPOSALS, AND ALLOW FOR TWO WEEKS FOR
PUBLIC COMMENT. THE FINAL SELECTION AND THE CONTRACT BETWEEN THE  VENDOR
AND  THE  STATE  MUST BE FINALIZED WITHIN THIRTY DAYS OF THE PRELIMINARY

S. 3334--A                          4

SELECTION, BUT NO SOONER THAN THE END OF THE  TWO  WEEK  PUBLIC  COMMENT
PERIOD.
  5.  THE  SELECTION OF VENDOR MAY BE REVOKED AND CANCELLED BY THE STATE
RACING AND WAGERING BOARD FOR A MATERIAL BREACH OF  CONTRACT  OR  FOR  A
VIOLATION OF THE RULES OF THE STATE RACING AND WAGERING BOARD OR IF SUCH
VENDOR  OR  ITS  OFFICERS  OR  DIRECTORS  SHALL  KNOWINGLY  VIOLATE  THE
PROVISIONS OF THIS CHAPTER OR OF THE PENAL LAW. THE ACTION OF THE  STATE
RACING  AND WAGERING BOARD IN REVOKING THE SELECTION SHALL BE REVIEWABLE
IN THE SUPREME COURT IN THE  MANNER  PROVIDED  BY  AND  SUBJECT  TO  THE
PROVISIONS OF ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
  6.  FOR  CONTRACTS  IN EXCESS OF ONE HUNDRED THOUSAND DOLLARS, ENTERED
INTO BY THE VENDOR FOR THE PROCUREMENT OF GOODS OR SERVICES,  THE  BOARD
MAY  REVIEW  THE  CHARACTER  AND FITNESS OF THE ENTITY OR ITS PRINCIPALS
ENTERING INTO CONTRACTS WITH THE VENDOR.
  S 6. Clause (E) of subparagraph 5 and clause (F) of subparagraph 6  of
paragraph  b of subdivision 1 of section 1016 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter 18 of the laws of 2008,
are amended to read as follows:
  (E) On days when a franchised corporation 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 thorough-
bred  racing  corporation,  [two  and  eight-tenths] ONE AND FOUR-TENTHS
percent on regular and multiple bets during a regional meeting and  [one
and nine-tenths] NINETY-FIVE HUNDREDTHS percent of such bets if there is
no  regional  meeting  and  [four  and eight-tenths] TWO AND FOUR-TENTHS
percent on exotic bets on days on which there is a regional meeting  and
[three  and  four-tenths]  ONE  AND SEVEN-TENTHS percent of such bets if
there is no regional meeting.
  (ii) Such licensed regional harness track shall receive [one and  one-
half]  SEVENTY-FIVE  HUNDREDTHS  per  centum on total regional handle on
races conducted at out-of-state or out-of-country thoroughbred tracks.
  (iii) In those regions in  which  there  is  more  than  one  licensed
regional  harness  track,  if no track is accepting wagers or displaying
the live simulcast signal from the out-of-state  track,  the  total  sum
shall  be divided among the tracks in proportion to the ratio the wagers
placed on races conducted by each track bears to the corporation's total
in-region harness handle. If one or more tracks are accepting wagers  or
displaying  the live simulcast signal, the total amount shall be divided
among those tracks not accepting  wagers  or  displaying  the  simulcast
signal for an out-of-state track or in-state thoroughbred corporation or
association.
  (F)  Of  the sums retained by a licensed harness facility, [fifty] ONE
HUNDRED percent shall be used exclusively for purses  awarded  in  races
conducted  by  such  licensed  facility [and the remaining fifty percent
shall be retained by such licensed facility for  its  general  purposes,
provided,  however,  that  in  a  harness  special  betting district the
portion of the sums retained by a licensed harness facility to  be  used
for  purses or the methodology for calculating the amount to be used for
purses may be specified in a written contract between a  harness  racing
association  or  corporation  and  its representative horsemen's associ-
ation].

S. 3334--A                          5

  S 7. Section 1017 of the racing,  pari-mutuel  wagering  and  breeding
law, as amended by chapter 18 of the laws of 2008, is amended to read as
follows:
  S  1017.  Out-of-state  or out-of-country races. 1. Licensed simulcast
facilities may accept wagers and display the signal of  out-of-state  or
out-of-country  thoroughbred tracks after 7Labor P.M. in accordance with
the provisions of this section.  Such  simulcasting  may  include  mixed
meetings  if  such meetings are integral to such racing programs and all
such wagering on such races shall be construed to be thoroughbred races.
For  facilities  located  within  the  special  betting  district,  such
approval  shall  also be required from a thoroughbred racing corporation
during the period a racing program is being  conducted  at  such  track.
Such  approval shall not be required on any day such thoroughbred racing
corporation is also accepting an out-of-state or  out-of-country  signal
and  wager, as authorized by this section. The provisions of section one
thousand sixteen of this article shall be applicable to the  conduct  of
such  simulcasting and the provisions of clauses (A) and (B) of subpara-
graph four of paragraph b of subdivision one  of  section  one  thousand
sixteen  of  this  article  shall  apply to those facilities licensed in
accordance with sections one thousand eight and  one  thousand  nine  of
this  article  and the provisions of clauses (A) and (B) of subparagraph
six of paragraph b of subdivision one of section one thousand sixteen of
this article shall apply to those facilities licensed in accordance with
section one thousand seven of this article, when such provisions are  in
full  force  and effect pursuant to such section. Provided, however, the
provisions of section one thousand fourteen of  this  article  shall  be
applicable to the conduct of such simulcasting, when such provisions are
in full force and effect pursuant to such section.
  2.  a.  Maintenance of effort. 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] purs-
es made by such off-track corporation  pursuant  to  the  provisions  of
section  one  thousand fifteen of this article during the year two thou-
sand two, 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 one thousand fifteen of this article.
  b.  Additional payments. During each calendar year, to the extent, and
at such time in the event,  that  aggregate  statewide  wagering  handle
after  7Labor P.M. on out-of-state and out-of-country thoroughbred races
exceeds one hundred million dollars, each off-track betting  corporation
conducting  such simulcasting shall pay to its regional harness track or
tracks, an amount equal to [two] ONE percent of its proportionate  share
of  such  excess  handle.  In  any  region  where  there are two or more
regional harness tracks, such two percent 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  calen-
dar year. [Fifty percent of the] THE sum received by each track pursuant
to  this  paragraph  shall  be  used  exclusively for increasing purses,
stakes and prizes at that regional harness track.

