N.Y. TAX Law § 1612 — New York Code / Act TAX / Article 34 / Section 1612
Disposition of revenues
Status: in_force

§ 1612. Disposition of revenues. a. The division shall pay into an\naccount, to be known as the lottery prize account, under the joint\ncustody of the comptroller and the commissioner, within one week after\ncollection of sales receipts from a lottery game, such moneys necessary\nfor the payment of lottery prizes but not to exceed the following\npercentages, plus interest earned thereon:\n  (1) sixty percent of the total amount for which tickets have been sold\nfor a lawful lottery game introduced on or after the effective date of\nthis paragraph, subject to the following provisions:\n  (A) such game shall be available only on premises occupied by licensed\nlottery sales agents, subject to the following provisions:\n  (i) if the licensee does not hold a license issued pursuant to the\nalcoholic beverage control law to sell alcoholic beverages for\nconsumption on the premises, then the premises must have a minimum\nsquare footage greater than two thousand five hundred square feet;\n  (ii) notwithstanding the foregoing provisions, television equipment\nthat automatically displays the results of such drawings may be\ninstalled and used without regard to the square footage if such premises\nare used as:\n  (I) a commercial bowling establishment, or\n  (II) a facility authorized under the racing, pari-mutuel wagering and\nbreeding law to accept pari-mutuel wagers;\n  (B) the rules for the operation of such game shall be as prescribed by\nregulations promulgated and adopted by the division, provided however,\nthat such rules shall provide that no person under the age of twenty-one\nmay participate in such games on the premises of a licensee who holds a\nlicense issued pursuant to the alcoholic beverage control law to sell\nalcoholic beverages for consumption on the premises; and, provided,\nfurther, that such regulations may be revised on an emergency basis not\nlater than ninety days after the enactment of this paragraph in order to\nconform such regulations to the requirements of this paragraph; or\n  (2) sixty-four and one-fourth percent of the total amount for which\ntickets have been sold for the "Instant Cash" game in which the\nparticipant purchases a preprinted ticket on which dollar amounts or\nsymbols are concealed on the face or the back of such ticket, provided\nhowever up to five new games may be offered during the fiscal year,\nseventy-four and one-fourth percent of the total amount for which\ntickets have been sold for such five games in which the participant\npurchases a preprinted ticket on which dollar amounts or symbols are\nconcealed on the face or the back of such ticket; or\n  (3) fifty-five percent of the total amount for which tickets have been\nsold for any joint, multi-jurisdiction, and out-of-state lottery except\nas otherwise provided in paragraph one of subdivision b of this section\nfor any joint, multi-jurisdiction, out-of-state video lottery gaming; or\n  (4) fifty percent of the total amount for which tickets have been sold\nfor games known as: (A) the "Daily Numbers Game" or "Win 4", discrete\ngames in which the participants select no more than three or four of\ntheir own numbers to match with three or four numbers drawn by the\ncommission for purposes of determining winners of such games, (B) "Pick\n10", offered no more than twice daily, in which participants select from\na specified field of numbers a subset of ten numbers to match against a\nsubset of numbers to be drawn by the commission from such field of\nnumbers for the purpose of determining winners of such game, (C) "Take\n5", offered no more than twice daily, in which participants select from\na specified field of numbers a subset of five numbers to match against a\nsubset of five numbers to be drawn by the commission from such field of\nnumbers for purposes of determining winners of such game; or\n  (5) forty percent of the total amount for which tickets have been sold\nfor: (A) "Lotto", offered no more than twice daily, a discrete game in\nwhich all participants select a specific subset of numbers to match a\nspecific subset of numbers, as prescribed by rules and regulations\npromulgated and adopted by the commission, from a larger specific field\nof numbers, as also prescribed by such rules and regulations and (B)\nwith the exception of the game described in paragraph one of this\nsubdivision, such other state-operated lottery games that the commission\nmay introduce, offered no more than twice daily, commencing on or after\nforty-five days following the official publication of the rules and\nregulations for such game.\n  (6) the commission shall make a report on the revenues derived from\nthe additional lottery drawings pursuant to paragraphs four and five of\nthis subdivision and shall submit such report to the governor, the\nspeaker of the assembly, and the temporary president of the senate by\nthe first day of March two thousand twenty-two.\n  The moneys in the lottery prize account shall be paid out of such\naccount on the audit and warrant of the comptroller on vouchers\ncertified or approved by the director or his or her duly designated\nofficial.