N.Y. Tax Law § 1612: Disposition of revenues

§ 1612. Disposition of revenues. a. The division shall pay into an

account, to be known as the lottery prize account, under the joint

custody of the comptroller and the commissioner, within one week after

collection of sales receipts from a lottery game, such moneys necessary

for the payment of lottery prizes but not to exceed the following

percentages, plus interest earned thereon:

(1) sixty percent of the total amount for which tickets have been sold

for a lawful lottery game introduced on or after the effective date of

this paragraph, subject to the following provisions:

(A) such game shall be available only on premises occupied by licensed

lottery sales agents, subject to the following provisions:

(i) if the licensee does not hold a license issued pursuant to the

alcoholic beverage control law to sell alcoholic beverages for

consumption on the premises, then the premises must have a minimum

square footage greater than two thousand five hundred square feet;

(ii) notwithstanding the foregoing provisions, television equipment

that automatically displays the results of such drawings may be

installed and used without regard to the square footage if such premises

are used as:

(I) a commercial bowling establishment, or

(II) a facility authorized under the racing, pari-mutuel wagering and

breeding law to accept pari-mutuel wagers;

(B) the rules for the operation of such game shall be as prescribed by

regulations promulgated and adopted by the division, provided however,

that such rules shall provide that no person under the age of twenty-one

may participate in such games on the premises of a licensee who holds a

license issued pursuant to the alcoholic beverage control law to sell

alcoholic beverages for consumption on the premises; and, provided,

further, that such regulations may be revised on an emergency basis not

later than ninety days after the enactment of this paragraph in order to

conform such regulations to the requirements of this paragraph; or

(2) sixty-four and one-fourth percent of the total amount for which

tickets have been sold for the "Instant Cash" game in which the

participant purchases a preprinted ticket on which dollar amounts or

symbols are concealed on the face or the back of such ticket, provided

however up to five new games may be offered during the fiscal year,

seventy-four and one-fourth percent of the total amount for which

tickets have been sold for such five games in which the participant

purchases a preprinted ticket on which dollar amounts or symbols are

concealed on the face or the back of such ticket; or

(3) fifty-five percent of the total amount for which tickets have been

sold for any joint, multi-jurisdiction, and out-of-state lottery except

as otherwise provided in paragraph one of subdivision b of this section

for any joint, multi-jurisdiction, out-of-state video lottery gaming; or

(4) fifty percent of the total amount for which tickets have been sold

for games known as: (A) the "Daily Numbers Game" or "Win 4", discrete

games in which the participants select no more than three or four of

their own numbers to match with three or four numbers drawn by the

commission for purposes of determining winners of such games, (B) "Pick

10", offered no more than twice daily, in which participants select from

a specified field of numbers a subset of ten numbers to match against a

subset of numbers to be drawn by the commission from such field of

numbers for the purpose of determining winners of such game, (C) "Take

5", offered no more than twice daily, in which participants select from

a specified field of numbers a subset of five numbers to match against a

subset of five numbers to be drawn by the commission from such field of

numbers for purposes of determining winners of such game; or

(5) forty percent of the total amount for which tickets have been sold

for: (A) "Lotto", offered no more than twice daily, a discrete game in

which all participants select a specific subset of numbers to match a

specific subset of numbers, as prescribed by rules and regulations

promulgated and adopted by the commission, from a larger specific field

of numbers, as also prescribed by such rules and regulations and (B)

with the exception of the game described in paragraph one of this

subdivision, such other state-operated lottery games that the commission

may introduce, offered no more than twice daily, commencing on or after

forty-five days following the official publication of the rules and

regulations for such game.

(6) the commission shall make a report on the revenues derived from

the additional lottery drawings pursuant to paragraphs four and five of

this subdivision and shall submit such report to the governor, the

speaker of the assembly, and the temporary president of the senate by

the first day of March two thousand twenty-two.

The moneys in the lottery prize account shall be paid out of such

account on the audit and warrant of the comptroller on vouchers

certified or approved by the director or his or her duly designated

official.

Prize money derived from ticket sales receipts of a particular game

and deposited in the lottery prize account in accordance with the

percentages set forth above may be used to pay prizes in such game.

