N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 905: Combination of New York wagers with wagers made in other states or foreign countries

§ 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

retention 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 percent of handle.