N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 318: Disposition of on-track pari-mutuel pools; harness races

§ 318. Disposition of on-track pari-mutuel pools; harness races. 1.

Except as otherwise provided by law, every association or corporation

authorized under this article to conduct pari-mutuel betting at a

harness horse race meeting on races run thereat shall distribute all

sums deposited in any pari-mutuel pool to the holders of winning tickets

therein, provided such tickets be presented for payment prior to April

first of the year following the year of their purchase, less an amount

that shall be established and retained by such racing association or

corporation of between fourteen and twenty percent of the total deposits

in pools resulting from regular bets, less sixteen to twenty-two percent

of the total deposits in pools resulting from multiple bets, less twenty

to thirty percent of the total deposits in pools resulting from exotic

bets, and less twenty to thirty-six percent of the total betting

deposits in pools resulting from super exotic bets. The retention rate

to be established is subject to the prior approval of the commission.

Such rate may not be changed more than once per calendar quarter to be

effective on the first day of the calendar quarter.

"Exotic bets" and "multiple bets" shall have the meanings set forth in

section five hundred nineteen of this chapter. "Super exotic bets" shall

have the meaning set forth in subdivision four of section three hundred

one of this article.

a. Of the sum so retained from on-track pari-mutuel betting pools,

such association or corporation authorized to operate in Westchester or

Nassau county: (i) shall pay to the commissioner of taxation and finance

as a reasonable tax for the privilege of conducting pari-mutuel betting

at races run at race meetings held by such corporation or association, a

tax, which is hereby levied, in the applicable percentage set forth in

subdivision one of section one hundred thirty-six of this chapter as

limited by subdivision two of section one hundred thirty-six of this

chapter. Any such association or corporation shall, for any twelve-month

period beginning on April first in nineteen hundred ninety and any year

thereafter, expend an amount equal to at least one-half of one percent

of its on-track bets during the immediately preceding calendar year for

enhancements consisting of capital improvements as defined by section

three hundred nineteen of this article, repairs to its physical plant,

structures, and equipment used in its racing or wagering operations, and

five special events at each track in each calendar year, not otherwise

conducted in the ordinary course of business, the purpose of which shall

be to encourage, attract and promote track attendance and encourage new

and continued patronage, which events shall be subject to the approval

of the commission for purposes of this subdivision. In the determination

of the amounts expended for such enhancements, the commission shall

consider the average of the two immediately preceding twelve-month

calendar periods.

(ii) except as otherwise provided in this paragraph an amount equal to

six and eight-tenths percent of the total pool resulting from on-track

regular bets, an amount equal to seven and ninety-five one hundredths

percent of the total pool resulting from on-track multiple bets, an

amount equal to ten and one-half percent of the total pool resulting

from on-track exotic bets, an amount equal to fifteen and one-half

percent of the total daily pool resulting from on-track super exotic

bets shall be used exclusively for purses, of which an amount of not

less than ninety percent shall be used exclusively for purses for

overnight races conducted by such association or corporation. Such

amounts may be reduced upon an application approved by the commission

and an agreement between the licensed harness racing corporation or

association and the representative horsemen's organization as a

condition to reduce the amounts of retained percentages as provided for

in this section. However, of the total amount available for purses, an

amount as determined by contractual obligations between an organization

representing at least fifty-one percent of the owners and trainers using

the facilities of such association or corporation for racing, training

or stabling purposes and the association or corporation, shall be used

for the administrative purposes of said organization and for such

welfare and medical plans for regularly employed backstretch employees

principally employed at the facilities of such corporation or

association as provided by said organization, provided, however, that

eligibility for benefits in such plans shall not be conditioned upon

membership in such organization by any employee or employer thereof, and

any denial of eligibility for benefits in such plans which, upon

investigation and review by the commission, is determined to have

resulted from a person, firm, association, corporation or organization

knowingly aiding in or permitting eligibility for benefits being

conditioned upon membership in such organization shall subject such

organization to the penalties imposed under sections three hundred ten

and three hundred twenty-one of this article but the ratio between the

amounts actually expended for such welfare and medical plans and the

cost actually incurred in administering such welfare and medical plans

for fiscal years of such corporation or association, on or after July

twenty-fourth, nineteen hundred eighty-one, shall not be less than the

ratio between such amounts actually expended and such costs actually

incurred for the fiscal year immediately prior to such date. Such

organization shall annually on or before July first certify to the

commission that it represents at least fifty-one percent of such owners

and trainers and provide copies of such certification to such

association or corporation. Any other organization claiming to represent

at least fifty-one percent of such owners and trainers may file a

challenge with the commission within fifteen days of such original

certification. The commission shall examine such claim and may undertake

studies and conduct hearings to determine the validity of such claim.

