N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 527: Disposition of off-track pools; state tax

§ 527. Disposition of off-track pools; state tax. Each regional

corporation conducting off-track betting shall distribute all sums

deposited in any pari-mutuel pool through such corporation to the

holders of winning tickets therein, providing such tickets be presented

for payment prior to April first of the year following the year of their

purchase, less an amount that it shall retain at the same rate

established by the track accepting wagers from each such regional

corporation.

1. The disposition of the retained commission from pools resulting

from regular, multiple or exotic bets, as the case may be, whether

placed on races run within a region or outside a region, conducted by

racing corporations, harness racing associations or corporations,

quarter horse racing associations or corporations or races run outside

the state shall be governed by the tables in paragraphs a and b of this

subdivision. There shall be paid by each regional corporation

conducting off-track betting, as a reasonable tax imposed upon the

retained commission for the privilege of conducting off-track

pari-mutuel betting, which tax is hereby levied, a percentage of all

money wagered on live races through such corporation, which shall be

payable in the manner set forth in this section and in subdivision one

of section one hundred thirty-six of this chapter. Each off-track

betting corporation shall pay to the commission as a regulatory fee,

which fee is hereby levied, six-tenths of one percent of the total daily

pools of such corporation. Each corporation shall also pay twenty

percent of the breaks derived from bets on out-of-state harness races

and fifty percent of the breaks derived from bets on all other

out-of-state races to the agriculture and New York State horse breeding

and development fund and to the thoroughbred breeding and development

fund, the total of such payments to be apportioned fifty percent to each

such fund. For the purposes of this section, the New York city, Suffolk,

Nassau, and the Catskill regions shall constitute a single region and

any thoroughbred track located within the Capital District region shall

be deemed to be within such single region. A "regional meeting" shall

refer to either harness or thoroughbred meetings, or both, except that a

franchised corporation shall not be a regional track for the purpose of

receiving distributions from bets on thoroughbred races conducted by a

thoroughbred track in the Catskill region conducting a mixed meeting.

With the exception of a harness racing association or corporation first

licensed to conduct pari-mutuel wagering at a track located in Tioga,

Saratoga or Westchester county after January first, two thousand five,

racing corporations first licensed to conduct pari-mutuel racing after

January first, nineteen hundred eighty-six or a harness racing

association or corporation first licensed to conduct pari-mutuel

wagering at a track located in Genesee County after January first, two

thousand five, and quarter horse tracks shall not be "regional tracks";

if there is more than one harness track within a region, such tracks

shall evenly divide payments made pursuant to the tables in paragraphs a

and b of this subdivision when neither track is running. In the event a

track elects to reduce its retained percentage from any or all of its

pari-mutuel pools, the payments to the track holding the race and the

regional track required by paragraphs a and b of this subdivision shall

be reduced in proportion to such reduction. Nothing in this section

shall be construed to authorize the conduct of off-track betting

contrary to the provisions of section five hundred twenty-three of this

article.

a. Regular and multiple bets:

Track

holding Regional

race track

Pools on races run by:

Franchised corporations:

in region;..................... 3.50 N/A

out-region, during a regional

meeting;....................... 1.00 2.50

out-region, no regional

meeting;....................... 1.75 1.75

Racing corporations

in special

betting district:

in-special betting district;... 3.80 N/A

out-district, during a regional

meeting;....................... 1.00 2.80

out-district, no regional

meeting;....................... 1.90 1.90

Harness racing associations or

corporations within Suffolk,

Nassau, or Catskill regions:

in region;..................... 4.00 N/A

out-region, during a regional

meeting;....................... 1.00 3.00

out-region, no regional

meeting;....................... 2.00 2.00

Harness racing associations or

corporations:

in-special betting

district;...................... 4.00 N/A

out-district, during a

regional meeting;.............. 1.00 3.00

out-district, no regional

meeting;....................... 2.00 2.00

Other harness racing associations

or corporations:

in region;..................... 4.00 N/A

out-region, during a regional

meeting;....................... 1.00 3.00

out-region, no regional

meeting;....................... 2.00 2.00

Quarter horse racing associations

or corporations;............... 3.50 N/A

Out-of-state tracks:............. 3.50 divided

pursuant to

paragraph

g of this

subdivision

b. Exotic bets:

Track

holding Regional

race track

Pools on races run by:

Franchised corporations:

in region;..................... 6.50 N/A

out-region, during a regional

meeting;....................... 2.00 4.50

out-region, no regional

meeting;....................... 3.25 3.25

Racing corporations

in special

betting district:

in-special betting districts;.. 6.80 N/A

out-district, during a regional

meeting;....................... 2.00 4.80

out-district, no regional

meeting;....................... 3.40 3.40

Harness racing associations or

corporations within Suffolk,

Nassau, or Catskill

regions:

in region;..................... 7.00 N/A

out-region, during a regional

meeting;....................... 2.00 5.00

out-region, no regional

meeting;....................... 3.50 3.50

Harness racing associations

or corporations:

in-special betting

district;...................... 7.00 N/A

out-district, during a

regional meeting;.............. 2.00 5.00

out-district, no regional

meeting;....................... 3.50 3.50

Other harness racing associa-

tions or corporations:

in-region;..................... 7.00 N/A

out-region, during a

regional meeting;.............. 2.00 5.00

out-region, no regional

meeting;....................... 3.50 3.50

Quarter horse racing associa-

tions or corporations;......... 6.50 N/A

Out-of-state tracks:............. 6.50 divided

pursuant to

paragraph

g of this

subdivision

c. Super Exotic Bets:

Track

holding Regional

race track

Pools on races run by:

Franchised corporations:

in region;..................... 12.00 N/A

out-region, during a regional

meeting;....................... 3.00 10.00

out-region, no regional

meeting;....................... 6.00 6.00

Racing corporations

in special

betting district:

in-special betting districts;.. 12.00 N/A

out-district, during a regional

meeting;....................... 3.00 10.00

out-district, no regional

meeting;....................... 6.00 6.00

Harness racing associations or

corporations within Suffolk,

Nassau, or Catskill regions:

in-region;..................... 12.00 N/A

out-region, during a regional

meeting;....................... 3.00 10.00

out-region, no regional

meeting;....................... 6.00 6.00

Harness racing associations

or corporations:

in-special betting

district;...................... 12.00 N/A

out-district, during a

regional meeting;.............. 3.00 10.00

out-district, no regional

meeting;....................... 6.00 6.00

Other harness racing associations

or corporations:

in-region;..................... 12.00 N/A

out-region, during a

regional meeting;.............. 3.00 10.00

out-region, no regional

meeting;....................... 6.00 6.00

d. For the portion of the Western region included within a

thoroughbred special betting district and not within a harness special

betting district, when no thoroughbred race meeting is conducted by a

racing corporation located within such thoroughbred special district,

the distribution of the retained commission to "regional tracks" by such

regional corporation derived from wagers placed within such special

betting district shall be divided as follows:

(i) when a harness corporation located in such district is conducting

a meet the full amount to such harness corporation; and when a harness

corporation in the region but not located in such district is conducting

a meet, forty percent to the thoroughbred racing corporation and sixty

percent to the harness corporation conducting a meet;

(ii) when no racing is being conducted, forty percent to the

thoroughbred racing corporation and the balance divided equally between

the harness racing corporations located in such region; and

(iii) when no racing is being conducted and no more than one harness

racing association is licensed during the calendar year to conduct a

race meeting, fifty percent to the thoroughbred racing corporation and

fifty percent to the harness racing association located in such region.

e. For the portions of the Capital District, Catskill, Central and

Western regions included within a harness racing special betting

district, except those portions described in paragraph e of this

subdivision, the harness track located in such special district shall be

the "regional track" for the purposes of the distributions made pursuant

to paragraphs a and b of this subdivision.

f. For the portions of the Catskill, Central and Western regions

included in both a thoroughbred special betting district and a harness

special betting district, the distribution of the retained commission to

"regional tracks" by such regional corporations derived from wagers

placed within such portions of such regions shall be divided as follows:

(i) when a harness corporation located in the harness special betting

district is conducting a meet and no thoroughbred race meeting is being

conducted by a racing corporation located in the thoroughbred special

betting district, the full amount to such harness association;