S. 3334--A                          6

  S 8. Subdivision 2 of section 529 of the racing, pari-mutuel  wagering
and breeding law is amended to read as follows:
  2.  [Ninety-five  percent  of  the  balance  of such account remaining
unclaimed as of the last day of February of such year shall be  paid  to
the state tax commission by March fifteenth. On or before April tenth of
each  year  the  balance of such account and any other unclaimed amounts
received in the course of conducting off-track betting shall be paid  by
such  corporation to the state tax commission. A penalty of five percent
and interest at the rate of one percent per month from the due  date  to
the  date  of  payment  of  the unclaimed balance due March fifteenth or
April tenth, as the case may be, shall be payable in case  such  balance
is  not  paid  when  due.  Such  amounts,  interest  and  penalties when
collected by the state tax commission shall be deposited into the gener-
al fund of the state treasury] ON APRIL FIRST OF EACH YEAR,  THE  AMOUNT
OF  TICKETS  REMAINING  UNCLAIMED  FROM  THE  PRIOR YEAR MAY BE USED FOR
CORPORATE PURPOSES.
  S 9. Subdivision 7 of section 532 of the racing, pari-mutuel  wagering
and  breeding  law,  as  added  by  chapter  115 of the laws of 2008, is
amended to read as follows:
  7. Notwithstanding any other provision of this section,  any  payments
otherwise  payable  to  a city with a population of one million or more,
pursuant to this section, [other than payments pursuant to subparagraphs
(i) and (iii) of paragraph b of subdivision three of this section, shall
be payable to the corporation and shall be available for  its  corporate
purposes] SHALL PAY REMAINING AMOUNTS TO THE COMPTROLLER OF THE STATE OF
NEW  YORK FOR DEPOSIT IN THE NEW YORK CITY OFF-TRACK BETTING CORPORATION
FUND.
  S 10. Subdivision 2 of section 610 of the racing, pari-mutuel wagering
and breeding law, as amended by chapter 115 of  the  laws  of  2008,  is
amended to read as follows:
  2.  All moneys due the city pursuant to article five-A of this chapter
shall be paid to the  New  York  city  [comptroller]  OFF-TRACK  BETTING
CORPORATION FUND.
  S 11. Subdivision 6 of section 527 of the racing, pari-mutuel wagering
and  breeding  law,  as  amended  by chapter 115 of the laws of 2008, is
amended to read as follows:
  6. The net amount remaining to each regional corporation after payment
of taxes and distributions pursuant to this section and after payment of
operating expenses and principal and interest on any obligations  shall,
in  the  case  of  the  New  York city off-track betting corporation, be
retained by the corporation, and in the case of  other  regional  corpo-
rations  shall  accrue and be payable to participating counties pursuant
to section five hundred sixteen of this chapter; provided, however, that
the [New York city off-track betting corporation] VENDOR OPERATOR, after
payment of all current taxes and distributions shall use such net amount
to pay all [liabilities] OPERATING EXPENSES of such corporation  [as  of
the  effective  date  of  the  chapter of the laws of two thousand eight
which amended this subdivision], and at such time as  all  [liabilities]
OPERATING  EXPENSES  have  been paid, such [corporation] VENDOR OPERATOR
shall pay ANY remaining amounts to the comptroller of the state  of  New
York  for  deposit  in  the  [general  fund  of the state] NEW YORK CITY
OFF-TRACK BETTING CORPORATION FUND.
  S 12. The racing, pari-mutuel wagering and breeding law is amended  by
adding a new section 626 to read as follows:
  S  626. VENDOR OPERATOR FEE. AS CONSIDERATION FOR THE OPERATION OF THE
CORPORATION, THE COMPTROLLER SHALL PAY A VENDOR FEE IN EXCHANGE FOR  THE