Balances in the lottery prize account identified by individual games may

be carried over from one fiscal year to the next to ensure proper payout

of games.

b. 1. Notwithstanding section one hundred twenty-one of the state

finance law, on or before the twentieth day of each month, the

commission shall pay into the state treasury, to the credit of the state

lottery fund created by section ninety-two-c of the state finance law,

not less than forty-five percent of the total amount for which tickets

have been sold for games defined in paragraph five of subdivision a of

this section during the preceding month, not less than forty-five

percent of the total amount for which tickets have be sold for games

defined in paragraph four of subdivision a of this section during the

preceding month, not less than thirty-five percent of the total amount

for which tickets have been sold for games defined in paragraph three of

subdivision a of this section during the preceding month, not less than

twenty and three-fourths percent of the total amount for which tickets

have been sold for games defined in paragraph two of subdivision a of

this section during the preceding month, provided however that for games

with a prize payout of seventy-four and one-fourth percent of the total

amount for which tickets have been sold, the commission shall pay not

less than ten and three-fourths percent of sales into the state treasury

and not less than twenty-five percent of the total amount for which

tickets have been sold for games defined in paragraph one of subdivision

a of this section during the preceding month; and the balance of the

total revenue after payout for prizes for games known as "video lottery

gaming," including any joint, multi-jurisdiction, and out-of-state video

lottery gaming, (i) less ten percent of the total revenue wagered after

payout for prizes to be retained by the division for operation,

administration, and procurement purposes;

(ii) less a vendor's fee the amount of which is to be paid for serving

as a lottery agent to the track operator of a vendor track or the

operator of any other video lottery gaming facility authorized pursuant

to section sixteen hundred seventeen-a of this article. The amount of

the vendor's fee shall be calculated as follows:

(A) when a vendor track is located within development zone one as

defined by section thirteen hundred ten of the racing, pari-mutuel

wagering and breeding law, at a rate of thirty-nine and one-half percent

of the total revenue wagered at the vendor track after payout for prizes

pursuant to this chapter;

(B) when a vendor track is located within zone two as defined by

section thirteen hundred ten of the racing, pari-mutuel wagering and

breeding law, the rate of the total revenue wagered at the vendor track

after payout for prizes pursuant to this chapter shall be as follows:

(1) forty-three and one-half percent for a vendor track located more

than fifteen miles but less than fifty miles from a destination resort

gaming facility authorized pursuant to article thirteen of the racing,

pari-mutuel wagering and breeding law;

(2) forty-nine percent for a vendor track located within fifteen miles

of a destination resort gaming facility authorized pursuant to article

thirteen of the racing, pari-mutuel wagering and breeding law;

(3) fifty-one percent for vendor track located more than fifteen miles

but less than fifty miles from a Native American class III gaming

facility as defined in 25 U.S.C. §2703(8);

(4) fifty-six percent for a vendor track located within fifteen miles

of a Native American class III gaming facility as defined in 25 U.S.C

§2703(8);

(5) forty-nine percent for a video lottery gaming facility authorized

pursuant to paragraph five of subdivision a of section sixteen hundred

seventeen-a of this article;

(B-1) Notwithstanding subparagraph (B) of this paragraph, for the

period commencing on April first, two thousand nineteen and ending on

March thirty-first, two thousand twenty, for a vendor track that is

located within Ontario County, such vendor fee shall be thirty-seven and

one-half percent of the total revenue wagered at the vendor track after

payout for prizes pursuant to this chapter;

(B-2) Notwithstanding subparagraph (B) of this paragraph, for the

period commencing on April first, two thousand nineteen and ending on

March thirty-first two thousand twenty, for a vendor track that is

located within Saratoga County, such vendor fee shall be thirty-nine and

one-half percent of the total revenue wagered at the vendor track after

payout for prizes pursuant to this chapter;

(C) when a video lottery facility is located at Aqueduct racetrack, at

a rate of fifty percent of the total revenue wagered at the video

lottery gaming facility after payout for prizes pursuant to this

chapter;

(D) when a video lottery gaming facility is located in either Nassau

or Suffolk counties and is operated by a corporation established

pursuant to section five hundred two of the racing, pari-mutuel wagering

and breeding law, at a rate of forty-five percent of the total revenue

wagered at the video lottery gaming facility after payout for prizes

pursuant to this chapter.

* (E) notwithstanding clause (B) of this subparagraph, beginning on

June first, two thousand twenty-five, when the vendor track is located

in the county of Genesee and within forty miles of a Native American

class III gaming facility as defined in 25 U.S.C. §2703(8), at a rate of

fifty-six percent of the total revenue wagered at the vendor track after

payout for prizes pursuant to this chapter; provided, however, that the

following additional provisions shall apply to such vendor track:

(1) From the vendor fee amount equivalent to fifty-six percent of the

total revenue wagered at the vendor track after payout for prizes

pursuant to this clause, a portion equivalent to five percent of the

total revenue wagered at the vendor track after payout for prizes shall

be defined as and hereinafter be referred to as the "additional vendor

fee".

(2) Such additional vendor fee shall be accounted for separately by

the vendor track and shall be used exclusively for the following

purposes, in proportions determined annually by such vendor track in

accordance with a plan submitted to the gaming commission pursuant to

subclause four of this clause:

(A) reducing the costs paid by non-executive and non-managerial

employees of such vendor track for healthcare coverage offered by such

vendor track;

(B) increasing salaries, hourly wages, or benefits paid to

non-executive and non-managerial employees of such vendor track, or

funding increases in the number of full-time equivalent non-executive

and non-managerial employees; and

(C) supplementing distributions payable to participating counties or

municipalities as required under existing law.