(ii) when a thoroughbred corporation located in the thoroughbred

special betting district is conducting a meet and no harness race

meeting is being conducted by a harness association located in the

harness special betting district, the full amount to such thoroughbred

corporation;

(iii) when no racing is being conducted the amount to be divided

evenly between the thoroughbred track located in such thoroughbred

special betting district and the harness track located in such harness

special betting district.

g. With respect to the amounts payable to track operators from the

retained commission on pools resulting from thoroughbred or harness

races outside this state, the regional corporation shall first pay any

contractual obligation owed to the out-of-state track operator, or to

another state or entity thereof, as the case may be. The balance of such

amounts shall be divided as follows:

(i) for the betting region composed of the New York city, Suffolk and

Nassau regions and the portion of the Catskill region outside a special

betting district: when both harness and thoroughbred meets are in

progress in such betting region, the balance to the association or

corporation holding the same type of meet as the out-of-state race; when

only a harness meet is in progress in such betting region, the balance

to the harness track operator; when only a thoroughbred meet is in

progress in such betting region, the balance to the thoroughbred track

operator; when no meet is in progress, fifty percent of the balance to

the franchised corporation and the remainder divided among harness

racing corporations or associations within such betting region;

(ii) for the Capital District region and the portion of the Western

region outside a special betting district: when a harness meet is in

progress in such region and a thoroughbred meet is in progress outside a

special betting district, the balance to whichever operator is

conducting the same type of meet as the out-of-state race; when no

harness meet is in progress, the balance to the racing association

outside a special betting district; and when no meet is in progress

within such region and no thoroughbred meet is in progress outside a

special betting district, fifty percent of the balance to the racing

association outside a special betting district and the remainder to the

licensed harness racing corporations or associations within such region;

(iii) for the portion of the Western region within a thoroughbred

special betting district but not within a harness special betting

district: when a harness meet and a thoroughbred meet are in progress

within such region and the district, the balance to the association or

corporation conducting the same type of meet as the out-of-state or

out-of-region race; when a harness meet is in progress in such region

but no thoroughbred meet is in progress in the special betting district,

the balance to the harness track operator within such region; when only

a thoroughbred meet is in progress in such betting region, the balance

to the thoroughbred track operator; and when no meet is in progress

within such region the balance is divided, forty percent to the

thoroughbred racing corporation within the district and the remainder

divided between the harness racing associations or corporations within

the region provided, however, that if no more than one harness racing

association or corporation is licensed to conduct a race meeting, fifty

percent to the thoroughbred racing corporation within the district and

fifty percent to the licensed harness racing association within the

region;

(iv) for the portions of the Capital District, Catskill, Central and

Western regions included in a harness special betting district: when a

harness meeting is in progress in such harness special betting district

and a thoroughbred meeting is in progress outside the thoroughbred

special betting district, the balance to the association or corporation

holding the same kind of race; when no harness meet is in progress, the

balance to the racing corporation holding a thoroughbred race meeting

outside the thoroughbred special betting district; when a harness

meeting is in progress in the harness special betting district and no

thoroughbred meeting is in progress outside the thoroughbred special

betting district, the balance to the harness track operating in such

harness special betting district; when no harness meet is being held

within such harness special betting district and no thoroughbred meet is

being held outside the thoroughbred special betting district, fifty

percent of such amount to the harness racing corporation in such harness

special betting district and fifty percent to the thoroughbred track

operator outside the thoroughbred special betting district;

(v) for the portions of the Catskill and Western regions included in

both a thoroughbred special betting district and a harness special

betting district: when a harness meet and a thoroughbred meet are in

progress within both such districts the balance to the association or

corporation conducting the same type of meet as the out-of-state race;

when a harness meet is in progress but no thoroughbred meet the balance

to the harness track operator within such district; when a thoroughbred

meet is in progress but no harness meet the balance to the thoroughbred

track operator in the district; and when no meet is in progress the

balance to be divided evenly between the harness track operator in the

harness special betting district and the thoroughbred operator located

within the thoroughbred special betting district;