Within sixty days of receiving such challenge and based upon the

findings of such studies and hearings, the commission shall render a

decision on the validity of such claim and advise such organizations and

association or corporation of its determination. Upon receipt of such

original certification by such organization, the association or

corporation shall make such payments to said organization and, in the

event of a challenge brought to any other organization, such payments

shall continue to be made until such time as the commission renders its

decision on such challenge; and

(iii) the balance of the retained percentage of such pools may be held

by such association or corporation for its own use and purposes except

as provided in paragraph c of this subdivision and in subdivision four

of section three hundred one of this article, provided, however, that

the commission shall report annually, on or before July first, to the

director of the budget, the chair of the senate finance committee and

the chair of the assembly ways and means committee the extent to which

such corporations and associations used such retained percentages for

operations, maintenance, capital improvements, advertising and

promotion, administration and general overhead and evaluate the

effectiveness and make recommendations with respect to the application

of the rates of taxation as provided for in subparagraph (i) of this

paragraph in accomplishing the objectives stated therein. Such report

shall also specify the amounts of such retained percentages used for

investments not directly related to racing activities and such amounts

used to declare dividends or other profit distributions, additions to

capital stock, its sale and transfer and additions to retained earnings.

Such reports shall also include an analysis of any such agreements or

proposals to conduct or otherwise expand wagers authorized under article

ten of this chapter and present its conclusions with respect to the

conduct of such wagering, the nature of such proposals and agreements,

and recommendations to ensure the future maintenance of the intent of

this article and article ten of this chapter.

b. (i) Of the sums retained by any other licensed harness racing

association or corporation other than those described in paragraph a of

this subdivision, such association or corporation shall pay to the

commissioner of taxation and finance as a reasonable tax for the

privilege of conducting pari-mutuel betting at races run at race

meetings held by such corporation or association, a tax, which is hereby

levied, in the applicable percentage set forth in subdivision one of

section one hundred thirty-six of this chapter, as limited by

subdivision two of section one hundred thirty-six of this chapter. Any

such racing association or corporation shall for any twelve-month period

beginning on April first in nineteen hundred ninety and any year

thereafter, expend an amount equal to at least one-half of one percent

of its on-track bets during the immediately preceding calendar year for

enhancements consisting of capital improvements as defined by section

three hundred nineteen of this article, repairs to its physical plant,

structures, and equipment used in its racing or wagering operations, not

otherwise conducted in the ordinary course of business, the purpose of

which shall be to encourage, attract and promote track attendance and

encourage new and continued patronage, which events shall be subject to

the approval of the commission for purposes of this subdivision. In this

regard, expenditures by a county agricultural society pursuant to

section three hundred nineteen of this article shall be credited to the

applicable harness racing association or corporation for this purpose.

In the determination of the amounts expended for such enhancements, the

commission may consider the immediately preceding twelve-month calendar

period or the average of the two immediately preceding twelve-month

calendar periods. The commission shall report annually, before July

first, to the director of the budget, the chair of the senate finance

committee and the chair of the assembly ways and means committee the

extent to which such corporations and associations used such retained

percentages for operations, maintenance, capital improvements,

advertising and promotion, administration and general overhead and

evaluate the effectiveness and make recommendations with respect to the

application of the rates of taxation as provided for in this

subparagraph in accomplishing the objectives stated therein. Such report

shall also specify the amounts of such retained percentages used for

investments not directly related to racing activities and such amounts

used to declare dividends or other profit distributions, additions to

capital stock, its sale and transfer and additions to retained earnings.

Such reports shall also include an analysis of any such agreements or

proposals to conduct or otherwise expand wagers authorized under article

ten of this chapter and present its conclusions with respect to the

conduct of such wagering, the nature of such proposals and agreements,

and recommendations to ensure the future maintenance of the intent of

this article.

(ii) Of the sums retained by such association or corporation, an

amount equal to one and three-quarters percent of the total pool

resulting from on-track regular, multiple and exotic bets shall be used

exclusively for the purpose of increasing purses awarded in overnight

races conducted by such association or corporation. Such amounts shall

be in addition to purse moneys otherwise provided pursuant to existing

contractual obligations. In this regard an amount equal to twelve

percent of the total bets in super exotic pools shall be used for purses

in lieu of any such contractual obligations that might otherwise apply

to purses to be awarded on super exotic bets. Any portion of such amount

not so used during any year shall be so used during the following year.

In addition to the amounts required in this paragraph, fifty percent of

all additional sums retained, as a result of tax reductions provided in

this section after September first, nineteen hundred ninety-four to

qualified licensed harness racing associations, shall be used

exclusively for purposes of increasing purses awarded in overnight races

conducted by such association or corporation, provided that such

association or corporation has entered into a written agreement with its

representative horsemen's organization on and after September first,

nineteen hundred ninety-four. Notwithstanding anything contained herein

to the contrary, in a harness special betting district the amount 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

association. The balance of the retained percentage of such pool may be

held by such corporation or association for its own use and purposes.

(iii) The commission shall as a condition of racing require an

association authorized to operate in areas other than Westchester or

Nassau county to withhold one percent of all purses and to pay such sum

to the horsemen's organization representing the owners and trainers

using the facilities of such association that had a contract with the

association governing the conditions of racing on January first,

nineteen hundred ninety-two, as determined by the commission.