S. 3334--A                          7

DAILY OPERATIONS AND CAPITALIZATION OF A NEW YORK CITY OFF-TRACK BETTING
OPERATION  TO  BE  PAID AS FOLLOWS:   IF THE ANNUAL DEPOSIT INTO THE NEW
YORK CITY OFF-TRACK BETTING  CORPORATION  FUND  IS  LESS  THAN  TWO  AND
ONE-HALF  MILLION DOLLARS, THE VENDOR OPERATOR SHALL RECEIVE ONE HUNDRED
PERCENT OF THE ANNUAL DEPOSITS; IF THE ANNUAL DEPOSIT INTO THE NEW  YORK
CITY  OFF-TRACK  BETTING  CORPORATION  FUND IS LESS THAN OR EQUAL TO TEN
MILLION DOLLARS, THE VENDOR OPERATOR SHALL  BE  PAID  TWO  AND  ONE-HALF
MILLION  DOLLARS AND THE REMAINING FUNDS SHALL BE DEPOSITED TO THE STATE
GENERAL FUND; IF THE ANNUAL DEPOSIT IS MORE THAN  TEN  MILLION  DOLLARS,
THE VENDOR OPERATOR SHALL BE PAID TWENTY-FIVE PERCENT OF THE TOTAL ANNU-
AL  DEPOSITS  AND  THE  REMAINING  FUNDS SHALL BE DEPOSITED TO THE STATE
GENERAL FUND.
  S 13. The state finance law is amended by adding a new section 97-kkkk
to read as follows:
  S 97-KKKK. NEW YORK CITY OFF-TRACK BETTING CORPORATION FUND. 1.  THERE
IS HEREBY ESTABLISHED IN THE CUSTODY OF THE COMPTROLLER, A SPECIAL  FUND
TO BE KNOWN AS THE "NEW YORK CITY OFF-TRACK BETTING CORPORATION FUND".
  2.  SUCH FUND SHALL CONSIST OF ALL MONIES RECEIVED BY THE STATE PURSU-
ANT TO SUBDIVISIONS ONE AND SIX OF SECTION FIVE HUNDRED TWENTY-SEVEN AND
SUBDIVISION SEVEN OF SECTION FIVE  HUNDRED  THIRTY-TWO  OF  THE  RACING,
PARI-MUTUEL  WAGERING  AND  BREEDING  LAW.  ANY  INTEREST  EARNED BY THE
INVESTMENT OF MONEYS IN SUCH FUND SHALL BE ADDED TO SUCH FUND, BECOME  A
PART OF SUCH FUND, AND BE USED FOR THE PURPOSE OF SUCH FUND.
  3.  MONEYS  OF  THE  NEW  YORK CITY OFF-TRACK BETTING CORPORATION FUND
SHALL BE MADE AVAILABLE TO THE COMPTROLLER FOR THE PURPOSE OF PAYING THE
NEW YORK CITY OFF-TRACK BETTING VENDOR OPERATOR FEE DISTRIBUTED  ACCORD-
ING  TO SECTION SIX HUNDRED TWENTY-SIX OF THE RACING, PARI-MUTUEL WAGER-
ING AND BREEDING LAW; ALL REMAINING MONEY SHALL BE  DISBURSED  INTO  THE
STATE GENERAL FUND.
  S  14. The racing, pari-mutuel wagering and breeding law is amended by
adding a new section 113 to read as follows:
  S 113. TELEPHONE AND INTERNET WAGERING. THE STATE RACING AND  WAGERING
BOARD SHALL DETERMINE WHETHER ELIMINATING OR REGULATING THE AUTHORITY OF
OUT-OF-STATE  ENTITIES TO ACCEPT TELEPHONE AND/OR INTERNET WAGERING FROM
NEW YORK STATE RESIDENTS PLACED  WHILE  IN  NEW  YORK  STATE,  WOULD  BE
CONSISTENT  WITH  THE  OBJECTIVES  OF  OFF-TRACK  PARI-MUTUEL BETTING AS
DEFINED IN SECTION FIVE HUNDRED EIGHTEEN OF  THIS  CHAPTER,  AND  IF  SO
DETERMINED,  THE  STATE  RACING  AND WAGERING BOARD SHALL ESTABLISH SUCH
GENERAL  REGULATIONS  TO  ELIMINATE  OR   REGULATE   THE   PRACTICE   OF
OUT-OF-STATE ENTITIES OF ACCEPTING SUCH WAGERS.
  S 15. Subdivision 4 of section 606 of the racing, pari-mutuel wagering
and  breeding  law,  as  amended  by chapter 115 of the laws of 2008, is
amended to read as follows:
  4. All [employees and officers] PRESENT AND  FUTURE  RETIREES  of  the
corporation  in  classes  or  positions  whose incumbents, in equivalent
classes or positions of the city, are eligible, as of the effective date
hereof, to participate in, and receive benefits from any city authorized
health insurance or  welfare  benefit  program,  shall  be  eligible  to
participate  in,  and receive benefits from any such health insurance or
welfare benefit program; provided, however, that the [corporation] STATE
shall reimburse the city or its designee for the actual cost of benefits
under this subdivision.
  S 16. Subdivisions 4 and 5 of section 610 of the  racing,  pari-mutuel
wagering and breeding law are REPEALED.
  S 17. Section 611 of the racing, pari-mutuel wagering and breeding law
is REPEALED.

S. 3334--A                          8

  S 18. Section 612 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 19. Section 613 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 20. Section 614 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 21. Section 616 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 22. Section 620 of the racing, pari-mutuel wagering and breeding law
is REPEALED.
  S 23. This act shall take effect immediately.

Co-Sponsors

S3334B (ACTIVE) - Bill Details

Current Committee:
Law Section:
Racing, Pari-Mutuel Wagering and Breeding Law
Laws Affected:
Rpld §610 sub 4 & 5, §§611, 612, 613, 614, 616 & 620, amd RWB L, generally; add §95-h, St Fin L

S3334B (ACTIVE) - Bill Texts

view summary

Relates to the New York city off-track betting corporation and establishes the New York city off-track betting corporation fund.

view sponsor memo
BILL NUMBER:S3334B

TITLE OF BILL:
An act
to amend the racing, pari-mutuel wagering and breeding law and the state
finance law, in relation to the New York city off-track betting
corporation and establishing the New York city off-track betting
corporation fund; and to repeal certain provisions of the racing,
pari-mutuel wagering and breeding law relating thereto

PURPOSE:
This bill would allow a vendor selected by an RFP process, to run the
New York City off-track betting corporation and resume operations in
a manner that would support the New York state horse racing industry.