(vi) notwithstanding any contrary provision contained in this section,

the portion of retained commissions from off-track pools distributable

to the track holding the race shall be for regular and multiple bets:

five and three-quarters percent and for exotic bets: seven and

three-quarters percent for the three races commonly referred to as the

Triple Crown consisting of the Kentucky Derby, the Preakness and the

Belmont Stakes, run respectively at Churchill Downs, Kentucky, at

Pimlico, Maryland and at Belmont Park, New York; additionally the same

commissions shall apply to the series of races known as the Breeders'

Cup and the portion distributable from retained commissions shall be

paid to the Breeders' Cup, ltd. irrespective of whether the races are

held at a track within or without the state; provided, however, that as

a condition precedent to the obligation of a regional corporation to

make the foregoing distributions as required in this subparagraph with

respect to wagers on the Belmont Stakes, such regional corporation shall

have accepted wagers on at least one or both of the immediately

preceding Kentucky Derby and Preakness races; and provided further that

the distributable portion of such retained commissions with respect to

the Belmont Stakes shall be deemed to include the additional amounts

payable pursuant to the provisions of paragraph b of subdivision three

of this section; and provided further, notwithstanding the foregoing

provisions of this subparagraph, that of the retained commissions

resulting from off-track wagers placed in a special betting district on

the Belmont Stakes, the track holding the race shall receive one per

centum from regular and multiple bets and two percent from exotic bets,

and the thoroughbred track conducting racing within such district shall

receive four and three-quarters percent from regular and multiple bets,

and five and three-quarters percent from exotic bets.

2. Payment of the state tax imposed by this section shall be made to

the commissioner by each such regional corporation 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 such information as it 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 the 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 by the commissioner 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 the commissioner within one year from the time the erroneous

payment is 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. a. Of the portion of retained commission on off-track pools

distributed to racing corporations, one-half shall be used exclusively

for the purpose of increasing purses, including stakes, premiums and

prizes, awarded to horses in races conducted by such associations or

corporations and any portion of said fraction not so used during any

year shall be used during the following year, failing which it shall be

returned to the regional off-track betting corporations on or before

April first in the year following the year in which it is not so used to

be distributed prior to June first to participating local governments in

the same proportions as the distributions to such governments in the

prior calendar year, provided, however, in a harness special betting

district the portion of retained commissions 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.

* b. In addition to any other amount required by this section, of the

portion of commissions retained by a regional corporation, an amount

equal to one and eighty-five hundredths percent of regular pools and an

amount equal to two and thirty-five hundredths percent of multiple pools

and two and thirty-five hundredths percent of exotic pools derived from

wagers on races conducted by a franchised corporation shall be paid to

such corporation to be used exclusively for the purpose of increasing

purses, including stakes, premiums and prizes. An additional two and

sixty-five hundredths shall be paid to the regional harness track. When

there is no regional meeting, an amount equal to four and sixty-five

hundredths shall be paid to such nonprofit racing association of which

two and nine tenths shall be used exclusively for the purpose of

increasing purses, including stakes, premiums and prizes. An additional

one and eighty-five hundredths shall be paid to the regional harness

track. In addition to any other amounts required to be paid to a

franchised corporation, for the period July twenty-first, nineteen

hundred ninety-five through July twenty-fourth, two thousand one, an

additional one and twenty-five hundredths percent of multiple pools

derived from wagers on races conducted by a franchised corporation shall

be paid to such association for its own use and purposes. Any portion of

said amount not so used during any year shall be used during the

following year, failing which it shall be returned to the regional

corporation on or before April first in the year following the year in

which it is not so used to be distributed to the participating local

governments.

* NB Effective until July 1, 2026

* b. In addition to any other amount required by this section, of the

portion of commissions retained by a regional corporation, an amount

equal to one and one-quarter percent of regular and multiple pools and

three-quarters of one percent of exotic pools derived from wagers on

races conducted by a nonprofit racing association shall be paid to such

nonprofit racing association to be used exclusively for the purpose of

increasing purses, including stakes, premiums and prizes. An additional

two and sixty-five hundredths shall be paid to the regional harness

track. When there is no regional meeting, an amount equal to four and

sixty-five hundredths shall be paid to such nonprofit racing association

of which two and nine-tenths shall be used exclusively for the purpose

of increasing purses, including stakes, premiums and prizes. An

additional one and eighty-five hundredths shall be paid to the regional

harness track. Any portion of said amount not so used during any year

shall be used during the following year, failing which it shall be

returned to the regional corporation on or before April first in the

year following the year in which it is not so used to be distributed to

the participating local governments.

