senate Bill S4173

2013-2014 Legislative Session

Relates to increasing investment in certain regional race tracks located within forty miles of a casino gambling facility

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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 08, 2014 referred to racing, gaming and wagering
Mar 12, 2013 referred to racing, gaming and wagering

S4173 - Bill Details

Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §1612, Tax L; add §1113, RWB L

S4173 - Bill Texts

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Increases investment through vendors fees in certain regional race tracks located within forty miles of a casino gambling facility.

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BILL NUMBER:S4173

TITLE OF BILL: An act to amend the tax law and the racing,
pari-mutuel wagering and breeding law, in relation to vendor's fees

GENERAL PURPOSE: To require casinos authorized pursuant to Article 1,

Section 9 of the state Constitution to be located at existing
racetracks that are conducting video lottery gaming and to require
such facilities to make racing support payments to regional tracks for
purse enhancements and capital expenditures.

SUMMARY OF SPECIFIC PROVISIONS: This bill amends Section 1612 of the
Tax Law to extend the current 41% vendor fee for video lottery
facility operators within 40 miles of a Native American Casino to
those racetracks operating VLTs that are within 40 miles of a
commercial casino authorized by Section 9 subdivision 1 of the
Constitution. The bill further adds a new Section 1113 to the Racing,
Pari-Mutuel Wagering and Breeding Law to provide that the operation of
casino gaming at a facility pursuant to Section 9, subdivision 1 of
the Constitution could only be conducted by a racetrack that on or
before September 1, 2011 was licensed to conduct video lottery gaming
provided that the conduct of casino gaming occurs only at the premises
or a contiguous premises where video lottery gaming was authorized to
be conducted. The net proceeds from casino gaming must be applied
exclusively to support education except that 10% of such funds could
be used for the support of local government in the host communities as
prescribed by the local legislative body.

The bill further provides that as consideration for the operation of
casino gaming that the state Gaming Commission shall require an
investment in the horse racing industry of a portion of the vendor fee
retained by the gambling facility. In this regard, any gambling
facility located within a 40 mile radius of a regional racetrack must
dedicate 7 1/2% of its total revenue after payout of prizes to the
enhancement of purses at such track during such time that the
racetrack is conducting a live race meeting. These payments, though,
could not be less than any purse enhancement payments received by the
racetrack from the conduct of video lottery gaming in calendar year
2012.

In addition, each gambling facility would have to pay 4% of its vendor
fee after pay-out of prizes to a regional track located within a 40
mile radius for capital expenditures at such track when the racetrack
is conducting a live race meeting. Furthermore, 1 1/2% of total
revenue wagered at the gambling facility after pay-out of prizes must
be distributed to the appropriate breeding fund. Whenever two or more
regional tracks are located within a 40 mile radius of a casino and
are both conducting a live race meeting the racing support payments
would be apportioned equally. Similarly, if two or more casinos are
located within the 40 mile radius of a regional track the racing
support payments would be apportioned equally.

Finally, the bill provides that for the purposes of its provisions the
term "regional track" would also encompass a gambling facility that


also conducts live horse racing pursuant to Article 2, 3 and 4 of the
Racing, Pari-Mutuel Wagering and Breeding Law.

JUSTIFICATION: Since 2001, the framework for expanding casino gaming
in New York has been in place, namely the nine racetracks that conduct
video lottery gaming at their facilities throughout the state. They
have the infrastructure to support expanded gaming and, thus, are the
logical sites for commercial casinos. These racinos, which employ over
5,000 persons, have been dependable partners for the state, having
generated four billion dollars in education aid since 2004 and through
their racing support payments have helped revitalize the racing
industry in the state through expanded purse levels and breeder
awards.