SUMMARY OF PROVISIONS:
Section 1. Subdivision 9 of section 602 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter 115 of the laws of
2008.
Section 2. Section 603 of the racing of the racing, pari-mutuel
wagering and breeding law, as amended by chapter 115 of the laws of
2008.
Section 3. Section 617 of the racing, pari-mutuel wagering and
breeding law.
Section 4. The opening paragraph of section 621 of the racing,
pari-mutuel wagering and breeding law, as amended by chapter 115 of
the laws of 2008.
Section 5. The racing, pari-mutuel wagering and breeding law amended
by adding a new section 625.
Section 6. Clause (E) of subparagraph 5
and clause (F) of subparagraph 6 of the paragraph b of subdivision 1
of section 1016 of the racing, pari-mutuel wagering and breeding law,
as amended by chapter 18 of the laws of 2008.
Section 7. Section 1017 of the racing, pari-mutuel wagering and
breeding law, as amended by chapter 18 of the laws of 2008.
Section 8. Subdivision 2 of section 529 of the racing, pari-mutuel
wagering and breeding law.
Section 9. Subdivision 6 of section 527 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter 115 of the laws of
2008.
Section 10. Subdivision 2 of section 610 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter 115 of the laws of
2008.
Section 11. Subdivision 6 of section 527 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter 115 of the laws of
2008.
Section 12. The racing, pari-mutuel wagering and breeding law, as
amended by adding a new section 626.
Section 13. The state finance law is amended by adding a new section
95-h.
Section 14. The racing, pari-mutuel wagering and breeding law is

amended by adding a new section 113.
Section 15. Subdivision 4 of
section 606 of the racing, pari-mutuel wagering and breeding law, as
amended by chapter 115 of the laws of 2008.
Sections 16. Subdivisions 4 and 5 of section 610 of the racing,
pari-mutuel wagering and breeding law are REPEALED.
Section 17. Sections 611,612, 613, 614,616 and 620 of the racing,
pari-mutuel wagering and breeding law are REPEALED.
Section 28. This act shall take effect immediately.

BUDGET IMPLICATIONS:
This bill would lower state finances by $5.7 million in SFY 2011-12.
The $4-4 million in additional revenues from the pari-mutuel taxes
and are direction of New York City's OTB payments to the state would
be offset by a New York City off-track betting vendor operator fee of
$2.5 million; the OTBs now keeping $3 million in un-cashed tickets
that previously went to the State; and $4.6 million in reimbursements
to New York City for paying New York City off track betting retiree
health benefits.

STATEMENT IN SUPPORT:
The closing of operations of the New York City off-track betting
corporation was preventable. For years the corporation has struggled,
yet the current board of directors failed to address the factors that
hampered the success of the corporation and failed to formulate a
profitable business plan. As a public benefit corporation, integral
to the New York State racing industry, and as an employer of
hundreds, the failure of this corporation is felt by many.
Resurrecting this corporation is necessary, but only in a manner that
allows the corporation to be profitable long term.

By restructuring the corporation to allow for a vendor operator, be it
an individual, partnership, or private or public corporation, the
state will encourage the participation of the best and the brightest
of the business world to bring new ideas and new life to this
corporation. The selection process will be fair and impartial, and
open to public input.

The vendor will have a vested interest in the success of the
corporation, and thus better motivated to run the operation
efficiently.

The demise of operations of the corporation did bring to light factors
that may be unfairly burdening not only NYCOTB but the other OTBs of
the state as well. This bill addresses both outdated obligations as
well as unfair competition from out-of-state entities to give all
OTBs in this state a better financial future.

EFFECTIVE DATE:
This act shall take effect immediately.

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

                                 3334--B

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 17, 2011
                               ___________

Introduced  by  Sens.  LANZA,  GOLDEN,  PARKER -- read twice and ordered
  printed, and when printed to be committed to the Committee on  Racing,
  Gaming  and  Wagering  --  committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee --  recommitted
  to  the  Committee  on  Racing, Gaming and Wagering in accordance with
  Senate Rule 6, sec. 8 -- committee discharged, bill  amended,  ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to  amend the racing, pari-mutuel wagering and breeding law and
  the state finance law, in relation to  the  New  York  city  off-track
  betting  corporation  and  establishing  the  New  York city off-track
  betting corporation fund; and to  repeal  certain  provisions  of  the
  racing, pari-mutuel wagering and breeding law relating thereto

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

  Section 1. Subdivision 9 of section 602  of  the  racing,  pari-mutuel
wagering  and  breeding  law,  as  amended by chapter 115 of the laws of
2008, is amended and a new subdivision 15 is added to read as follows:
  9. "Cost of corporation's functions." All costs and expenses  incurred
by  the  corporation in connection with the performance of the functions
of the corporation, including, but not limited to, operating expenses of
the corporation, the cost of acquiring, constructing or equipping branch
offices and other facilities  and  premises  of  the  corporation,  [and
interest  and  principal  on  bonds,]  notes or other obligations of the
corporation issued to finance the acquisition, construction or equipment
of such offices, facilities or premises.
  15. "VENDOR OPERATOR." THE VENDOR OPERATOR SHALL BE SELECTED  PURSUANT
TO  THE  PROVISIONS SET FORTH IN SECTION SIX HUNDRED TWENTY-FIVE OF THIS
ARTICLE AND SHALL BE RESPONSIBLE FOR THE ADMINISTRATION AND OPERATION OF
THE CORPORATION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08961-05-2

