senate Bill S3614A

2011-2012 Legislative Session

Provides for the amount to be paid by off track betting corporations to regional harness tracks from certain simulcasting revenue

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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 18, 2012 print number 3614a
amend and recommit to racing, gaming and wagering
Jan 04, 2012 referred to racing, gaming and wagering
Feb 28, 2011 referred to racing, gaming and wagering

Bill Amendments

Original
A (Active)
Original
A (Active)

S3614 - Bill Details

See Assembly Version of this Bill:
A3520A
Current Committee:
Law Section:
Racing, Pari-Mutuel Wagering and Breeding Law
Laws Affected:
Amd §1017, RWB L
Versions Introduced in 2009-2010 Legislative Session:
S2360, A5772

S3614 - Bill Texts

view summary

Provides for the amount to be paid by off track betting corporations to regional harness tracks from out-of-state and out-of-country simulcast revenue.

view sponsor memo
BILL NUMBER:S3614

TITLE OF BILL:
An act
to amend the racing, pari-mutuel wagering and breeding law, in relation
to payments by off track betting corporations to regional harness tracks
for out-of-state and out-of-country simulcasting revenue

PURPOSE:
To phase out additional payments made by off track betting
corporations conducting simulcast to those regional harness track or
tracks that had previously received additional payments.

SUMMARY OF PROVISIONS:

Section 1: Details dates and percentages of payment phase out.
Calendar year 2009 would retain the traditional two (2)percent
payment of excess handle, Each subsequent year there after would be a
half (5) percentage point reduction in payments. No payment of excess
handle would be made from the beginning of calendar year 2013 onward.

Section 2: Effective date language.

EXISTING LAW:
Currently subdivision 3(b) (3)-(4) of section 1016
requires OTBs to pay regional harness tracks six (6) percent of the
sum retained by the OTB from wagers accepted on harness races run at
out of state tracks, of the sum retained by the OTBs, five (5)
percent is to be distributed in the same manner as though such
payments were made on the races conducted at the harness trade In
addition, one (1) percent of such wagers shall be paid to the
licensed regional harness track for the purpose of increasing track
purses. In OTB regions where there are multiple regional harness
tracks these payments are made to the regional track conducting a
live meet on the day out-of-state simulcasting occurs. If either no
regional track is conducting a meet, or more than one regional track
is conducting a meet, the distribution is to be made either (i) in
the proportion that each track's handle bore to the total regional
licensed harness track handle during the preceding calendar month or
(ii) in accordance with a contractual agreement between the regional
tracks and the OTB corporation, Subdivision 2(a) of section 1017-a
requires OTBs to make an additional "maintenance of effort" payment
to their regional harness tracks measured by the level
of payments received by the regional harness tracks during 2002
from their regional OTB attributable to wagering on out-of-state
harness races run after 6:00 p.m. OTBs engaged in the simulcasting of
out-or-state or out-of-country thoroughbred racing after 7:30 p.m.
are required to submit a payment schedule to be approved by the State
Racing and Wagering Board. In order to be approved this payment
schedule must be identical to the actual payments and distributions
of such payments to tracks and purses made by such OTBs pursuant to
the provisions of section 1016 during the year of 2002, as derived
from out-of-state harness races displayed after 6:00 p.m. If approved
by the board, such scheduled payments shall be made from revenues
derived from any simulcasting under sections 1016 and 1017-a.