\n  Prize money derived from ticket sales receipts of a particular game\nand deposited in the lottery prize account in accordance with the\npercentages set forth above may be used to pay prizes in such game.\nBalances in the lottery prize account identified by individual games may\nbe carried over from one fiscal year to the next to ensure proper payout\nof games.\n  b. 1. Notwithstanding section one hundred twenty-one of the state\nfinance law, on or before the twentieth day of each month, the\ncommission shall pay into the state treasury, to the credit of the state\nlottery fund created by section ninety-two-c of the state finance law,\nnot less than forty-five percent of the total amount for which tickets\nhave been sold for games defined in paragraph five of subdivision a of\nthis section during the preceding month, not less than forty-five\npercent of the total amount for which tickets have be sold for games\ndefined in paragraph four of subdivision a of this section during the\npreceding month, not less than thirty-five percent of the total amount\nfor which tickets have been sold for games defined in paragraph three of\nsubdivision a of this section during the preceding month, not less than\ntwenty and three-fourths percent of the total amount for which tickets\nhave been sold for games defined in paragraph two of subdivision a of\nthis section during the preceding month, provided however that for games\nwith a prize payout of seventy-four and one-fourth percent of the total\namount for which tickets have been sold, the commission shall pay not\nless than ten and three-fourths percent of sales into the state treasury\nand not less than twenty-five percent of the total amount for which\ntickets have been sold for games defined in paragraph one of subdivision\na of this section during the preceding month; and the balance of the\ntotal revenue after payout for prizes for games known as "video lottery\ngaming," including any joint, multi-jurisdiction, and out-of-state video\nlottery gaming, (i) less ten percent of the total revenue wagered after\npayout for prizes to be retained by the division for operation,\nadministration, and procurement purposes;\n  (ii) less a vendor's fee the amount of which is to be paid for serving\nas a lottery agent to the track operator of a vendor track or the\noperator of any other video lottery gaming facility authorized pursuant\nto section sixteen hundred seventeen-a of this article. The amount of\nthe vendor's fee shall be calculated as follows:\n  (A) when a vendor track is located within development zone one as\ndefined by section thirteen hundred ten of the racing, pari-mutuel\nwagering and breeding law, at a rate of thirty-nine and one-half percent\nof the total revenue wagered at the vendor track after payout for prizes\npursuant to this chapter;\n  (B) when a vendor track is located within zone two as defined by\nsection thirteen hundred ten of the racing, pari-mutuel wagering and\nbreeding law, the rate of the total revenue wagered at the vendor track\nafter payout for prizes pursuant to this chapter shall be as follows:\n  (1) forty-three and one-half percent for a vendor track located more\nthan fifteen miles but less than fifty miles from a destination resort\ngaming facility authorized pursuant to article thirteen of the racing,\npari-mutuel wagering and breeding law;\n  (2) forty-nine percent for a vendor track located within fifteen miles\nof a destination resort gaming facility authorized pursuant to article\nthirteen of the racing, pari-mutuel wagering and breeding law;\n  (3) fifty-one percent for vendor track located more than fifteen miles\nbut less than fifty miles from a Native American class III gaming\nfacility as defined in 25 U.S.C. §2703(8);\n  (4) fifty-six percent for a vendor track located within fifteen miles\nof a Native American class III gaming facility as defined in 25 U.S.C\n§2703(8);\n  (5) forty-nine percent for a video lottery gaming facility authorized\npursuant to paragraph five of subdivision a of section sixteen hundred\nseventeen-a of this article;\n  (B-1) Notwithstanding subparagraph (B) of this paragraph, for the\nperiod commencing on April first, two thousand nineteen and ending on\nMarch thirty-first, two thousand twenty, for a vendor track that is\nlocated within Ontario County, such vendor fee shall be thirty-seven and\none-half percent of the total revenue wagered at the vendor track after\npayout for prizes pursuant to this chapter;\n  (B-2) Notwithstanding subparagraph (B) of this paragraph, for the\nperiod commencing on April first, two thousand nineteen and ending on\nMarch thirty-first two thousand twenty, for a vendor track that is\nlocated within Saratoga County, such vendor fee shall be thirty-nine and\none-half percent of the total revenue wagered at the vendor track after\npayout for prizes pursuant to this chapter;\n  (C) when a video lottery facility is located at Aqueduct racetrack, at\na rate of fifty percent of the total revenue wagered at the video\nlottery gaming facility after payout for prizes pursuant to this\nchapter;\n  (D) when a video lottery gaming facility is located in either Nassau\nor Suffolk counties and is operated by a corporation established\npursuant to section five hundred two of the racing, pari-mutuel wagering\nand breeding law, at a rate of forty-five percent of the total revenue\nwagered at the video lottery gaming facility after payout for prizes\npursuant to this chapter.