S. 3334--B                          2

  S 2. Section 603 of the racing, pari-mutuel wagering and breeding law,
as amended by chapter 115 of the laws of 2008, is  amended  to  read  as
follows:
  S  603.  New York city off-track betting corporation. 1. A corporation
to be known as the "New York  city  off-track  betting  corporation"  is
hereby  created.  Such corporation shall be a body corporate and politic
constituting a public benefit corporation. It  shall  be  [administered]
OVERSEEN  by a board of directors consisting of five members, who may be
public officers, appointed by the governor for fixed terms as hereinaft-
er provided, one of whom shall be appointed on the recommendation of the
temporary president of the senate, and one of whom shall be appointed on
the recommendation of the speaker of the assembly.
  2. THE TERMS OF ALL DIRECTORS SERVING A TERM THAT ENCOMPASSED  JANUARY
TWENTY-FIFTH,  TWO  THOUSAND TWELVE, SHALL BE DEEMED TO HAVE EXPIRED AND
NEW DIRECTORS SHALL  BE  APPOINTED.  Of  the  directors,  one  shall  be
appointed  for  a  term  ending  on  December thirty-first, two thousand
[nine] TWELVE, one for a term ending on December thirty-first, two thou-
sand [ten] THIRTEEN, one for a term ending on December thirty-first, two
thousand [twelve] FOURTEEN, and  the  two  directors  appointed  on  the
recommendation  of the temporary president of the senate and the speaker
of the assembly, for a term ending December thirty-first,  two  thousand
[fourteen]  FIFTEEN.  Upon  the  expiration  of such terms, the terms of
office of their successors  shall  be  six  years.  Vacancies  occurring
otherwise  than  by expiration of term shall be filled for the unexpired
term.
  3. The governor shall designate one of the directors to be chairman of
the board of directors and may at his pleasure, change  his  designation
of any such director to be chairman.
  4.  Each  director  shall  continue to serve until the appointment and
qualification of his successor.
  5. The directors shall be removable for cause by  the  governor,  upon
charges and after a hearing.
  6.  The  [powers]  OVERSIGHT of the corporation shall be vested in and
exercised by the board at a meeting duly held at a  time  fixed  by  any
by-law  adopted  by  the board, or at any duly adjourned meeting of such
meeting or at any meeting held upon reasonable  notice  to  all  of  the
directors,  or  upon written waiver thereof, and a majority of the whole
number of directors shall constitute a quorum[;  provided  that  neither
the  business  nor  the powers of the corporation shall be transacted or
exercised except pursuant to the favorable vote of at least  a  majority
of  the  directors  present at a meeting at which a quorum is in attend-
ance].
  7. The board may delegate to one or more of the  directors,  officers,
agents  or employees of the corporation such powers and duties as it may
deem proper.
  8. The directors shall be reimbursed for their  actual  and  necessary
expenses incurred in the performance of their official duties.
  9.  The  directors may engage in outside employment or in a profession
or business EXCEPT AS AN EXECUTIVE OR  LEGISLATIVE  EMPLOYEE  OR  unless
otherwise  prohibited  from doing so by virtue of holding another public
office subject to the provisions of section seventy-three of the  public
officers law.
  10. The board shall hold an annual meeting.
  11.  The  fiscal year of the corporation shall be the same as [that of
the city, provided, however, that the  corporation  shall  have  a  nine
month  fiscal  year  from  July  first, two thousand eight through March

S. 3334--B                          3

thirty-first, two thousand nine, and then the fiscal year of the  corpo-
ration shall be the same as] the state.
  12.  THE  CORPORATION  WILL BE ADMINISTERED BY THE VENDOR OPERATOR AND
THE POWERS OF THE CORPORATION SHALL BE VESTED IN THE VENDOR OPERATOR.
  S 3. Section 617 of the racing, pari-mutuel wagering and breeding  law
is amended to read as follows:
  S  617.  Exemption  from taxation. [1.] The moneys and property of the
corporation and any property under its jurisdiction, control  or  super-
vision,  and  all  of its activities and operations shall be exempt from
taxation.
  [2. The state covenants with the purchasers of and with all subsequent
holders and transferees of bonds and notes  issued  by  the  corporation
pursuant  to  this  article,  in  consideration of the acceptance of and
payment for the said bonds and notes, that the said bonds and notes  and
the  income  therefrom, and all moneys, funds and revenue pledged to pay
or secure the payment of such bonds and notes shall at all time be  free
from taxation, except for estate and gift taxes and taxes on transfers.]
  S  4.  The opening paragraph of section 621 of the racing, pari-mutuel
wagering and breeding law, as amended by chapter  115  of  the  laws  of
2008, is amended to read as follows:
  Within one hundred twenty days after the end of the fiscal year of the
corporation, the [directors thereof] VENDOR OPERATOR shall submit to the
governor,  the  legislature, the racing and wagering board and the state
comptroller a complete and detailed report setting forth:
  S 5. The racing, pari-mutuel wagering and breeding law is  amended  by
adding a new section 625 to read as follows:
  S  625. SELECTION OF VENDOR OPERATOR. 1. THE NEW YORK STATE RACING AND
WAGERING BOARD SHALL SUBMIT, WITHIN THIRTY DAYS AFTER THE EFFECTIVE DATE
OF THIS SECTION, A REQUEST FOR PROPOSALS  FROM  QUALIFYING  ENTITIES  AS
DESCRIBED  IN  THIS SECTION FOR THE PURPOSE OF THE ADMINISTRATING OF THE
CORPORATION. THE ENTITY CHOSEN TO ADMINISTER THE CORPORATION SHALL ENTER
INTO A CONTRACT WITH THE STATE FOR A TERM OF TEN  YEARS,  WHICH  MAY  BE
RENEWED  SUBJECT  TO THE APPROVAL OF THE STATE RACING AND WAGERING BOARD
AND THE APPROVAL OF THE NEW YORK CITY OFF-TRACK BETTING BOARD OF  DIREC-
TORS.
  2.  ELIGIBLE  ENTITIES  SHALL  CONSIST OF INDIVIDUALS, PARTNERSHIPS OR
CORPORATIONS, PUBLIC OR PRIVATE, WHICH ARE REQUIRED  AS  PART  OF  THEIR
PROPOSAL  TO  SUBMIT AT LEAST ONE BUSINESS PLAN FOR THE RE-ESTABLISHMENT
AND CONTINUATION OF A PROFITABLE CORPORATION. IN AWARDING THE  CONTRACT,
THE STATE RACING AND WAGERING BOARD MUST CONSIDER THE FOLLOWING CRITERIA
WITH  RESPECT  TO  EACH APPLICANT: ITS EXPERIENCE IN MANAGING SUCCESSFUL
BUSINESS ENTERPRISES, ITS EXPERIENCE IN THE RACING INDUSTRY, ITS EXPERI-
ENCE IN THE PARI-MUTUEL AND/OR OFF-TRACK BETTING INDUSTRIES, ITS EXPERI-
ENCE IN THE ENTERTAINMENT INDUSTRY,  THE  FEASIBILITY  OF  ITS  PROPOSED
BUSINESS  PLAN  OR  PLANS, AND ITS COMMITMENT TO USE ITS BEST EFFORTS TO
SUPPORT THE VIABILITY OF OFF-TRACK BETTING IN THE CITY OF  NEW  YORK  AS
WELL AS THE RACING INDUSTRY THROUGHOUT THE STATE.
  3.  ALL  BUSINESS PLANS SUBMITTED BY AN ENTITY MUST INCLUDE PROVISIONS
FOR PRIORITY FOR CONSIDERATION FOR EMPLOYMENT BY ANY FORMER EMPLOYEE  OF
THE  CORPORATION  WHOSE  EMPLOYMENT  TERMINATED OTHER THAN FOR CAUSE, BY
RETIREMENT, OR WITH A SEVERANCE AWARD. SUCH PLANS MUST ALSO PROVIDE  FOR
REPRESENTATION OF OFF-TRACK BETTING BRANCH OFFICES, OR AN EQUIVALENT, IN
ALL  OF  THE BOROUGHS OF THE CITY OF NEW YORK, WITH PREFERENCE GIVEN FOR
BUSINESS PLANS THAT HAVE AT LEAST THREE FACILITIES IN EACH  BOROUGH  AND
THAT  MAINTAIN  THE SAME RATIO OF ACCESS TO OFF-TRACK BETTING FACILITIES