JUSTIFICATION:
Under the current law regional harness tracks that are
not running live racing are receiving maintenance of effort payments
notwithstanding that they are closed. The intent of the 2003
legislation was to provide harness tracks with a "hold harmless"
payment stream to offset the losses anticipated from bettors
defecting from harness racing
to wager on the nighttime out-of-state and out-of-country thoroughbred
races. This payment requirement was not meant to provide a source of
revenue to harness tracks not running live races. Recently, the State
Racing and Wagering Board incorrectly interpreted 1017-a (2) (a) as
requiting the maintenance of effort calculation to be made on a track
by track basis in regions with more than one regional licensed
harness track. It was the Board's interpretation that regional
harness tracks could become entitled to more than the amount they
received in 2002 but under no circumstances could they receive less
individually, even if the aggregate level of payments under section
1016 to all tracks within the region matched, or exceeded, the total
level of payments to all the tracks during 2002. This ruling is
inconsistent with the Legislature's intent expressed in section 1016
that distribution of revenue in multitrack regions be made based on
the proportion of each track's live handle. Therefore, in a region
with two or more regional harness tracks, if one track is not running
the entire section 1016 payment goes to the track running live
racing, but the track not running nonetheless remains eligible to
receive maintenance of effort payments.
The Board's misinterpretation of section 1017-a (2) (a) unfairly
requires OTBs to subsidize those harness tracks not conducting live
race meetings. In addition, the additional payments made pursuant to
section 1017 -a (2) (b) are no longer appropriate. Harness tracks
have been given permission to install video Lottery Terminals (VLTs).
The success of VLTs has been well documented and these VLT operations
have provided harness tracks with a generous new stream of revenue.
VLT s have brought increased attendance to harness tracks, as well
as, afforded them the opportunity to increase purses. Allowing
harness tracks to install VLTs and at the same time requiring OTBs to
make additional payments if handle exceeds a designated amount is
tantamount to New York State subsidizing these private entities
twice. It needs to be recognized that the exodus of harness bettors
for the new world of nighttime thoroughbred wagering is not as great
as was expected, OTBs have handled well over $100 million in annual
wagering statewide on nighttime thoroughbred racing without
significant detriment to the wagering done on regional harness
tracks. In fact regional harness tracks are themselves authorized to
simulcast these nighttime thoroughbred races
and can partake in this new endeavor just a.s OTBs can, This
legislation does not call for the end of all OTB payments to regional
harness tracks. It simply is a fair redistribution of the wagering
handle to all parties involved that is in line with the intent of the
2003 legislation when passed. This legislation is not intended to
deprive revenue to those regional harness tracks running live races.
OTBs will continue to contribute the six (6) percent that is required
by subdivisions (3) (c) (3)-(4) of section 1016. OTBs will continue
to pay their fair share to those regional harness tracks conducting
live racing meets. It is merely the intention of this legislation to
end a subsidy to private harness tracks not running live racing and


that are not being adversely affected in any way from the
simulcasting of nighttime thoroughbred racing by their regional OTBs.

LEGISLATIVE HISTORY:
2010: A.5772/S.2360 - Held in Racing, Gaming and Wagering
A8613 of 2007.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately.

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

                                  3614

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 28, 2011
                               ___________

Introduced  by  Sen.  ADAMS  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Racing, Gaming and  Wager-
  ing

AN  ACT  to  amend the racing, pari-mutuel wagering and breeding law, in
  relation to payments by off track  betting  corporations  to  regional
  harness tracks for out-of-state and out-of-country simulcasting reven-
  ue

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

  Section 1. Subdivision 2 of 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:
  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  purses
made by such off-track corporation pursuant to the provisions of section
one  thousand  fifteen of this article during the year two thousand 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 reven-
ues derived from any simulcasting conducted pursuant to this section and
section one thousand fifteen of this article.
  b.  Additional  payments]  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 corpo-
ration conducting such simulcasting shall pay to  its  regional  harness

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05801-01-1

S. 3614                             2

track or tracks, an amount equal to [two percent] THE FOLLOWING PERCENT-
AGE  of  its  proportionate  share of such excess handle:   FOR CALENDAR
YEARS THROUGH TWO THOUSAND ELEVEN, TWO PERCENT; FOR  CALENDAR  YEAR  TWO
THOUSAND  TWELVE,  ONE AND ONE-HALF PERCENT; FOR CALENDAR YEAR TWO THOU-
SAND THIRTEEN, ONE PERCENT; AND FOR CALENDAR YEAR TWO THOUSAND FOURTEEN,
ONE-HALF OF ONE PERCENT. THERE SHALL BE NO  FURTHER  ADDITIONAL  PAYMENT
OBLIGATION PURSUANT TO THIS SUBDIVISION FOR CALENDAR YEARS COMMENCING ON
OR  AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN. In any region where there
are two or more regional harness  tracks,  such  [two  percent]  PAYMENT
AMOUNT  shall  be  divided  between  or among the tracks in a proportion
equal to the proportion of handle on live  harness  races  conducted  at
such tracks during the preceding calendar year. Fifty percent of the sum
received by each track pursuant to this [paragraph] SUBDIVISION shall be
used  exclusively  for  increasing  purses,  stakes  and  prizes at that
regional harness track.
  S 2. This act shall take effect immediately.