* NB Effective July 1, 2026

c. In addition to any other amount required by this section, of the

portion of commissions retained by a regional corporation, an amount

equal to one and one-tenth percent of regular and multiple pools and

six-tenths of one percent of exotic pools derived from wagers on races

conducted by a thoroughbred racing corporation, licensed by the

commission, other than a franchised corporation, shall be paid to such

thoroughbred racing corporation to be used exclusively for the purpose

of increasing purses, including stakes, premiums and prizes. Any portion

of such amount not so used during any year shall be used during the

following year, failing which such amount shall be returned to the

regional corporation on or before April first in the year following the

year in which it is not so used to be distributed to the participating

local governments.

4. a. Of the portion of retained commission on off-track pools

distributed to harness racing associations or corporations authorized to

conduct racing in Westchester or Nassau county, one-half shall be used

exclusively for the purpose of increasing purses, including stakes,

premiums and prizes awarded to horses in races conducted by such

associations or corporations.

b. The portion of retained commission on off-track pools distributed

to other harness or quarter horse racing associations or corporations

shall be deemed to be part of the on-track commission for purposes of

calculating purses, including stakes, premiums and prizes, awarded to

horses in races conducted by such associations or corporations.

5. a. One percent of daily pools derived from bets on harness races

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

development fund except that for super exotic betting pools such amount

shall be three percent of such bets.

b. An amount equal to one-half of one percent of total daily off-track

pari-mutuel pools resulting from regular, multiple and exotic bets and

three percent of super exotic bets on thoroughbred or steeplechase races

shall be paid to the New York state thoroughbred breeding and

development fund.

c. From the total breaks retained by a regional corporation, an amount

equal to ten percent of the breaks derived from bets on out-of-state

quarter horse races shall be paid to the New York state quarter horse

breeding and development fund.

5-a. Notwithstanding any other provision of law, a regional

corporation shall retain, in addition to those amounts described in the

opening paragraph of this section, from regular and multiple bets on

races run at tracks electing to withhold pursuant to section two hundred

thirty-seven or section three hundred nineteen of this chapter, an

amount equal to one percent of pools resulting from total wagering at

such tracks, one-half of which shall be paid to such tracks or

non-profit county agricultural society, except that the full one percent

shall be paid to a thoroughbred track in the Catskill region conducting

a mixed meeting, to be used exclusively for capital improvements

pursuant to sections two hundred thirty-seven and three hundred nineteen

of this chapter and subject to the rules and regulations of the

commission and one-half to be retained by the regional corporation for

its own corporate purposes.

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

corporations 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 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.

7. In addition to any other amount required by this section, of the

portion of commissions retained by a regional corporation, an amount

equal to one percent of multiple pools derived from wagers on races

conducted by a thoroughbred racing corporation, licensed by the board,

other than a franchised corporation, shall be paid to such thoroughbred

racing corporation and held by such corporation for its own use and

purposes, except that an amount equal to one-half percent shall be used

exclusively for the purpose of increasing purses, including stakes,

premiums and prizes, awarded to horses in races conducted by such

corporation. Any portion of said amount not so used during any year

shall be used during the following year, failing which it shall be

returned to the regional corporation on or before April first in the

year following the year in which it is not so used to be distributed to

the participating local governments.

8. From the nineteen percent of the total deposits in pools resulting

from multiple bets on thoroughbred races outside this state, two percent

shall be paid to a franchised corporation to be used exclusively for the

purpose of increasing purses, including stakes, premiums and prizes. Any

portion of said amount not so used during any year shall be used during

the following year, failing which it shall be returned to the regional

corporation on or before April first in the year following the year in

which it is not so used to be distributed to the participating local

governments. Notwithstanding the provisions of section fifteen of

chapter three hundred sixty-three of the laws of nineteen hundred

eighty-four, the provisions of this subdivision shall not expire.