S. 3334--B                          4

AS WAS PREVIOUSLY PROVIDED BY THE CORPORATION PRIOR TO  DECEMBER  FIRST,
TWO THOUSAND TEN.
  4.  THE STATE RACING AND WAGERING BOARD SHALL MAKE PUBLIC ITS PRELIMI-
NARY SELECTION OF THE VENDOR OPERATOR NO LATER THAN THREE  MONTHS  AFTER
THE SUBMISSION OF THE REQUEST FOR PROPOSALS, AND ALLOW FOR TWO WEEKS FOR
PUBLIC  COMMENT. THE FINAL SELECTION AND THE CONTRACT BETWEEN THE VENDOR
AND THE STATE MUST BE FINALIZED WITHIN THIRTY DAYS  OF  THE  PRELIMINARY
SELECTION,  BUT  NO  SOONER  THAN THE END OF THE TWO WEEK PUBLIC COMMENT
PERIOD.
  5. THE SELECTION OF VENDOR MAY BE REVOKED AND CANCELLED BY  THE  STATE
RACING  AND  WAGERING  BOARD  FOR A MATERIAL BREACH OF CONTRACT OR FOR A
VIOLATION OF THE RULES OF THE STATE RACING AND WAGERING BOARD OR IF SUCH
VENDOR  OR  ITS  OFFICERS  OR  DIRECTORS  SHALL  KNOWINGLY  VIOLATE  THE
PROVISIONS  OF THIS CHAPTER OR OF THE PENAL LAW. THE ACTION OF THE STATE
RACING AND WAGERING BOARD IN REVOKING THE SELECTION SHALL BE  REVIEWABLE
IN  THE  SUPREME  COURT  IN  THE  MANNER  PROVIDED BY AND SUBJECT TO THE
PROVISIONS OF ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
  6. FOR CONTRACTS IN EXCESS OF ONE HUNDRED  THOUSAND  DOLLARS,  ENTERED
INTO  BY  THE VENDOR FOR THE PROCUREMENT OF GOODS OR SERVICES, THE BOARD
MAY REVIEW THE CHARACTER AND FITNESS OF THE  ENTITY  OR  ITS  PRINCIPALS
ENTERING INTO CONTRACTS WITH THE VENDOR.
  S  6. Clause (E) of subparagraph 5 and clause (F) of subparagraph 6 of
paragraph b of subdivision 1 of section 1016 of the racing,  pari-mutuel
wagering and breeding law, as amended by chapter 18 of the laws of 2008,
are amended to read as follows:
  (E)  On  days  when  a franchised corporation 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 thorough-
bred racing corporation, [two  and  eight-tenths]  ONE  AND  FOUR-TENTHS
percent  on regular and multiple bets during a regional meeting and [one
and nine-tenths] NINETY-FIVE HUNDREDTHS percent of such bets if there is
no regional meeting and [four  and  eight-tenths]  TWO  AND  FOUR-TENTHS
percent  on exotic bets on days on which there is a regional meeting and
[three and four-tenths] ONE AND SEVEN-TENTHS percent  of  such  bets  if
there is no regional meeting.
  (ii)  Such licensed regional harness track shall receive [one and one-
half] SEVENTY-FIVE HUNDREDTHS per centum on  total  regional  handle  on
races conducted at out-of-state or out-of-country thoroughbred tracks.
  (iii)  In  those  regions  in  which  there  is more than one licensed
regional harness track, if no track is accepting  wagers  or  displaying
the  live  simulcast  signal  from the out-of-state track, the total sum
shall be divided among the tracks in proportion to the ratio the  wagers
placed on races conducted by each track bears to the corporation's total
in-region  harness handle. If one or more tracks are accepting wagers or
displaying the live simulcast signal, the total amount shall be  divided
among  those  tracks  not  accepting  wagers or displaying the simulcast
signal for an out-of-state track or in-state thoroughbred corporation or
association.
  (F) Of the sums retained by a licensed harness facility,  [fifty]  ONE
HUNDRED  percent  shall  be used exclusively for purses awarded in races
conducted by such licensed facility [and  the  remaining  fifty  percent
shall  be  retained  by such licensed facility for its general purposes,