S3614A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A3520A
Current Committee:
Law Section:
Racing, Pari-Mutuel Wagering and Breeding Law
Laws Affected:
Amd §1017, RWB L
Versions Introduced in 2009-2010 Legislative Session:
S2360, A5772

S3614A (ACTIVE) - Bill Texts

view summary

Provides for the amount to be paid by off track betting corporations to regional harness tracks from out-of-state and out-of-country simulcast revenue.

view sponsor memo
BILL NUMBER:S3614A

TITLE OF BILL:
An act
to amend the racing, pari-mutuel wagering and breeding law, in relation
to payments by off track betting corporations to regional harness tracks
for out-of-state and out-of-country simulcasting revenue

PURPOSE:
To phase out additional payments made by off track betting
corporations conducting simulcast to those regional harness track or
tracks that had previously received additional, payments.

SUMMARY OF PROVISIONS:
Section 1: Details dates and percentages of payment phase out.
Calendar year 2009 would retain the traditional two (2) percent
payment of excess handle, Each subsequent year thereafter would be a
half (5) percentage point reduction in payments. No payment of excess
handle would be made from the beginning of calendar year 2013 onward.

Section 2: Effective date language.

EXISTING LAW:
Currently subdivision 3(b) (3)-(4) of section 1016 requires OTBs to
pay regional harness tracks six (6) percent of the sum retained by
the OTB from wagers accepted on harness races run at out of state
tracks, of the sum retained by the OTBs, five (5) percent is to be
distributed in the same manner as though such payments were made on
the races conducted at the harness trade In addition, one (1) percent
of such wagers shall be paid to the licensed regional harness track
for the purpose of increasing track purses. In OTB regions where
there are multiple regional harness tracks these payments are made to
the regional track conducting a live meet on the day out-of-state
simulcasting occurs. If either no regional track is conducting a
meet, or more than one regional track is conducting a meet, the
distribution is to be made either (i) in the proportion that each
track's handle bore to the total regional licensed harness track
handle during the preceding calendar month or (ii) in accordance with
a contractual agreement between the regional tracks and the OTB
corporation, Subdivision 2(a) of section 1017-a requires OTBs to make
an additional "maintenance of effort" payment to their regional
harness tracks measured by the level of payment
s received by the regional harness tracks during 2002 from their
regional OTB attributable to wagering on out-of-state harness races
run after 6:00 p.m. OTBs engaged in the simulcasting of out-or-state
or out-of-country thoroughbred
racing after 7:30 p.m. are required to submit a payment schedule
to be approved by the State Racing and Wagering Board. In order to be
approved this payment schedule must be identical to the actual
payments and distributions of such payments to tracks and purses made
by such OTBs pursuant to the provisions of section 1016 during the
year of 2002, as derived from out-of-state harness races displayed
after 6:00 p.m. If approved by the board, such scheduled payments
shall be made from revenues derived from any simulcasting under
sections 1016 and 1017-a.