Indeed, the equine industry in New York generates an economic impact
in New York of $42 billion (2011 figures) resulting in close to 33,000
full-time jobs. Breeders, trainers, and owners of racehorses account
for 64% of the direct economic impact and 52% of the jobs. The
state's eleven major racetracks generate 23% of the total economic
impact with expenditures mainly funded by commissions or takeout from
race wagering. Expenditures by breeders, trainers and owners are
primarily funded by purses which include enhanced purses for New York
bred horses. The racing support payments derived from video lottery
terminals which have increased purse levels and breeder awards have
resulted in growing agribusiness in the state and the breeding
industry in particular. According to the Jockey Club's 2012 Report of
Mares Bred, New York thoroughbred stallions covered 43.1% more mares
in 2012 than in 2011. This success story, which is still in its
infancy, could be endangered if commercial casinos are allowed to
operate without mandated racing contributions when those casinos
directly compete with live racing. Other states which have authorized
commercial casinos, including Pennsylvania, Maryland, Ohio, and
Massachusetts, have made allowances for gaming revenues to be invested
in the racing industry. New York should do the same, and this bill
accomplishes that goal.

EFFECTS OF PRESENT LAW: The bill amends Section 1612 of the Tax Law
and adds a new Section 1113 to the Racing, Pari-Mutuel and Wagering
and Breeding Law.

FISCAL IMPLICATIONS: None to the State.

EFFECTIVE DATE: Immediately

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

                                  4173

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 12, 2013
                               ___________

Introduced by Sen. MARCHIONE -- 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 tax law and the  racing,  pari-mutuel  wagering  and
  breeding law, in relation to vendor's fees

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

  Section 1. Clause (D) of subparagraph (ii) of paragraph 1 of  subdivi-
sion b of section 1612 of the tax law, as amended by section 6 of part K
of chapter 57 of the laws of 2010, is amended to read as follows:
  (D)  notwithstanding  clauses  (A),  (B) and (C) of this subparagraph,
when the vendor track is located within fifteen miles of a Native Ameri-
can class III gaming facility OR A GAMING FACILITY  AUTHORIZED  PURSUANT
TO SUBDIVISION ONE OF SECTION NINE OF ARTICLE ONE OR ARTICLE FOUR OF THE
STATE  CONSTITUTION, at a rate of forty-one percent of the total revenue
wagered at the vendor track after payout for  prizes  pursuant  to  this
chapter;
  S  2.  The racing, pari-mutuel wagering and breeding law is amended by
adding a new section 1113 to read as follows:
  S 1113. INVESTMENT IN CERTAIN FACILITIES.  1. THE OPERATION OF  CASINO
GAMING  AT  A  FACILITY  PURSUANT TO SUBDIVISION ONE  OF SECTION NINE OF
ARTICLE ONE OF THE CONSTITUTION SHALL ONLY BE  CONDUCTED  BY  AN  ENTITY
WHICH, ON OR BEFORE SEPTEMBER FIRST, TWO THOUSAND ELEVEN WAS LICENSED BY
LAW  THEN  IN EFFECT TO CONDUCT VIDEO LOTTERY GAMING PURSUANT TO SECTION
SIXTEEN HUNDRED SEVENTEEN-A OF THE TAX LAW AND ONLY UPON THE PREMISES OR
A CONTIGUOUS PREMISES WHERE SUCH VIDEO LOTTERY GAMING WAS AUTHORIZED  TO
BE  CONDUCTED.  THE  NET  PROCEEDS DERIVED BY THE STATE FROM SUCH CASINO
GAMING SHALL BE APPLIED EXCLUSIVELY TO OR IN AID OR SUPPORT OF EDUCATION
IN THIS STATE AS THE LEGISLATURE MAY PRESCRIBE EXCEPT THAT NO MORE  THAN
TEN  PERCENT  OF SUCH FUNDS MAY BE USED FOR THE SUPPORT OF LOCAL GOVERN-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08481-02-3