\n  * (E) notwithstanding clause (B) of this subparagraph, beginning on\nJune first, two thousand twenty-five, when the vendor track is located\nin the county of Genesee and within forty miles of a Native American\nclass III gaming facility as defined in 25 U.S.C. §2703(8), at a rate of\nfifty-six percent of the total revenue wagered at the vendor track after\npayout for prizes pursuant to this chapter; provided, however, that the\nfollowing additional provisions shall apply to such vendor track:\n  (1) From the vendor fee amount equivalent to fifty-six percent of the\ntotal revenue wagered at the vendor track after payout for prizes\npursuant to this clause, a portion equivalent to five percent of the\ntotal revenue wagered at the vendor track after payout for prizes shall\nbe defined as and hereinafter be referred to as the "additional vendor\nfee".\n  (2) Such additional vendor fee shall be accounted for separately by\nthe vendor track and shall be used exclusively for the following\npurposes, in proportions determined annually by such vendor track in\naccordance with a plan submitted to the gaming commission pursuant to\nsubclause four of this clause:\n  (A) reducing the costs paid by non-executive and non-managerial\nemployees of such vendor track for healthcare coverage offered by such\nvendor track;\n  (B) increasing salaries, hourly wages, or benefits paid to\nnon-executive and non-managerial employees of such vendor track, or\nfunding increases in the number of full-time equivalent non-executive\nand non-managerial employees; and\n  (C) supplementing distributions payable to participating counties or\nmunicipalities as required under existing law.\n  (3) Additional vendor fee revenue utilized pursuant to this clause\nshall not be included in any calculation used to determine amounts\npayable pursuant to subclause two of this clause or payments required\nunder subclause two of this clause to the appropriate breeding fund\nestablished pursuant to article three of the racing, pari-mutuel\nwagering and breeding law.\n  (4) (A) Such vendor track shall annually submit a plan to the\ncommission, no later than sixty days prior to the beginning of its\nfiscal year, detailing the allocation and use of the additional vendor\nfee revenue among the purposes specified in subclause two of this clause\nfor the upcoming fiscal year. Such plan shall include specific\nprojections for cost reductions in employee healthcare, increases in\nemployee compensation specifying the job titles or categories benefiting\ntherefrom, and supplemental amounts for local distributions.\n  (B) Such vendor track shall submit a plan to the commission, no later\nthan sixty days after the effective date of this clause, detailing the\nallocation and use of such additional vendor fee among the purposes\nspecified in subclause two of this clause for the remainder of fiscal\nyear two thousand twenty-five. Such plan shall include specific\nprojections for cost reductions in employee healthcare, increases in\nemployee compensation specifying the job titles or categories benefiting\ntherefrom, and projections of supplemental amounts of local\ndistributions. Such plan shall also detail allocations already made\nbetween this act going into effect and the date such plan has been\nsubmitted to the commission.\n  (5) Such vendor track shall also submit an annual report to the gaming\ncommission, the governor, the temporary president of the senate, and the\nspeaker of the assembly, no later than ninety days after the end of each\nfiscal year, detailing the actual allocation and use of such additional\nvendor fee during the preceding fiscal year. Such report shall specify\nthe amounts applied to each purpose outlined in subclause two of this\nclause, provide data demonstrating the impact on employee healthcare\ncosts and compensation including the specific job titles or categories\nthat received increased compensation pursuant to item (B) of subclause\ntwo of this clause, detail the supplemental distributions made to\nlocalities, compare actual use to the plan, and provide justification\nfor any significant variances.\n  (6) (A) The additional vendor fee shall only be used to supplement\namounts previously allocated or appropriated by the corporation for the\npurposes stated in subclause two of this clause and may not be used to\nreplace or backfill such amounts.\n  (B) The gaming commission shall have the authority to audit the use of\nsuch additional vendor fee by such vendor track. If the gaming\ncommission determines, after notice and an opportunity for a hearing,\nthat such funds have been used for purposes other than those authorized\nin subclause two of this clause or inconsistent with the plan, including\na failure to benefit non-executive and non-managerial employees as\nrequired by item (B) of subclause two of this clause, the gaming\ncommission may impose monetary penalties pursuant to its authority under\nthe racing, pari-mutuel wagering and breeding law and may require that\nan amount equivalent to any funds used in a manner inconsistent with the\nprovisions of this clause shall be expended for authorized purposes\npursuant to an amended plan.