S. 3334--B                          5

provided, however, that  in  a  harness  special  betting  district  the
portion  of  the sums retained by a licensed harness facility to be used
for purses or the methodology for calculating the amount to be used  for
purses  may  be specified in a written contract between a harness racing
association or corporation and  its  representative  horsemen's  associ-
ation].
  S  7.  Section  1017  of the racing, pari-mutuel wagering and breeding
law, as amended by chapter 18 of the laws of 2008, is amended to read as
follows:
  S 1017. Out-of-state or out-of-country races.  1.  Licensed  simulcast
facilities  may  accept wagers and display the signal of out-of-state or
out-of-country thoroughbred tracks after 7Labor P.M. in accordance  with
the  provisions  of  this  section.  Such simulcasting may include mixed
meetings if such meetings are integral to such racing programs  and  all
such wagering on such races shall be construed to be thoroughbred races.
For  facilities  located  within  the  special  betting  district,  such
approval shall also be required from a thoroughbred  racing  corporation
during  the  period  a  racing program is being conducted at such track.
Such approval shall not be required on any day such thoroughbred  racing
corporation  is  also accepting an out-of-state or out-of-country signal
and wager, as authorized by this section. The provisions of section  one
thousand  sixteen  of this article shall be applicable to the conduct of
such simulcasting and the provisions of clauses (A) and (B) of  subpara-
graph  four  of  paragraph  b of subdivision one of section one thousand
sixteen of this article shall apply  to  those  facilities  licensed  in
accordance  with  sections  one  thousand eight and one thousand nine of
this article and the provisions of clauses (A) and (B)  of  subparagraph
six of paragraph b of subdivision one of section one thousand sixteen of
this article shall apply to those facilities licensed in accordance with
section  one thousand seven of this article, when such provisions are in
full force and effect pursuant to such section. Provided,  however,  the
provisions  of  section  one  thousand fourteen of this article shall be
applicable to the conduct of such simulcasting, when such provisions are
in full force and effect pursuant to such section.
  2. a. Maintenance of effort. 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] purs-
es  made  by  such  off-track  corporation pursuant to the provisions of
section one thousand fifteen of this article during the year  two  thou-
sand  two,  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 one thousand fifteen of this article.
  b. Additional payments. During each calendar year, to the extent,  and
at  such  time  in  the  event, that aggregate statewide wagering handle
after 7Labor P.M. on out-of-state and out-of-country thoroughbred  races
exceeds  one hundred million dollars, each off-track betting corporation
conducting such simulcasting shall pay to its regional harness track  or
tracks,  an amount equal to [two] ONE percent of its proportionate share
of such excess handle. In  any  region  where  there  are  two  or  more
regional  harness  tracks,  such two percent shall be divided between or

S. 3334--B                          6

among the tracks in a proportion equal to the proportion  of  handle  on
live  harness races conducted at such tracks during the preceding calen-
dar year. [Fifty percent of the] THE sum received by each track pursuant
to  this  paragraph  shall  be  used  exclusively for increasing purses,
stakes and prizes at that regional harness track.
  S 8. Subdivision 2 of section 529 of the racing, pari-mutuel  wagering
and breeding law is amended to read as follows:
  2.  [Ninety-five  percent  of  the  balance  of such account remaining
unclaimed as of the last day of February of such year shall be  paid  to
the state tax commission by March fifteenth. On or before April tenth of
each  year  the  balance of such account and any other unclaimed amounts
received in the course of conducting off-track betting shall be paid  by
such  corporation to the state tax commission. A penalty of five percent
and interest at the rate of one percent per month from the due  date  to
the  date  of  payment  of  the unclaimed balance due March fifteenth or
April tenth, as the case may be, shall be payable in case  such  balance
is  not  paid  when  due.  Such  amounts,  interest  and  penalties when
collected by the state tax commission shall be deposited into the gener-
al fund of the state treasury] ON APRIL FIRST OF EACH YEAR,  THE  AMOUNT
OF  TICKETS  REMAINING  UNCLAIMED  FROM  THE  PRIOR YEAR MAY BE USED FOR
CORPORATE PURPOSES.
  S 9. Subdivision 7 of section 532 of the racing, pari-mutuel  wagering
and  breeding  law,  as  added  by  chapter  115 of the laws of 2008, is
amended to read as follows:
  7. Notwithstanding any other provision of this section,  any  payments
otherwise  payable  to  a city with a population of one million or more,
pursuant to this section, [other than payments pursuant to subparagraphs
(i) and (iii) of paragraph b of subdivision three of this section, shall
be payable to the corporation and shall be available for  its  corporate
purposes] SHALL PAY REMAINING AMOUNTS TO THE COMPTROLLER OF THE STATE OF
NEW  YORK FOR DEPOSIT IN THE NEW YORK CITY OFF-TRACK BETTING CORPORATION
FUND.
  S 10. Subdivision 2 of section 610 of the racing, pari-mutuel wagering
and breeding law, as amended by chapter 115 of  the  laws  of  2008,  is
amended to read as follows:
  2.  All moneys due the city pursuant to article five-A of this chapter
shall be paid to the  New  York  city  [comptroller]  OFF-TRACK  BETTING
CORPORATION FUND.
  S 11. Subdivision 6 of section 527 of the racing, pari-mutuel wagering
and  breeding  law,  as  amended  by chapter 115 of the laws of 2008, is
amended to read as follows:
  6. The net amount remaining to each regional corporation after payment
of taxes and distributions pursuant to this section and after payment of
operating expenses and principal and interest on any obligations  shall,
in  the  case  of  the  New  York city off-track betting corporation, be
retained by the corporation, and in the case of  other  regional  corpo-
rations  shall  accrue and be payable to participating counties pursuant
to section five hundred sixteen of this chapter; provided, however, that
the [New York city off-track betting corporation] VENDOR OPERATOR, after
payment of all current taxes and distributions shall use such net amount
to pay all [liabilities] OPERATING EXPENSES of such corporation  [as  of
the  effective  date  of  the  chapter of the laws of two thousand eight
which amended this subdivision], and at such time as  all  [liabilities]
OPERATING  EXPENSES  have  been paid, such [corporation] VENDOR OPERATOR
shall pay ANY remaining amounts to the comptroller of the state  of  New