S. 4173                             2

MENT IN THE HOST COMMUNITIES AS  PRESCRIBED  BY  THE  LOCAL  LEGISLATIVE
BODY.
  2. AS CONSIDERATION FOR THE OPERATION OF CASINO GAMBLING AT A FACILITY
PURSUANT  TO  SUBDIVISION  ONE  OF  SECTION  NINE  OF ARTICLE ONE OF THE
CONSTITUTION, THE STATE GAMING COMMISSION SHALL CAUSE THE INVESTMENT  IN
THE  RACING  INDUSTRY  OF  A  PORTION  OF THE VENDOR FEE RETAINED BY THE
FACILITY IN THE MANNER SET FORTH AS FOLLOWS:
  (A) EACH SUCH GAMBLING FACILITY SHALL DEDICATE A PORTION OF ITS VENDOR
FEE SOLELY FOR THE PURPOSE OF ENHANCING PURSES AT  EACH  REGIONAL  TRACK
LOCATED  WITHIN  A  FORTY  MILE  RADIUS  OF SUCH GAMBLING FACILITY IN AN
AMOUNT EQUALING SEVEN AND ONE-HALF PERCENT OF TOTAL REVENUE  WAGERED  AT
THE  FACILITY  AFTER  PAYMENT  FOR  PRIZES  WHEN  SUCH REGIONAL TRACK IS
CONDUCTING A LIVE RACE MEETING PROVIDED THAT  NO  REGIONAL  TRACK  SHALL
RECEIVE RACING SUPPORT PAYMENTS FOR THE PURPOSE OF ENHANCING PURSES THAT
IS  LESS THAN THE PURSE ENHANCEMENTS RECEIVED IN CALENDAR YEAR TWO THOU-
SAND TWELVE AS CONSIDERATION FOR THE OPERATION OF VIDEO  LOTTERY  GAMING
PURSUANT TO SECTION SIXTEEN HUNDRED TWELVE OF THE TAX LAW; AND
  (B) EACH SUCH GAMBLING FACILITY SHALL DEDICATE A PORTION OF ITS VENDOR
FEE  SOLELY FOR THE PURPOSE OF RACING OPERATIONS OR CAPITAL EXPENDITURES
AT EACH REGIONAL TRACK LOCATED WITHIN A FORTY MILE RADIUS OF SUCH GAMBL-
ING FACILITY IN AN AMOUNT EQUALING FOUR PERCENT OF TOTAL REVENUE WAGERED
AFTER PAYOUT FOR PRIZES WHEN SUCH REGIONAL TRACK IS  CONDUCTING  A  LIVE
RACE  MEETING.    IN ADDITION, ONE AND ONE-HALF PERCENT OF TOTAL REVENUE
WAGERED AT THE GAMBLING FACILITY  AFTER  PAY-OUT  FOR  PRIZES  SHALL  BE
DISTRIBUTED  TO  THE  APPROPRIATE BREEDING FUND FOR THE MANNER OF RACING
CONDUCTED BY SUCH TRACK.
  3. IN THE EVENT TWO OR MORE REGIONAL TRACKS  ARE  LOCATED  WITHIN  THE
FORTY  MILE  RADIUS OF THE CASINO GAMBLING FACILITY AND ARE CONDUCTING A
LIVE RACE MEETING, THE RACING SUPPORT PAYMENTS PROVIDED FOR IN  SUBDIVI-
SION TWO OF THIS SECTION SHALL BE APPORTIONED EQUALLY.
  4. IN THE EVENT TWO OR MORE GAMBLING FACILITIES ARE LOCATED WITHIN THE
FORTY MILE RADIUS OF A REGIONAL TRACK THE RACING SUPPORT PAYMENTS SHOULD
BE APPORTIONED EQUALLY.
  5.  FOR  THE  PURPOSE  OF THIS SECTION THE TERM "REGIONAL TRACK" SHALL
ALSO MEAN A GAMBLING FACILITY WHICH CONDUCTS A LIVE RACE MEETING  PURSU-
ANT TO ARTICLES TWO, THREE AND FOUR OF THIS CHAPTER.
  S 3. This act shall take effect immediately.

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