\n  (7) Nothing contained in this clause shall affect any existing\ncollective bargaining agreement or the obligation of such vendor track\nto negotiate terms and conditions of employment with any certified\nemployee representative.\n  * NB Repealed April 1, 2030\n  * (iii) less any additional vendor's fees. Additional vendor's fees\nshall be calculated as follows:\n  (A) when a vendor track is located within region one and is located\nwithin Orange county or region two of development zone two, as such zone\nis defined in section thirteen hundred ten of the racing, pari-mutuel\nwagering and breeding law, or is located within region six of such\ndevelopment zone two and is located within Ontario county, the\nadditional vendor fee received by the vendor track shall be calculated\npursuant to subclause one of this clause; provided, however, such\nadditional vendor fee shall not exceed ten percent.\n  (1) The additional vendor fee is a percentage of the total revenue\nwagered at the vendor track after payout for prizes pursuant to this\nchapter. That percentage is calculated by subtracting the effective tax\nrate on all taxable gross gaming revenue paid by a gaming facility\nwithin the same region as the vendor track from the percentage that is\nninety percent less the vendor track's vendor fee percentage and less\nthe additional vendor fee percentage authorized pursuant to clause (D)\nof this subparagraph. For purposes of this clause, Seneca and Wayne\ncounties shall be deemed to be located within region six of development\nzone two.\n  (2) The additional vendor fee paid pursuant to this clause shall\ncommence with the state fiscal year beginning on April first, two\nthousand nineteen and shall be paid to a vendor track no later than\nninety days after the close of the fiscal year. The additional vendor\nfee authorized by this clause shall only be applied to revenue wagered\nat a vendor track while a gaming facility in the same region as that\nvendor track is open and operating pursuant to an operation certificate\nissued pursuant to section thirteen hundred thirty-one of the racing,\npari-mutuel wagering and breeding law.\n  ** (B) for a vendor track that is located within Oneida county, within\nfifteen miles of a Native American class III gaming facility, such\nadditional vendor fee shall be six and four-tenths percent of the total\nrevenue wagered at the vendor after payout for prizes pursuant to this\nchapter. The vendor track shall forfeit this additional vendor fee for\nany time period that the vendor track does not maintain at least seventy\npercent of full-time equivalent employees as they employed in the year\ntwo thousand sixteen.\n  ** NB Repealed March 31, 2027\n  (C) (1) for a vendor track that is located within development zone one\nas defined by section thirteen hundred ten of the racing, pari-mutuel\nwagering and breeding law, such additional vendor fee shall be six and\nfive-tenths percent of the total revenue wagered at the vendor track\nafter payout for prizes pursuant to this chapter. At the conclusion of\neach fiscal year, if the effective tax rate on all taxable gross gaming\nrevenue paid by a gaming facility that is licensed under title two-A of\narticle thirteen of the racing, pari-mutuel wagering and breeding law,\nand located within New York city is below forty-four percent, the vendor\ntrack shall receive an additional calculated amount no later than ninety\ndays after the close of the fiscal year. For the purposes of this\nclause, an additional calculated amount shall be the differential\nbetween forty-four percent and the effective tax rate on all taxable\ngross gaming revenue paid by the applicable gaming facility applied to\nrevenue wagered at such vendor track after payout for prizes pursuant to\nthis chapter. The vendor track must maintain at least ninety percent of\nfull-time equivalent gaming employees as they employed in the year two\nthousand twenty-five to receive the additional vendor fee and additional\ncalculated amount. The additional vendor fee and additional calculated\namount authorized by this clause shall only be applied to revenue\nwagered at a vendor track while the applicable gaming facility\nreferenced pursuant to this clause is open and operating pursuant to an\noperation certificate issued pursuant to section thirteen hundred\nthirty-one of the racing, pari-mutuel wagering and breeding law.\n  (2) To be eligible to receive the additional vendor fee authorized\npursuant to this clause, a vendor track must submit an application to\nthe gaming commission. Such application shall identify the number of\nfull-time equivalent gaming employees employed at the facility in\ncalendar year two thousand twenty-five.\n  (3) The additional vendor fee authorized by this clause shall be\napplicable commencing on the date that an eligible facility submits\ntheir application under subclause two of this clause to the gaming\ncommission.