(3) Additional vendor fee revenue utilized pursuant to this clause

shall not be included in any calculation used to determine amounts

payable pursuant to subclause two of this clause or payments required

under subclause two of this clause to the appropriate breeding fund

established pursuant to article three of the racing, pari-mutuel

wagering and breeding law.

(4) (A) Such vendor track shall annually submit a plan to the

commission, no later than sixty days prior to the beginning of its

fiscal year, detailing the allocation and use of the additional vendor

fee revenue among the purposes specified in subclause two of this clause

for the upcoming fiscal year. Such plan shall include specific

projections for cost reductions in employee healthcare, increases in

employee compensation specifying the job titles or categories benefiting

therefrom, and supplemental amounts for local distributions.

(B) Such vendor track shall submit a plan to the commission, no later

than sixty days after the effective date of this clause, detailing the

allocation and use of such additional vendor fee among the purposes

specified in subclause two of this clause for the remainder of fiscal

year two thousand twenty-five. Such plan shall include specific

projections for cost reductions in employee healthcare, increases in

employee compensation specifying the job titles or categories benefiting

therefrom, and projections of supplemental amounts of local

distributions. Such plan shall also detail allocations already made

between this act going into effect and the date such plan has been

submitted to the commission.

(5) Such vendor track shall also submit an annual report to the gaming

commission, the governor, the temporary president of the senate, and the

speaker of the assembly, no later than ninety days after the end of each

fiscal year, detailing the actual allocation and use of such additional

vendor fee during the preceding fiscal year. Such report shall specify

the amounts applied to each purpose outlined in subclause two of this

clause, provide data demonstrating the impact on employee healthcare

costs and compensation including the specific job titles or categories

that received increased compensation pursuant to item (B) of subclause

two of this clause, detail the supplemental distributions made to

localities, compare actual use to the plan, and provide justification

for any significant variances.

(6) (A) The additional vendor fee shall only be used to supplement

amounts previously allocated or appropriated by the corporation for the

purposes stated in subclause two of this clause and may not be used to

replace or backfill such amounts.

(B) The gaming commission shall have the authority to audit the use of

such additional vendor fee by such vendor track. If the gaming

commission determines, after notice and an opportunity for a hearing,

that such funds have been used for purposes other than those authorized

in subclause two of this clause or inconsistent with the plan, including

a failure to benefit non-executive and non-managerial employees as

required by item (B) of subclause two of this clause, the gaming

commission may impose monetary penalties pursuant to its authority under

the racing, pari-mutuel wagering and breeding law and may require that

an amount equivalent to any funds used in a manner inconsistent with the

provisions of this clause shall be expended for authorized purposes

pursuant to an amended plan.

(7) Nothing contained in this clause shall affect any existing

collective bargaining agreement or the obligation of such vendor track

to negotiate terms and conditions of employment with any certified

employee representative.

* NB Repealed April 1, 2030

* (iii) less any additional vendor's fees. Additional vendor's fees

shall be calculated as follows:

(A) when a vendor track is located within region one and is located

within Orange county or region two of development zone two, as such zone

is defined in section thirteen hundred ten of the racing, pari-mutuel

wagering and breeding law, or is located within region six of such

development zone two and is located within Ontario county, the

additional vendor fee received by the vendor track shall be calculated

pursuant to subclause one of this clause; provided, however, such

additional vendor fee shall not exceed ten percent.

(1) The additional vendor fee is a percentage of the total revenue

wagered at the vendor track after payout for prizes pursuant to this

chapter. That percentage is calculated by subtracting the effective tax

rate on all taxable gross gaming revenue paid by a gaming facility

within the same region as the vendor track from the percentage that is

ninety percent less the vendor track's vendor fee percentage and less

the additional vendor fee percentage authorized pursuant to clause (D)

of this subparagraph. For purposes of this clause, Seneca and Wayne

counties shall be deemed to be located within region six of development

zone two.

(2) The additional vendor fee paid pursuant to this clause shall

commence with the state fiscal year beginning on April first, two

thousand nineteen and shall be paid to a vendor track no later than

ninety days after the close of the fiscal year. The additional vendor

fee authorized by this clause shall only be applied to revenue wagered

at a vendor track while a gaming facility in the same region as that

vendor track is open and operating pursuant to an operation certificate

issued pursuant to section thirteen hundred thirty-one of the racing,

pari-mutuel wagering and breeding law.

** (B) for a vendor track that is located within Oneida county, within

fifteen miles of a Native American class III gaming facility, such

additional vendor fee shall be six and four-tenths percent of the total

revenue wagered at the vendor after payout for prizes pursuant to this

chapter. The vendor track shall forfeit this additional vendor fee for

any time period that the vendor track does not maintain at least seventy

percent of full-time equivalent employees as they employed in the year

two thousand sixteen.

