§ 905. Combination of New York wagers with wagers made in other states
or foreign countries. 1. The combination of New York wagers with wagers
of the same type made in other states or foreign countries is hereby
authorized pursuant to rules and regulations of the commission so as to
produce a common pari-mutuel pool for the calculation of odds and the
determination of pay-outs from such pool, which payout shall be, as far
as may be consistent herewith, the same for all winning bets of such
type irrespective of whether a wager is placed in this state or in
another state or foreign country.

2. The combination of wagers on New York races. a. The commission may
authorize the combination of out-of-state or foreign wagers on horse
races in New York state with the same type of wagers made in New York
state at the site of the statewide interface designated by the
commission for the combination of on-track and off-track wagers made in
New York state.

b. In this regard the commission shall enact rules and regulations
including but not limited to insuring the following standards: that the
out-of-state or foreign wagering operator is duly authorized to conduct
such wagering by the laws of the applicable out-of-state or foreign
government and is of satisfactory ethical and financial repute; that all
such wagers are made in a format consistent with the format for such
wagers in New York state as to number of betting entries and the
combination of such entries into coupled entries and fields; that if the
laws of such other state or foreign country permit, that such wagers
shall be subject to the identical retention and breakage rates as
pertain at the site of the New York interface; that if the laws of such
other state or foreign country prescribe a retention or breakage rate
different from that in New York state it would not be contrary to the
public interest to compute odds and payouts for such out-of-state or
foreign wagers consistent with such law; that if it is consistent with
the public interest to compute odds and payouts for such out-of-state or
foreign wagers according to retention or breakage rates different from
those in New York state, that the site of the New York interface is
ready and able to carry out such computations consistent with the
formulas hereinafter prescribed; that in regard to foreign wagers, that
for computational purposes all foreign wagers to be combined shall be
converted into American dollars at the prevailing exchange rates
established by a money center bank on the date of the race (although
breakage shall be computed consistent with foreign currency
denominations); that other than the variations caused by retention or
breakage computations that all odds and pay-outs shall be computed and
calculated, refunds or cancellations awarded or allowed, and
overpayments or underpayments corrected solely in accordance with the
applicable rules in New York state whose laws shall govern all disputes
pertinent thereto; that the means, methods and times of transmission of
wagering data necessary to the proper implementation of this subdivision
shall be as prescribed and approved by the commission; that all entities
whose wagers are so combined have agreed that the odds and final
pay-offs shall be computed in accordance with the data available for
computation at the site of the statewide interface at the start of the
race and that pay-off computations in accordance therewith shall be
final regardless of mistakes in transmission or failures to transmit or
receive all wagers and that the out-of-state or foreign operators shall
be solely responsible for claims asserted in that regard for wagers made
through such operators; that the out-of-state or foreign operator
consents to be subject to audit by the commissioner of taxation and
finance or his or her designee to verify the accuracy and completeness
of all wagers required to be transmitted by it hereunder; and such other
rules and regulations as may be deemed necessary and appropriate by the
commission.

c. If different retention or breakage rates than those prevailing at
the site of the New York interface are prescribed by the laws governing
such out-of-state or foreign betting operator, and the commission is
satisfied that it would not be contrary to the public interest to accept
such wagers for combination with New York wagers, calculations of the
current odds and final pay-off prices shall be made as follows:

(i) All New York state and out-of-state and foreign wagers of the same
type shall be combined into single pools for calculation.

(ii) As many tentative payout prices as there are different retention
and breakage rates applicable (including the prevailing New York rate)
shall be calculated on the basis of returning the appropriate rate of
return, less breaks after imposition of each such rate of retention and
breaks.

(iii) To each such out-of-state or foreign operator shall be allocated
an amount sufficient for it to pay the appropriate pay-off to holders of
winning wagers placed with it together with the applicable retention
amount on its total wagers.

(iv) To each New York operator shall be allocated an amount sufficient
for it to pay the appropriate pay-off to holders of winning wagers
placed with it together with the applicable New York retention amount on
its total wagers.

(v) The total amount of the combined pool less the combined total of
all allocations as determined in subparagraphs (iii) and (iv) of this
paragraph shall be credited to a special breakage account. The amount in
such account giving appropriate weight to rates established for breakage
shall be allocated as breaks among all operators in the combined pool in
accordance with the rules and regulations of the commission. Should a
minus pool eventuate in which the total combined pool is insufficient to
reimburse each operator for the allocation due to it then the allocation
due to each such operator shall be reduced as may be appropriate and
such operator shall be responsible for satisfying its liability from its
own operating capital.

d. No tax or surcharge shall be imposed by this state on any
out-of-state or foreign wagering operator participating in any combined
pool herein. Nothing in this paragraph, however, shall impair the
imposition of any tax or charge by this state on the consideration
received from an out-of-state or foreign operator by a New York operator
for its consent to wagering on its races, transmitting the simulcast
thereof, or the agreeing to combination of bets into its pools.

e. The operator of the site of the statewide interface shall be
responsible for the actual collection or transmittal of funds in
settlement of the liabilities of all operators participating in the
combined pool.

f. Nothing herein shall entitle any operator or person claiming
therefrom to participation in any share of the retention or payouts
allocated to another operator participating in the combined pool.

g. Nothing herein shall affect the validity of any surcharge imposed
upon the winning pay-offs computed herein as may be prescribed by the
laws of this state or another state or foreign country.

h. Nothing herein shall be construed to authorize or prescribe any act
contrary to federal law.

3. Combining New York wagers on horse races conducted in other states
or foreign countries with wagers on such races made elsewhere.

a. The commission may authorize the combination of wagers made in New
York state upon the outcome of out-of-state or foreign horse races with
wagers made upon such races elsewhere in accordance with rules and
regulations of the commission which shall include but not be limited to
the following provisions:

(i) that if such combination is authorized that all New York state
operators must participate therein to assure uniform New York odds and
pay-outs;

(ii) that if the out-of-state or foreign computation is made on the
basis of different retention or breakage rates and (A) such out-of-state
or foreign laws do not permit New York wagers to be computed in
accordance with New York retention and breakage rates, that such
variation does not exceed twenty percent and shall be allocated pro rata
among winning wagers in New York state and recipients of such retention
and breakage rates in New York state, or (B) if such out-of-state or
foreign laws do permit New York bets to be computed in accordance with
New York retention and breakage rates that such rates shall be applied
and that the out-of-state or foreign operator doing such calculations is
willing and able to properly perform such function;

(iii) that the out-of-state or foreign rules governing such wagers are
understandable to New York wagerers and in the best judgment of the
commission shall not deviate substantially from customary and standard
pari-mutuel practice in general;

(iv) that the New York operators are able to perform such transmission
and computer retrieval functions as may be required;

(v) that such combination will enhance the best interest of racing
generally; and

(vi) such other rules and regulations as may be deemed necessary and
appropriate by the commission.

b. Nothing herein shall be construed to authorize or prescribe any act
contrary to federal law.

4. In those instances in which the retention rates of the out-of-state
track are different from the retention rates authorized in this section,
distribution to each of the entities entitled to receive payment under
section five hundred twenty-seven or article ten of this chapter after
payment of state taxes and regulatory fees shall be adjusted
proportionately in an appropriate manner to account for higher or lower
retention rates. For purposes of determining payment on out-of-state
wagers the retention rate shall be the amount sufficient to pay holders
of winning wagers plus any payments required to be made to the
out-of-state track which exceeds two per centum of handle.