\n  (D) (1) five percent for the following:\n  (I) any video lottery gaming facility located in either Nassau or\nSuffolk county that is operated by a corporation established pursuant to\nsection five hundred two of the racing, pari-mutuel wagering and\nbreeding law;\n  (II) a vendor track located within region one and located within\nOrange county;\n  (III) any vendor track located within fifteen miles of a Native\nAmerican class III gaming facility as defined in 25 U.S.C §2703(8); and\n  (IV) a vendor track located more than fifteen miles but less than\nfifty miles from a destination resort gaming facility authorized\npursuant to article thirteen of the racing, pari-mutuel wagering and\nbreeding law.\n  (2) To be eligible to receive the additional vendor fee authorized\npursuant to this clause, a vendor track or video lottery gaming facility\nmust submit an application to the gaming commission. Such application\nshall identify the number of full-time equivalent gaming employees\nemployed at the facility in calendar year two thousand twenty-five.\n  (3) On July first of each year beginning on July first, two thousand\ntwenty-seven, each track or facility shall certify to the gaming\ncommission the number of full-time equivalent gaming employees employed\nby the facility for the preceding calendar year. If the number of\nfull-time equivalent gaming employees certified to the gaming commission\nis less than the number of full-time equivalent gaming employees\nemployed by the facility in the year two thousand twenty-five, the\ngaming commission may reduce the additional vendor fee received by such\ntrack or facility pursuant to this clause by the following amount:\n  (I) if the number of certified full-time equivalent gaming employees\nis less than one hundred percent but more than or equal to ninety-five\npercent of the original amount, one percent;\n  (II) if the number of certified full-time equivalent gaming employees\nis less than ninety-five percent but more than or equal to ninety\npercent of the original amount, two percent;\n  (III) if the number of certified full-time equivalent gaming employees\nis less than ninety percent but more than or equal to eighty-five\npercent of the original amount, three percent;\n  (IV) if the number of certified full-time equivalent gaming employees\nis less than eighty-five percent but more than or equal to eighty\npercent of the original amount, four percent; and\n  (V) if the number of certified full-time equivalent gaming employees\nis less than eighty percent of the original amount, the full five\npercent.\n  (4) The additional vendor fee authorized by this clause shall be\napplicable commencing on the date that an eligible facility submits its\napplication under subclause two of this clause to the gaming commission.\n  * NB Effective until May 28, 2029\n  * (iii) less any additional vendor's fees. Additional vendor's fees\nshall be calculated as follows:\n  (A) when a vendor track is located within region one and is located\nwithin Orange county or region two of development zone two, as such zone\nis defined in section thirteen hundred ten of the racing, pari-mutuel\nwagering and breeding law, or is located within region six of such\ndevelopment zone two and is located within Ontario county, the\nadditional vendor fee received by the vendor track shall be calculated\npursuant to subclause one of this clause; provided, however, such\nadditional vendor fee shall not exceed ten percent.\n  (1) The additional vendor fee is a percentage of the total revenue\nwagered at the vendor track after payout for prizes pursuant to this\nchapter. That percentage is calculated by subtracting the effective tax\nrate on all taxable gross gaming revenue paid by a gaming facility\nwithin the same region as the vendor track from the percentage that is\nninety percent less than the percentage of the vendor track's vendor\nfee. For purposes of this clause, Seneca and Wayne counties shall be\ndeemed to be located within region six of development zone two.\n  (2) The additional vendor fee paid pursuant to this clause shall\ncommence with the state fiscal year beginning on April first, two\nthousand nineteen and shall be paid to a vendor track no later than\nninety days after the close of the fiscal year. The additional vendor\nfee authorized by this clause shall only be applied to revenue wagered\nat a vendor track while a gaming facility in the same region as that\nvendor track is open and operating pursuant to an operation certificate\nissued pursuant to section thirteen hundred thirty-one of the racing,\npari-mutuel wagering and breeding law.\n  ** (B) for a vendor track that is located within Oneida county, within\nfifteen miles of a Native American class III gaming facility, such\nadditional vendor fee shall be six and four-tenths percent of the total\nrevenue wagered at the vendor after payout for prizes pursuant to this\nchapter. The vendor track shall forfeit this additional vendor fee for\nany time period that the vendor track does not maintain at least seventy\npercent of full-time equivalent employees as they employed in the year\ntwo thousand sixteen.