** NB Repealed March 31, 2027

(C) (1) for a vendor track that is located within development zone one

as defined by section thirteen hundred ten of the racing, pari-mutuel

wagering and breeding law, such additional vendor fee shall be six and

five-tenths percent of the total revenue wagered at the vendor track

after payout for prizes pursuant to this chapter. At the conclusion of

each fiscal year, if the effective tax rate on all taxable gross gaming

revenue paid by a gaming facility that is licensed under title two-A of

article thirteen of the racing, pari-mutuel wagering and breeding law,

and located within New York city is below forty-four percent, the vendor

track shall receive an additional calculated amount no later than ninety

days after the close of the fiscal year. For the purposes of this

clause, an additional calculated amount shall be the differential

between forty-four percent and the effective tax rate on all taxable

gross gaming revenue paid by the applicable gaming facility applied to

revenue wagered at such vendor track after payout for prizes pursuant to

this chapter. The vendor track must maintain at least ninety percent of

full-time equivalent gaming employees as they employed in the year two

thousand twenty-five to receive the additional vendor fee and additional

calculated amount. The additional vendor fee and additional calculated

amount authorized by this clause shall only be applied to revenue

wagered at a vendor track while the applicable gaming facility

referenced pursuant to this clause is open and operating pursuant to an

operation certificate issued pursuant to section thirteen hundred

thirty-one of the racing, pari-mutuel wagering and breeding law.

(2) To be eligible to receive the additional vendor fee authorized

pursuant to this clause, a vendor track must submit an application to

the gaming commission. Such application shall identify the number of

full-time equivalent gaming employees employed at the facility in

calendar year two thousand twenty-five.

(3) The additional vendor fee authorized by this clause shall be

applicable commencing on the date that an eligible facility submits

their application under subclause two of this clause to the gaming

commission.

(D) (1) five percent for the following:

(I) any video lottery gaming facility located in either Nassau or

Suffolk county that is operated by a corporation established pursuant to

section five hundred two of the racing, pari-mutuel wagering and

breeding law;

(II) a vendor track located within region one and located within

Orange county;

(III) any vendor track located within fifteen miles of a Native

American class III gaming facility as defined in 25 U.S.C §2703(8); and

(IV) a vendor track located more than fifteen miles but less than

fifty miles from a destination resort gaming facility authorized

pursuant to article thirteen of the racing, pari-mutuel wagering and

breeding law.

(2) To be eligible to receive the additional vendor fee authorized

pursuant to this clause, a vendor track or video lottery gaming facility

must submit an application to the gaming commission. Such application

shall identify the number of full-time equivalent gaming employees

employed at the facility in calendar year two thousand twenty-five.

(3) On July first of each year beginning on July first, two thousand

twenty-seven, each track or facility shall certify to the gaming

commission the number of full-time equivalent gaming employees employed

by the facility for the preceding calendar year. If the number of

full-time equivalent gaming employees certified to the gaming commission

is less than the number of full-time equivalent gaming employees

employed by the facility in the year two thousand twenty-five, the

gaming commission may reduce the additional vendor fee received by such

track or facility pursuant to this clause by the following amount:

(I) if the number of certified full-time equivalent gaming employees

is less than one hundred percent but more than or equal to ninety-five

percent of the original amount, one percent;

(II) if the number of certified full-time equivalent gaming employees

is less than ninety-five percent but more than or equal to ninety

percent of the original amount, two percent;

(III) if the number of certified full-time equivalent gaming employees

is less than ninety percent but more than or equal to eighty-five

percent of the original amount, three percent;

(IV) if the number of certified full-time equivalent gaming employees

is less than eighty-five percent but more than or equal to eighty

percent of the original amount, four percent; and

(V) if the number of certified full-time equivalent gaming employees

is less than eighty percent of the original amount, the full five

percent.

(4) The additional vendor fee authorized by this clause shall be

applicable commencing on the date that an eligible facility submits its

application under subclause two of this clause to the gaming commission.

* NB Effective until May 28, 2029

* (iii) less any additional vendor's fees. Additional vendor's fees

shall be calculated as follows:

(A) when a vendor track is located within region one and is located

within Orange county or region two of development zone two, as such zone

is defined in section thirteen hundred ten of the racing, pari-mutuel

wagering and breeding law, or is located within region six of such

development zone two and is located within Ontario county, the

additional vendor fee received by the vendor track shall be calculated

pursuant to subclause one of this clause; provided, however, such

additional vendor fee shall not exceed ten percent.

(1) The additional vendor fee is a percentage of the total revenue

wagered at the vendor track after payout for prizes pursuant to this

chapter. That percentage is calculated by subtracting the effective tax

rate on all taxable gross gaming revenue paid by a gaming facility

within the same region as the vendor track from the percentage that is

ninety percent less than the percentage of the vendor track's vendor

fee. For purposes of this clause, Seneca and Wayne counties shall be

deemed to be located within region six of development zone two.