JUSTIFICATION:
Under the current law regional harness tracks that are not running
live racing are receiving maintenance of effort payments
notwithstanding that they are closed. The intent of the 2003
legislation was to provide harness tracks with a "hold harmless"
payment stream to offset the losses anticipated from bettors
defecting from harness racing to wager on the nighttime out-of-state
and out-of-country thoroughbred races. This payment requirement was
not meant to provide a source of revenue to harness tracks not
running live races. Recently, the State Racing and Wagering Board
incorrectly interpreted 1017-a (2) (a) as requiting the maintenance
of effort calculation to be made on a track by track basis in regions
with more than one regional licensed harness track. It was the
Board's interpretation that regional harness tracks could become
entitled to more than the amount they received in 2002 but under no
circumstances could they receive less individually, even if the
aggregate level of payments under section 1016 to all tracks within
the region matched, or exceeded, the total level of payments to all
the tracks during 2002. This ruling is inconsistent with the
Legislature's intent expressed in section 1016 that distribution of
revenue in
multi-track regions be made based on the proportion of each track's
live handle. Therefore, in a region with two or more regional harness
tracks, if one track is not running the entire section 1016 payment
goes to the track running live racing, but the track not running
nonetheless remains eligible to receive maintenance of effort
payments. The Board's misinterpretation of section 1017-a (2) (a)
unfairly requires OTBs to subsidize those harness tracks not
conducting live race meetings. In addition, the additional payments
made pursuant to section 1017-a (2) (b) are no longer appropriate.
Harness tracks have been given permission to install video Lottery
Terminals (VLTs). The success of VLTs has been well documented and
these VLT operations have provided harness tracks with a generous new
stream of revenue. VLTs have brought increased attendance to harness
tracks, as well as, afforded them the opportunity to increase purses.
Allowing harness tracks to install VLTs and at the same time
requiring OTBs to make additional payments if handle exceeds a
designated amount is tantamount to New York State subsidizing these
private entities twice. It needs to be recognized that the exodus of
harness bettors for the new world of nighttime thoroughbred
wagering is not as great as was expected, OTBs have handled
well over $100 million in annual wagering statewide on nighttime
thoroughbred racing without significant detriment to the wagering
done on regional harness tracks. In fact regional harness tracks are
themselves authorized to simulcast these nighttime thoroughbred races
and can partake in this new endeavor just as OTBs can, This
legislation does not call for the end of all OTB payments to regional
harness tracks. It simply is a fair redistribution of the wagering
handle to all parties involved, that is line with the intent of the
2003 legislation when passed. This legislation is not intended to
deprive revenue to those regional harness tracks running
live races. OTBs will continue to contribute the six (6) percent that
is required by subdivisions (3) (c) (3) - (4) of section 1016. OTBs
will continue to pay their fair share to those regional harness
tracks conducting live racing meets. It is merely the intention of
this legislation to end a subsidy to private harness tracks not
running live racing and that are not being adversely affected in any


way from the simulcasting of nighttime thoroughbred racing by their
regional OTBs.

LEGISLATIVE HISTORY:
2010: A.5772/S.2360 - Held in Racing, Gaming and Wagering
A.8613 of 2007.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3614--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 28, 2011
                               ___________

Introduced  by  Sen.  ADAMS  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Racing, Gaming and  Wager-
  ing  -- 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 commit-
  tee

AN ACT to amend the racing, pari-mutuel wagering and  breeding  law,  in
  relation  to  payments  by  off track betting corporations to regional
  harness tracks for out-of-state and out-of-country simulcasting reven-
  ue

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

  Section  1.  Subdivision  2 of 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:
  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 purses
made by such off-track corporation pursuant to the provisions of section
one thousand fifteen of this article during the year two  thousand  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 reven-
ues derived from any simulcasting conducted pursuant to this section and
section one thousand fifteen of this article.
  b. Additional payments] PAYMENTS. During each calendar  year,  to  the
extent, and at such time in the event, that aggregate statewide wagering

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05801-02-1

S. 3614--A                          2

handle after 7Labor P.M. on out-of-state and out-of-country thoroughbred
races exceeds one hundred million dollars, each off-track betting corpo-
ration  conducting  such  simulcasting shall pay to its regional harness
track or tracks, an amount equal to [two percent] THE FOLLOWING PERCENT-
AGE  of  its  proportionate  share of such excess handle:   FOR CALENDAR
YEARS THROUGH TWO THOUSAND TWELVE, TWO PERCENT; FOR  CALENDAR  YEAR  TWO
THOUSAND THIRTEEN, ONE AND ONE-HALF PERCENT; FOR CALENDAR YEAR TWO THOU-
SAND  FOURTEEN, ONE PERCENT; AND FOR CALENDAR YEAR TWO THOUSAND FIFTEEN,
ONE-HALF OF ONE PERCENT. THERE SHALL BE NO  FURTHER  ADDITIONAL  PAYMENT
OBLIGATION PURSUANT TO THIS SUBDIVISION FOR CALENDAR YEARS COMMENCING ON
OR  AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN. In any region where there
are two or more regional harness  tracks,  such  [two  percent]  PAYMENT
AMOUNT  shall  be  divided  between  or among the tracks in a proportion
equal to the proportion of handle on live  harness  races  conducted  at
such tracks during the preceding calendar year. Fifty percent of the sum
received by each track pursuant to this [paragraph] SUBDIVISION shall be
used  exclusively  for  increasing  purses,  stakes  and  prizes at that
regional harness track.
  S 2. This act shall take effect immediately.

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