\n  ** NB Repealed March 31, 2027\n  * NB Effective May 28, 2029\n  1-a. (i) Notwithstanding any provision of law to the contrary, any\noperators of a vendor track or the operators of any other video lottery\ngaming facility eligible to receive a capital award as of December\nthirty-first, two thousand eighteen shall deposit from their vendor fee\ninto a segregated account an amount equal to four percent of the first\nsixty-two million five hundred thousand dollars of revenue wagered at\nthe vendor track after payout for prizes pursuant to this chapter to be\nused exclusively for capital investments, except for Aqueduct, which\nshall deposit an amount equal to four percent of all revenue wagered at\nthe video lottery gaming facility after payout for prizes pursuant to\nthis chapter into a segregated account for capital investments.\n  (ii) Vendor tracks and video lottery gaming facilities shall be\npermitted to withdraw funds for projects approved by the commission to\nimprove the facilities of the vendor track or video lottery gaming\nfacility which enhance or maintain the video lottery gaming facility\nincluding, but not limited to hotels, other lodging facilities,\nentertainment facilities, retail facilities, dining facilities, events\narenas, parking garages and other improvements and amenities customary\nto a gaming facility, provided, however, the vendor tracks and video\nlottery gaming facilities shall be permitted to withdraw funds for\nunreimbursed capital awards approved prior to the effective date of this\nsubparagraph.\n  (iii) Any proceeds from the divestiture of any assets acquired through\nthese capital funds or any prior capital award must be deposited into\nthis segregated account, provided that if the vendor track or video\nlottery gaming facility ceases use of such asset for gaming purposes or\ntransfers the asset to a related party, such vendor track or video\nlottery gaming facility shall deposit an amount equal to the fair market\nvalue of that asset into the account.\n  (iv) In the event a vendor track or video lottery gaming facility\nceases gaming operations, any balance in the account along with an\namount equal to the value of all remaining assets acquired through this\nfund or prior capital awards shall be returned to the state for deposit\ninto the state lottery fund for education aid, except for Aqueduct,\nwhich shall return to the state for deposit into the state lottery fund\nfor education aid all amounts in excess of the amount needed to fund a\nproject pursuant to an agreement with the operator to construct an\nexpansion of the facility, hotel, and convention and exhibition space\nrequiring a minimum capital investment of three hundred million dollars\nand any subsequent amendments to such agreement.\n  (v) The comptroller or his legally authorized representative is\nauthorized to audit any and all expenditures made out of these\nsegregated capital accounts.\n  (vi) Notwithstanding subparagraphs (i) through (v) of this paragraph,\na vendor track located in Ontario county may withdraw up to two million\ndollars from this account for the purpose of constructing a turf course\nat the vendor track and may withdraw up to six million dollars in\ncalendar year two thousand nineteen for the purpose of covering ongoing\noperating expenses.\n  (vii) Notwithstanding subparagraphs (i) through (vi) of this\nparagraph, a vendor track located within Saratoga county may withdraw up\nto three million dollars in calendar year two thousand nineteen for the\npurpose of covering ongoing operating expenses.\n  (viii) Any balance remaining in the capital award account of a vendor\ntrack or operator or any other video lottery gaming facility as of March\nthirty-first, two thousand nineteen shall be transferred for deposit\ninto a segregated account established by this subparagraph.\n  1-b. Notwithstanding any provision of law to the contrary, free play\nallowance credits authorized by the division pursuant to subdivision i\nof section sixteen hundred seventeen-a of this article shall not be\nincluded in the calculation of the total amount wagered on video lottery\ngames, the total amount wagered after payout of prizes, the vendor fees\npayable to the operators of video lottery gaming facilities, fees\npayable to the division's video lottery gaming equipment contractors, or\nracing support payments.\n  1-c. Notwithstanding any provision of law to the contrary, the\noperator of a vendor track or the operator of any other video lottery\ngaming facility shall fund a marketing and promotion program out of the\nvendor's fee. Each operator shall submit an annual marketing plan for\nthe review and approval of the commission and any other required\ndocuments detailing promotional activities as prescribed by the\ncommission. The commission shall have the right to reject any\nadvertisement or promotion that does not properly represent the mission\nor interests of the lottery or its programs.\n  2. As consideration for the operation of a video lottery gaming\nfacility, the division, shall cause the investment in the racing\nindustry of a portion of the vendor fee received pursuant to paragraph\none of this subdivision in the manner set forth in this subdivision.