(2) The additional vendor fee paid pursuant to this clause shall

commence with the state fiscal year beginning on April first, two

thousand nineteen and shall be paid to a vendor track no later than

ninety days after the close of the fiscal year. The additional vendor

fee authorized by this clause shall only be applied to revenue wagered

at a vendor track while a gaming facility in the same region as that

vendor track is open and operating pursuant to an operation certificate

issued pursuant to section thirteen hundred thirty-one of the racing,

pari-mutuel wagering and breeding law.

** (B) for a vendor track that is located within Oneida county, within

fifteen miles of a Native American class III gaming facility, such

additional vendor fee shall be six and four-tenths percent of the total

revenue wagered at the vendor after payout for prizes pursuant to this

chapter. The vendor track shall forfeit this additional vendor fee for

any time period that the vendor track does not maintain at least seventy

percent of full-time equivalent employees as they employed in the year

two thousand sixteen.

** NB Repealed March 31, 2027

* NB Effective May 28, 2029

1-a. (i) Notwithstanding any provision of law to the contrary, any

operators of a vendor track or the operators of any other video lottery

gaming facility eligible to receive a capital award as of December

thirty-first, two thousand eighteen shall deposit from their vendor fee

into a segregated account an amount equal to four percent of the first

sixty-two million five hundred thousand dollars of revenue wagered at

the vendor track after payout for prizes pursuant to this chapter to be

used exclusively for capital investments, except for Aqueduct, which

shall deposit an amount equal to four percent of all revenue wagered at

the video lottery gaming facility after payout for prizes pursuant to

this chapter into a segregated account for capital investments.

(ii) Vendor tracks and video lottery gaming facilities shall be

permitted to withdraw funds for projects approved by the commission to

improve the facilities of the vendor track or video lottery gaming

facility which enhance or maintain the video lottery gaming facility

including, but not limited to hotels, other lodging facilities,

entertainment facilities, retail facilities, dining facilities, events

arenas, parking garages and other improvements and amenities customary

to a gaming facility, provided, however, the vendor tracks and video

lottery gaming facilities shall be permitted to withdraw funds for

unreimbursed capital awards approved prior to the effective date of this

subparagraph.

(iii) Any proceeds from the divestiture of any assets acquired through

these capital funds or any prior capital award must be deposited into

this segregated account, provided that if the vendor track or video

lottery gaming facility ceases use of such asset for gaming purposes or

transfers the asset to a related party, such vendor track or video

lottery gaming facility shall deposit an amount equal to the fair market

value of that asset into the account.

(iv) In the event a vendor track or video lottery gaming facility

ceases gaming operations, any balance in the account along with an

amount equal to the value of all remaining assets acquired through this

fund or prior capital awards shall be returned to the state for deposit

into the state lottery fund for education aid, except for Aqueduct,

which shall return to the state for deposit into the state lottery fund

for education aid all amounts in excess of the amount needed to fund a

project pursuant to an agreement with the operator to construct an

expansion of the facility, hotel, and convention and exhibition space

requiring a minimum capital investment of three hundred million dollars

and any subsequent amendments to such agreement.

(v) The comptroller or his legally authorized representative is

authorized to audit any and all expenditures made out of these

segregated capital accounts.

(vi) Notwithstanding subparagraphs (i) through (v) of this paragraph,

a vendor track located in Ontario county may withdraw up to two million

dollars from this account for the purpose of constructing a turf course

at the vendor track and may withdraw up to six million dollars in

calendar year two thousand nineteen for the purpose of covering ongoing

operating expenses.

(vii) Notwithstanding subparagraphs (i) through (vi) of this

paragraph, a vendor track located within Saratoga county may withdraw up

to three million dollars in calendar year two thousand nineteen for the

purpose of covering ongoing operating expenses.

(viii) Any balance remaining in the capital award account of a vendor

track or operator or any other video lottery gaming facility as of March

thirty-first, two thousand nineteen shall be transferred for deposit

into a segregated account established by this subparagraph.

1-b. Notwithstanding any provision of law to the contrary, free play

allowance credits authorized by the division pursuant to subdivision i

of section sixteen hundred seventeen-a of this article shall not be

included in the calculation of the total amount wagered on video lottery

games, the total amount wagered after payout of prizes, the vendor fees

payable to the operators of video lottery gaming facilities, fees

payable to the division's video lottery gaming equipment contractors, or

racing support payments.

1-c. Notwithstanding any provision of law to the contrary, the

operator of a vendor track or the operator of any other video lottery

gaming facility shall fund a marketing and promotion program out of the

vendor's fee. Each operator shall submit an annual marketing plan for

the review and approval of the commission and any other required

documents detailing promotional activities as prescribed by the

commission. The commission shall have the right to reject any

advertisement or promotion that does not properly represent the mission

or interests of the lottery or its programs.