S. 3334--B                          7

York  for  deposit  in  the  [general  fund  of the state] NEW YORK CITY
OFF-TRACK BETTING CORPORATION FUND.
  S  12. The racing, pari-mutuel wagering and breeding law is amended by
adding a new section 626 to read as follows:
  S 626. VENDOR OPERATOR FEE. AS CONSIDERATION FOR THE OPERATION OF  THE
CORPORATION,  THE COMPTROLLER SHALL PAY A VENDOR FEE IN EXCHANGE FOR THE
DAILY OPERATIONS AND CAPITALIZATION OF A NEW YORK CITY OFF-TRACK BETTING
OPERATION TO BE PAID AS FOLLOWS:   IF THE ANNUAL DEPOSIT  INTO  THE  NEW
YORK  CITY  OFF-TRACK  BETTING  CORPORATION  FUND  IS  LESS THAN TWO AND
ONE-HALF MILLION DOLLARS, THE VENDOR OPERATOR SHALL RECEIVE ONE  HUNDRED
PERCENT  OF THE ANNUAL DEPOSITS; IF THE ANNUAL DEPOSIT INTO THE NEW YORK
CITY OFF-TRACK BETTING CORPORATION FUND IS LESS THAN  OR  EQUAL  TO  TEN
MILLION  DOLLARS,  THE  VENDOR  OPERATOR  SHALL BE PAID TWO AND ONE-HALF
MILLION DOLLARS AND THE REMAINING FUNDS SHALL BE DEPOSITED TO THE  STATE
GENERAL  FUND;  IF  THE ANNUAL DEPOSIT IS MORE THAN TEN MILLION DOLLARS,
THE VENDOR OPERATOR SHALL BE PAID TWENTY-FIVE PERCENT OF THE TOTAL ANNU-
AL DEPOSITS AND THE REMAINING FUNDS SHALL  BE  DEPOSITED  TO  THE  STATE
GENERAL FUND.
  S 13. The state finance law is amended by adding a new section 95-h to
read as follows:
  S 95-H. NEW YORK CITY OFF-TRACK BETTING CORPORATION FUND. 1.  THERE IS
HEREBY  ESTABLISHED IN THE CUSTODY OF THE COMPTROLLER, A SPECIAL FUND TO
BE KNOWN AS THE "NEW YORK CITY OFF-TRACK BETTING CORPORATION FUND".
  2. SUCH FUND SHALL CONSIST OF ALL MONIES RECEIVED BY THE STATE  PURSU-
ANT TO SUBDIVISIONS ONE AND SIX OF SECTION FIVE HUNDRED TWENTY-SEVEN AND
SUBDIVISION  SEVEN  OF  SECTION  FIVE  HUNDRED THIRTY-TWO OF THE RACING,
PARI-MUTUEL WAGERING AND  BREEDING  LAW.  ANY  INTEREST  EARNED  BY  THE
INVESTMENT  OF MONEYS IN SUCH FUND SHALL BE ADDED TO SUCH FUND, BECOME A
PART OF SUCH FUND, AND BE USED FOR THE PURPOSE OF SUCH FUND.
  3. MONEYS OF THE NEW YORK  CITY  OFF-TRACK  BETTING  CORPORATION  FUND
SHALL BE MADE AVAILABLE TO THE COMPTROLLER FOR THE PURPOSE OF PAYING THE
NEW  YORK CITY OFF-TRACK BETTING VENDOR OPERATOR FEE DISTRIBUTED ACCORD-
ING TO SECTION SIX HUNDRED TWENTY-SIX OF THE RACING, PARI-MUTUEL  WAGER-
ING  AND  BREEDING  LAW; ALL REMAINING MONEY SHALL BE DISBURSED INTO THE
STATE GENERAL FUND.
  S 14. The racing, pari-mutuel wagering and breeding law is amended  by
adding a new section 113 to read as follows:
  S  113. TELEPHONE AND INTERNET WAGERING. THE STATE RACING AND WAGERING
BOARD SHALL DETERMINE WHETHER ELIMINATING OR REGULATING THE AUTHORITY OF
OUT-OF-STATE ENTITIES TO ACCEPT TELEPHONE AND/OR INTERNET WAGERING  FROM
STATE RESIDENTS PLACED WHILE IN THIS STATE, WOULD BE CONSISTENT WITH THE
OBJECTIVES  OF  OFF-TRACK PARI-MUTUEL BETTING AS DEFINED IN SECTION FIVE
HUNDRED EIGHTEEN OF THIS CHAPTER, AND IF SO DETERMINED, THE STATE RACING
AND WAGERING BOARD SHALL ESTABLISH SUCH GENERAL REGULATIONS TO ELIMINATE
OR REGULATE THE PRACTICE OF  OUT-OF-STATE  ENTITIES  OF  ACCEPTING  SUCH
WAGERS.
  S 15. Subdivision 4 of section 606 of the racing, pari-mutuel wagering
and  breeding  law,  as  amended  by chapter 115 of the laws of 2008, is
amended to read as follows:
  4. All [employees and officers] PRESENT AND  FUTURE  RETIREES  of  the
corporation  in  classes  or  positions  whose incumbents, in equivalent
classes or positions of the city, are eligible, as of the effective date
hereof, to participate in, and receive benefits from any city authorized
health insurance or  welfare  benefit  program,  shall  be  eligible  to
participate  in,  and receive benefits from any such health insurance or
welfare benefit program; provided, however, that the [corporation] STATE

S. 3334--B                          8

shall reimburse the city or its designee for the actual cost of benefits
under this subdivision.
  S  16.  Subdivisions 4 and 5 of section 610 of the racing, pari-mutuel
wagering and breeding law are REPEALED.
  S 17. Sections 611, 612, 613, 614, 616 and 620 of the racing, pari-mu-
tuel wagering and breeding law are REPEALED.
  S 18. This act shall take effect immediately.

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