\nWith the exception of Aqueduct racetrack, a video lottery gaming\nfacility authorized pursuant to paragraph five of subdivision a of\nsection sixteen hundred seventeen-a of this article or a facility in the\ncounty of Nassau or Suffolk operated by a corporation established\npursuant to section five hundred two of the racing, pari-mutuel wagering\nand breeding law, each such track shall dedicate a portion of its vendor\nfees, received pursuant to clause (A), (B), (B-1), (B-2), (C), or (D) of\nsubparagraph (ii) of paragraph one of this subdivision, for the purpose\nof enhancing purses at such track, in an amount equal to eight and\nthree-quarters percent of the total revenue wagered at the vendor track\nafter pay out for prizes. One percent of the gross purse enhancement\namount, as required by this subdivision, shall be paid to the gaming\ncommission to be used exclusively to promote and ensure equine health\nand safety in New York. Any portion of such funding to the gaming\ncommission unused during a fiscal year shall be returned to the video\nlottery gaming operators on a pro rata basis in accordance with the\namounts originally contributed by each operator and shall be used for\nthe purpose of enhancing purses at such track. One and one-half percent\nof the gross purse enhancement amount at a thoroughbred track, as\nrequired by this subdivision, shall be paid to an account established\npursuant to section two hundred twenty-one-a of the racing, pari-mutuel\nwagering and breeding law to be used exclusively to provide health\ninsurance for jockeys. In addition, with the exception of Aqueduct\nracetrack, a video lottery gaming facility authorized pursuant to\nparagraph five of subdivision a of section sixteen hundred seventeen-a\nof this article or a facility in the county of Nassau or Suffolk\noperated by a corporation established pursuant to section five hundred\ntwo of the racing, pari-mutuel wagering and breeding law, one and\none-quarter percent of total revenue wagered at the vendor track after\npay out for prizes, received pursuant to clause (A), (B), (B-1), (B-2),\n(C), or (D) of subparagraph (ii) of paragraph one of this subdivision,\nshall be distributed to the appropriate breeding fund for the manner of\nracing conducted by such track.\n  Provided, further, that nothing in this paragraph shall prevent each\ntrack from entering into an agreement, not to exceed five years, with\nthe organization authorized to represent its horsemen to increase or\ndecrease the portion of its vendor fee dedicated to enhancing purses at\nsuch track during the years of participation by such track, or to race\nfewer dates than required herein.\n  3. Nothing in paragraph two of this subdivision shall affect any\nagreement in effect on or before the effective date of this paragraph,\nexcept that the obligation to pay funds to the gaming commission to\npromote and ensure equine health and safety and the obligation to pay\nfunds to an account established pursuant to section two hundred\ntwenty-one-a of the racing, pari-mutuel wagering and breeding law to be\nused exclusively to provide health insurance for jockeys shall supersede\nany provision to the contrary in any such agreement.\n  c. 1. The specifications for video lottery gaming, including any\njoint, multi-jurisdiction, and out-of-state video lottery gaming, shall\nbe designed in such a manner as to pay prizes that average no less than\nninety percent of sales.\n  2. Of the ten percent retained by the division for administrative\npurposes, any amounts beyond that which are necessary for the operation\nand administration of this pilot program shall be deposited in the\nlottery education account.\n  d. Notwithstanding any law, rule or regulation to the contrary, any\nsuccessor to the New York Racing Association, Inc. with respect to the\noperation and maintenance of video lottery gaming at Aqueduct racetrack\nshall be deemed the successor to the New York Racing Association, Inc.\nfor purposes of being subject to existing contracts and loan agreements,\nif any, entered into by the New York Racing Association, Inc. directly\nrelated to the construction, operation, management and distribution of\nrevenues of the video lottery gaming facility at Aqueduct racetrack.\n  e. The video lottery gaming operator selected to operate a video\nlottery terminal facility at Aqueduct will be subject to a memorandum of\nunderstanding between the governor, temporary president of the senate\nand the speaker of the assembly. Notwithstanding subparagraph (i) of\nparagraph a of subdivision eight of section two hundred twelve of the\nracing, pari-mutuel wagering and breeding law, the state, pursuant to an\nagreement with the video lottery gaming operator to operate a video\nlottery terminal facility at Aqueduct, may authorize, as part of such\nagreement or in conjunction with such agreement at the time it is\nexecuted, additional development at the Aqueduct racing facility. The\nselection will be made in consultation with the franchised corporation,\nbut is not subject to such corporation's approval. The franchised\ncorporation shall not be eligible to compete to operate or to operate a\nvideo lottery terminal facility at Aqueduct. The state will use its best\nefforts to ensure that the video lottery terminal facility at Aqueduct\nis opened as soon as is practicable and will, if practicable, pursue the\nconstruction of a temporary video lottery terminal facility at Aqueduct\nsubject to staying within an agreed budget for such video lottery\nterminal facility and subject to such temporary facility not having an\nadverse impact on opening of the permanent facility at Aqueduct. To\nfacilitate the opening of the video lottery gaming facility at Aqueduct\nas soon as is practicable, the division of the lottery may extend the\nterm of any existing contract related to the video lottery system.