2. As consideration for the operation of a video lottery gaming

facility, the division, shall cause the investment in the racing

industry of a portion of the vendor fee received pursuant to paragraph

one of this subdivision in the manner set forth in this subdivision.

With the exception of Aqueduct racetrack, a video lottery gaming

facility authorized pursuant to paragraph five of subdivision a of

section sixteen hundred seventeen-a of this article or a facility in the

county of Nassau or Suffolk operated by a corporation established

pursuant to section five hundred two of the racing, pari-mutuel wagering

and breeding law, each such track shall dedicate a portion of its vendor

fees, received pursuant to clause (A), (B), (B-1), (B-2), (C), or (D) of

subparagraph (ii) of paragraph one of this subdivision, for the purpose

of enhancing purses at such track, in an amount equal to eight and

three-quarters percent of the total revenue wagered at the vendor track

after pay out for prizes. One percent of the gross purse enhancement

amount, as required by this subdivision, shall be paid to the gaming

commission to be used exclusively to promote and ensure equine health

and safety in New York. Any portion of such funding to the gaming

commission unused during a fiscal year shall be returned to the video

lottery gaming operators on a pro rata basis in accordance with the

amounts originally contributed by each operator and shall be used for

the purpose of enhancing purses at such track. One and one-half percent

of the gross purse enhancement amount at a thoroughbred track, as

required by this subdivision, shall be paid to an account established

pursuant to section two hundred twenty-one-a of the racing, pari-mutuel

wagering and breeding law to be used exclusively to provide health

insurance for jockeys. In addition, with the exception of Aqueduct

racetrack, a video lottery gaming facility authorized pursuant to

paragraph five of subdivision a of section sixteen hundred seventeen-a

of this article or a facility in the county of Nassau or Suffolk

operated by a corporation established pursuant to section five hundred

two of the racing, pari-mutuel wagering and breeding law, one and

one-quarter percent of total revenue wagered at the vendor track after

pay out for prizes, received pursuant to clause (A), (B), (B-1), (B-2),

(C), or (D) of subparagraph (ii) of paragraph one of this subdivision,

shall be distributed to the appropriate breeding fund for the manner of

racing conducted by such track.

Provided, further, that nothing in this paragraph shall prevent each

track from entering into an agreement, not to exceed five years, with

the organization authorized to represent its horsemen to increase or

decrease the portion of its vendor fee dedicated to enhancing purses at

such track during the years of participation by such track, or to race

fewer dates than required herein.

3. Nothing in paragraph two of this subdivision shall affect any

agreement in effect on or before the effective date of this paragraph,

except that the obligation to pay funds to the gaming commission to

promote and ensure equine health and safety and the obligation to pay

funds to an account established pursuant to section two hundred

twenty-one-a of the racing, pari-mutuel wagering and breeding law to be

used exclusively to provide health insurance for jockeys shall supersede

any provision to the contrary in any such agreement.

c. 1. The specifications for video lottery gaming, including any

joint, multi-jurisdiction, and out-of-state video lottery gaming, shall

be designed in such a manner as to pay prizes that average no less than

ninety percent of sales.

2. Of the ten percent retained by the division for administrative

purposes, any amounts beyond that which are necessary for the operation

and administration of this pilot program shall be deposited in the

lottery education account.

d. Notwithstanding any law, rule or regulation to the contrary, any

successor to the New York Racing Association, Inc. with respect to the

operation and maintenance of video lottery gaming at Aqueduct racetrack

shall be deemed the successor to the New York Racing Association, Inc.

for purposes of being subject to existing contracts and loan agreements,

if any, entered into by the New York Racing Association, Inc. directly

related to the construction, operation, management and distribution of

revenues of the video lottery gaming facility at Aqueduct racetrack.

e. The video lottery gaming operator selected to operate a video

lottery terminal facility at Aqueduct will be subject to a memorandum of

understanding between the governor, temporary president of the senate

and the speaker of the assembly. Notwithstanding subparagraph (i) of

paragraph a of subdivision eight of section two hundred twelve of the

racing, pari-mutuel wagering and breeding law, the state, pursuant to an

agreement with the video lottery gaming operator to operate a video

lottery terminal facility at Aqueduct, may authorize, as part of such

agreement or in conjunction with such agreement at the time it is

executed, additional development at the Aqueduct racing facility. The

selection will be made in consultation with the franchised corporation,

but is not subject to such corporation's approval. The franchised

corporation shall not be eligible to compete to operate or to operate a

video lottery terminal facility at Aqueduct. The state will use its best

efforts to ensure that the video lottery terminal facility at Aqueduct

is opened as soon as is practicable and will, if practicable, pursue the

construction of a temporary video lottery terminal facility at Aqueduct

subject to staying within an agreed budget for such video lottery

terminal facility and subject to such temporary facility not having an

adverse impact on opening of the permanent facility at Aqueduct. To

facilitate the opening of the video lottery gaming facility at Aqueduct

as soon as is practicable, the division of the lottery may extend the

term of any existing contract related to the video lottery system.