Any other horsemen's organization may apply to the commission to be

approved as the qualified organization to receive payment of the one

percent of all purses by submitting to the commission proof of both,

that (i) such organization represents more than fifty-one percent of all

the owners and trainers using the same facilities and (ii) the

horsemen's organization previously approved as qualified by the

commission does not represent fifty-one percent of all the owners and

trainers using the same facilities. If the commission is satisfied that

the documentation submitted with the application of any other horsemen's

organization is conclusive with respect to subparagraphs (i) and (ii) of

this paragraph, the commission may approve the applicant as the

qualified recipient organization.

In the best interests of racing, upon receipt of such an application,

the commission may direct the payments to the previously qualified

horsemen's organization to continue uninterrupted, or it may direct the

payments to be withheld and placed in interest-bearing accounts for a

period not to exceed ninety days, during which time the commission shall

review and approve or disapprove the application. Funds held in such

manner shall be paid to the organization approved by the commission. In

no event shall the commission accept more than one such application in

any calendar year from the same horsemen's organization.

The funds authorized to be paid by the commission are to be used

exclusively for the benefit of those horsemen racing in New York state

through the administrative purposes of such qualified organization,

benevolent activities on behalf of backstretch employees, and for the

promotion of equine research.

c. Of the sums retained by any harness racing association or

corporation, an amount equal to one percent of the total pools resulting

from on-track regular, multiple and exotic bets and an amount equal to

three percent of the total pools resulting from on-track super exotic

bets shall be paid to the agriculture and New York state horse breeding

development fund.

d. Every harness racing association or corporation shall pay to the

commission as a regulatory fee, which fee is hereby levied, six-tenths

of one percent of the total daily on-track pari-mutuel pools of such

association or corporation.

2. The state tax levied adjusted for any credits in this section shall

be paid to the commissioner of taxation and finance, on the last

business day of each month and shall cover taxes due for the period from

the sixteenth day of the preceding month through the fifteenth day of

the current month provided, however, that such payments required to be

made on March thirty-first shall include all taxes due and accruing

through the last full week of racing in March of the current year or as

otherwise determined by the commissioner, and shall be accompanied by a

report under oath showing the total of all such contributions together

with such other information as the commissioner may require. A penalty

of five percent and interest at the rate of one percent per month from

the date the report is required to be filed to the date of payment of

the tax shall be payable in case any tax imposed by this section is not

paid when due. If the commissioner determines that any moneys received

under this section were paid in error, the commissioner may cause the

same to be refunded without interest out of any moneys collected

thereunder, provided an application therefor is filed with it within one

year from the time the erroneous payment was made. Such taxes, interest

and penalties when collected, after the deduction of refunds of taxes

erroneously paid, shall be paid by the commissioner into the general

fund of the state treasury.

3. Except as otherwise provided by law no county, city, town, village

or other political subdivision of the state may impose, levy or collect

a tax on admission fees or tax on admission, on bets made by patrons in

the form of purchases of pari-mutuel tickets or upon such tickets, on

pari-mutuel pools, on breaks, on dividends or payments made to winning

bettors, or on that part of the pari-mutuel pools or breaks to be

retained by harness horse racing associations or corporations under this

section.

4. Notwithstanding any other provisions of this chapter, there shall

be no pari-mutuel tax imposed upon the compensation received by any

harness racing association or corporation in consideration for (a)

permission to have wagering conducted outside this state on races run by

such association or corporation, and (b) the simulcasting outside this

state of races run by such association or corporation, except for such

permission or such simulcasting as may be granted to an off-track

betting operator in the state of Connecticut by a harness racing

association or corporation located in Nassau or Westchester county. Any

such association or corporation so simulcasting to an off-track betting

operator in the state of Connecticut shall pay to the New York

commissioner of taxation and finance a reasonable tax for such

permission and privilege for such simulcasting, which is hereby levied,

at the following rates: one and one-tenth percent of total daily regular

and multiple bets; three and one-tenth percent of total daily exotic

bets; and three and one-half percent of total daily super exotic bets.

5. Maintenance of pari-mutuel racing activity. For any calendar year

commencing on or after January first, nineteen hundred eighty-nine, a

harness racing association or corporation shall not conduct fewer

pari-mutuel programs and pari-mutuel races at its facilities than ninety

percent of the programs and races so conducted during nineteen hundred

eighty-five or during nineteen hundred eighty-six, whichever is less,

unless such association or corporation demonstrates to the satisfaction

of the commission good cause due to factors beyond the control of such

association or corporation or because the commission finds that it would

be uneconomical or impractical for such association or corporation to be

assigned or conduct the prescribed number.

6. Notwithstanding any provision of law to the contrary, in the

absence of a contract between the licensed harness racing corporation or

association and the representative horsemen's organization, the

previously negotiated contract related to welfare, medical, or

retirement plans, including any associated costs, provided by the

horsemen's organization to participants in racing at the licensed

harness racing facility shall be automatically extended for a one-time

period of twelve months commencing from the date that the previously

negotiated contract expired. The amounts shall be paid monthly from the

horsemen's gross purse enhancement amount from video lottery gaming.