NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A918
SPONSOR: Pretlow TITLE OF BILL: An act to amend the racing, pari-mutuel wagering and
breeding law, in relation to payments by off-track betting corporations
to regional licensed harness tracks
PURPOSE OR GENERAL IDEA OF BILL: This bill revises the hold harmless
provisions that OTBs provide to harness tracks for the privilege of
broadcasting additional nighttime thoroughbred events at OTB parlors.
This is being done because most harness tracks now have Video Lottery
facilities which are earning harness tracks substantial profits. Addi-
tional money retained by OTBs by this measure is to be transferred to
local governments to support their operations.
SUMMARY OF SPECIFIC PROVISIONS: Sections 1 and 2: Amend the Racing &
Wagering Law section 1016 to reduce the "dark day" (the day when NYRA is
not conducting a race meet) payment obligations applicable to off-track
betting corporations (OTBs) from I y- percent of total daily pools on
out-of-state thoroughbred races to - of 1 percent of such pools. In
addition, it eliminates the requirement that a regional licensed harness
track itself not display simulcasts of, or accept wagering upon, such
out-of-state thoroughbred races in order to be eligible to receive, or
share in the receipt of such payments from its regional OTB. The amended
payment obligations would only apply during the first 120 days in each
calendar year.
Section 3: Amends Racing & Wagering Law section 1017 to clarify that
maintenance of effort payments by regional OTBs to the licensed harness
tracks in their regions for calendar year 2012 are to be adjusted for
any reduction in the number of racing programs conducted by any such
track in that calendar year below the number of racing programs
conducted by that track during the base year 2004. This section would
also terminate such maintenance of effort obligations for calendar years
subsequent to 2013. It also reduces the additional payment obligations
of regional OTBs with respect to aggregate annual statewide handle on
nighttime thoroughbred simulcast races during a phase-out period prior
to full elimination thereof at the conclusion of the phase-out period.
JUSTIFICATION: Chapter 62 of the Laws of 2003 amended the Racing &
Wagering Law on the acceptance of wagering upon and the display of
simulcasts of races run at out-of-state thoroughbred tracks, A mainte-
nance of effort obligation was imposed on OTBs, measured by the level of
commissions received by regional harness tracks in 2002 as derived from
OTB wagering on out-of-state harness races conducted after 6 PM. The
2003 amendments also required OTBs to make supplemental payments to the
harness industry to the extent that aggregate statewide handle on night-
time thoroughbred races exceeded $100 million.
Since the maintenance of effort and additional payment obligations were
imposed 3 years ago, the net effect has been to reduce the revenue
retained by OTBs which could have then been transferred to local govern-
ments. Despite the expanded wagering and simulcasting authorizations
enacted in 2003, the incremental revenue increases from elimination of
the nighttime thoroughbred simulcasting wagering restrictions have prov-
en to be insufficient to replace the revenue transferred to the harness
racing industry to hold them harmless for the OTB authorization to
broadcast nighttime thoroughbred racing. Since, nearly all harness
tracks are operating video lottery games, this has helped to increase
revenue for the harness tracks and purses. However, requiring OTBs to
continue the maintenance of effort and other payments are placing ineq-
uitable burdens on the regional OTB system. This bill would address the
unintended inequities instituted in the 2003 law and enable OTBs to
retain revenue which can be transferred to local governments.
PRIOR LEGISLATIVE HISTORY: A.3674A (2011) - referred to racing and
wagering A.6916 (2010) - referred to racing and wagering A.3647a
(2012)-referred to racing and wagering A.3333 (2014)- referred to racing
and wagering
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.
EFFECTIVE DATE: This act shall take effect immediately.