f. As consideration for the operation of the video lottery gaming

facility at Aqueduct racetrack, the division shall cause the investment

in the racing industry of the following percentages of the vendor fee to

be deposited or paid, as follows:

1. Six and one-half percent of the total wagered after payout of

prizes for the first year of operation of video lottery gaming at

Aqueduct racetrack, seven percent of the total wagered after payout of

prizes for the second year of operation, and seven and one-half percent

of the total wagered after payout of prizes for the third year of

operation and thereafter, for the purpose of enhancing purses at

Aqueduct racetrack, Belmont Park racetrack and Saratoga race course. One

percent of the gross purse enhancement amount, as required by this

subdivision, shall be paid to the gaming commission to be used

exclusively to promote and ensure equine health and safety in New York.

Any portion of such funding to the gaming commission unused during a

fiscal year shall be returned on a pro rata basis in accordance with the

amounts originally contributed and shall be used for the purpose of

enhancing purses at such tracks. One and one-half percent of the gross

purse enhancement amount, as required by this subdivision, shall be paid

to an account established pursuant to section two hundred twenty-one-a

of the racing, pari-mutuel wagering and breeding law to be used

exclusively to provide health insurance for jockeys.

2. One percent of the total wagered after payout of prizes for the

first year of operation of video lottery gaming at Aqueduct racetrack,

one and one-quarter percent of the total wagered after payout of prizes

for the second year of operation, and one and one-half percent of the

total wagered after payout of prizes for the third year of operation and

thereafter, for an appropriate breeding fund for the manner of racing

conducted at Aqueduct racetrack, Belmont Park racetrack and Saratoga

race course.

3. (i) Four percent of the total revenue wagered after payout of

prizes to be deposited into an account of the franchised corporation

established pursuant to section two hundred six of the racing,

pari-mutuel wagering and breeding law to be used for capital

expenditures in maintaining and upgrading Aqueduct racetrack, Belmont

Park racetrack and Saratoga race course. Capital expenditures may

include funding the construction of and initially equipping a

state-based equine drug testing and research laboratory to be used

pursuant to subdivision seven of section nine hundred two of the racing,

pari-mutuel wagering and breeding law.

(ii) Notwithstanding subparagraph (i) of this paragraph, in the event

the state provides funds to the franchised corporation for the

renovation of Belmont Park racetrack, out of the amount payable to the

franchised corporation for capital expenditures pursuant to subparagraph

(i) of this paragraph during any state fiscal year, an amount pursuant

to the repayment agreement between the state and the franchised

corporation shall instead be deposited into the miscellaneous capital

projects fund, New York racing capital improvement fund as required to

repay the state for funds provided for the renovation of Belmont Park

racetrack. Any amount payable to the franchised corporation in any state

fiscal year for capital expenditures pursuant to subparagraph (i) of

this paragraph in excess of the amount pursuant to the repayment

agreement between the state and the franchised corporation shall be

deposited pursuant to subparagraph (i) of this paragraph. Once the state

has been fully reimbursed for the costs related to the renovation of

Belmont Park racetrack, this subparagraph shall no longer apply and

subparagraph (i) of this paragraph shall apply.

4. Three percent of the total revenue wagered after payout for prizes

to be deposited into an account of the franchised corporation

established pursuant to section two hundred six of the racing,

pari-mutuel wagering and breeding law to be used for general

thoroughbred racing operations at Aqueduct racetrack, Belmont Park

racetrack and Saratoga race course.

5. Paragraphs one, two, three and four of this subdivision shall be

known collectively as the "racing support payments".

f-1. As consideration for operation of video lottery gaming facility

located in the county of Nassau or Suffolk and operated by a corporation

established pursuant to section five hundred two of the racing,

pari-mutuel wagering and breeding law, the division shall cause the

investment in the racing industry of the following percentages of the

vendor fee to be deposited or paid as follows:

1. Two and three tenths percent of the total wagered after payout of

prizes for the purpose of enhancing purses at Aqueduct racetrack,

Belmont Park racetrack and Saratoga race course, provided, however, that

any amount that is in excess of the amount necessary to maintain purse

support from video lottery gaming at Aqueduct racetrack, Belmont Park

racetrack and Saratoga race course at the same level realized in two

thousand thirteen, to be adjusted by the consumer price index for all

urban consumers, as published annually by the United States department

of labor, bureau of labor statistics, shall instead be returned to the

commission.

2. five tenths percent of the total wagered after payout of prizes for

the appropriate breeding fund for the manner of racing at Aqueduct

racetrack, Belmont Park racetrack and Saratoga race course, provided,

however, that any amount that is in excess of the amount necessary to

maintain payments from video lottery gaming at Aqueduct racetrack at the

same level realized in two thousand thirteen, to be adjusted by the

consumer price index for all urban consumers, as published annually by

the United States department of labor, bureau of labor statistics, shall

instead be returned to the commission.

3. (i) one and three tenths percent of the total revenue wagered after

payout of prizes to be deposited into an account of the franchised

corporation established pursuant to section two hundred six of the

racing, pari-mutuel wagering and breeding law to be used for capital

expenditures in maintaining and upgrading Aqueduct racetrack, Belmont

Park racetrack and Saratoga race course, provided, however, that any

amount that is in excess of the amount necessary to maintain payments

for capital expenditures from video lottery gaming at Aqueduct racetrack

at the same level realized in two thousand thirteen, to be adjusted by

the consumer price index for all urban consumers, as published annually

by the United States department of labor, bureau of labor statistics,

shall instead be returned to the commission.

(ii) Notwithstanding subparagraph (i) of this paragraph, in the event

the state provides funds to the franchised corporation for the

renovation of Belmont Park racetrack, and in the event the amount

deposited pursuant to subparagraph (ii) of paragraph three of

subdivision f of this section is insufficient to make the required

repayment pursuant to such subparagraph during any state fiscal year, an

amount payable to the franchised corporation for capital expenditures

pursuant to subparagraph (i) of this paragraph shall instead be

deposited into the miscellaneous capital projects fund, New York racing

capital improvement fund to the extent necessary, when combined with the

amount set forth in subparagraph (ii) of paragraph three of subdivision

f of this section, to make any required repayment of funds provided by

the state related to the renovation of Belmont Park racetrack during

such fiscal year. Any amount payable to the franchised corporation in

any state fiscal year for capital expenditures pursuant to subparagraph

(i) of this paragraph in excess of the amount pursuant to the repayment

agreement between the state and the franchised corporation shall be

deposited pursuant to subparagraph (i) of this paragraph. Once the state

has been fully reimbursed for such costs related to the renovation of

Belmont Park racetrack, this subparagraph shall no longer apply and

subparagraph (i) of this paragraph shall apply.

4. Nine tenths percent of the total revenue wagered after payout for

prizes to be deposited into an account of the franchised corporation

established pursuant to section two hundred six of the racing,

pari-mutuel wagering and breeding law to be used for general

thoroughbred racing operations at Aqueduct racetrack, Belmont Park

racetrack and Saratoga race course, provided, however, that any amount

that is in excess of the amount necessary to maintain payments for

general thoroughbred racing operations from video lottery gaming at

Aqueduct racetrack at the same level realized in two thousand thirteen,

to be adjusted by the consumer price index for all urban consumers, as

published annually by the United States department of labor, bureau of

labor statistics, shall instead be returned to the commission.

g. In the event the state elects to construct a video lottery terminal

facility at the Aqueduct racetrack, all video lottery terminal revenues

payable to the video lottery gaming operator at the Aqueduct racetrack

remaining after payment of the racing support payments shall first be

used to repay the state's advances for (i) confirmation of the chapter

eleven plan of reorganization and cash advances for the franchised

corporation's operations following confirmation of the chapter eleven

plan of reorganization and (ii) the amount expended by the state to

construct such video lottery terminal facility at Aqueduct racetrack

pursuant to an agreement with the state. Subparagraphs (i) and (ii) of

this paragraph shall be defined as the state advance amount and the

amounts payable to the division of the lottery.

h. As consideration for the operation of a video lottery gaming

facility located in Orange county, the division shall cause the

investment in the racing industry at the following amount from the

vendor fee to be paid as follows:

As amount to the horsemen for purses at a licensed racetrack in

Sullivan county in an amount equal to eight and three-quarters percent

of the total revenue wagered at the video lottery gaming facility, after

pay out for prizes. The facility located in Orange county, as defined in

paragraph five of subdivision a of section sixteen hundred seventeen-a

of this article shall pay to the horsemen at a licensed racetrack at

Yonkers racetrack an amount to maintain purses for such horsemen at the

same dollar levels realized in two thousand eighteen, to be adjusted by

the consumer price index for all urban consumers, as published annually

by the United States department of labor bureau of labor statistics. In

addition, one and one-quarter percent of total revenue wagered at the

video lottery gaming facility after pay out for prizes, received

pursuant to clause (B) of subparagraph (ii) of paragraph one of

subdivision b of this section, shall be distributed to the appropriate

breeding fund for the manner of racing conducted by such track. In no

circumstance shall net proceeds of the lottery, including the proceeds

from video lottery gaming, be used for the payment of non-lottery

expenses of the gaming commission, administrative or otherwise.