\n  f. As consideration for the operation of the video lottery gaming\nfacility at Aqueduct racetrack, the division shall cause the investment\nin the racing industry of the following percentages of the vendor fee to\nbe deposited or paid, as follows:\n  1. Six and one-half percent of the total wagered after payout of\nprizes for the first year of operation of video lottery gaming at\nAqueduct racetrack, seven percent of the total wagered after payout of\nprizes for the second year of operation, and seven and one-half percent\nof the total wagered after payout of prizes for the third year of\noperation and thereafter, for the purpose of enhancing purses at\nAqueduct racetrack, Belmont Park racetrack and Saratoga race course. One\npercent of the gross purse enhancement amount, as required by this\nsubdivision, shall be paid to the gaming commission to be used\nexclusively to promote and ensure equine health and safety in New York.\nAny portion of such funding to the gaming commission unused during a\nfiscal year shall be returned on a pro rata basis in accordance with the\namounts originally contributed and shall be used for the purpose of\nenhancing purses at such tracks. One and one-half percent of the gross\npurse enhancement amount, as required by this subdivision, shall be paid\nto an account established pursuant to section two hundred twenty-one-a\nof the racing, pari-mutuel wagering and breeding law to be used\nexclusively to provide health insurance for jockeys.\n  2. One percent of the total wagered after payout of prizes for the\nfirst year of operation of video lottery gaming at Aqueduct racetrack,\none and one-quarter percent of the total wagered after payout of prizes\nfor the second year of operation, and one and one-half percent of the\ntotal wagered after payout of prizes for the third year of operation and\nthereafter, for an appropriate breeding fund for the manner of racing\nconducted at Aqueduct racetrack, Belmont Park racetrack and Saratoga\nrace course.\n  3. (i) Four percent of the total revenue wagered after payout of\nprizes to be deposited into an account of the franchised corporation\nestablished pursuant to section two hundred six of the racing,\npari-mutuel wagering and breeding law to be used for capital\nexpenditures in maintaining and upgrading Aqueduct racetrack, Belmont\nPark racetrack and Saratoga race course. Capital expenditures may\ninclude funding the construction of and initially equipping a\nstate-based equine drug testing and research laboratory to be used\npursuant to subdivision seven of section nine hundred two of the racing,\npari-mutuel wagering and breeding law.\n  (ii) Notwithstanding subparagraph (i) of this paragraph, in the event\nthe state provides funds to the franchised corporation for the\nrenovation of Belmont Park racetrack, out of the amount payable to the\nfranchised corporation for capital expenditures pursuant to subparagraph\n(i) of this paragraph during any state fiscal year, an amount pursuant\nto the repayment agreement between the state and the franchised\ncorporation shall instead be deposited into the miscellaneous capital\nprojects fund, New York racing capital improvement fund as required to\nrepay the state for funds provided for the renovation of Belmont Park\nracetrack. Any amount payable to the franchised corporation in any state\nfiscal year for capital expenditures pursuant to subparagraph (i) of\nthis paragraph in excess of the amount pursuant to the repayment\nagreement between the state and the franchised corporation shall be\ndeposited pursuant to subparagraph (i) of this paragraph. Once the state\nhas been fully reimbursed for the costs related to the renovation of\nBelmont Park racetrack, this subparagraph shall no longer apply and\nsubparagraph (i) of this paragraph shall apply.\n  4. Three percent of the total revenue wagered after payout for prizes\nto be deposited into an account of the franchised corporation\nestablished pursuant to section two hundred six of the racing,\npari-mutuel wagering and breeding law to be used for general\nthoroughbred racing operations at Aqueduct racetrack, Belmont Park\nracetrack and Saratoga race course.\n  5. Paragraphs one, two, three and four of this subdivision shall be\nknown collectively as the "racing support payments".\n  f-1. As consideration for operation of video lottery gaming facility\nlocated in the county of Nassau or Suffolk and operated by a corporation\nestablished pursuant to section five hundred two of the racing,\npari-mutuel wagering and breeding law, the division shall cause the\ninvestment in the racing industry of the following percentages of the\nvendor fee to be deposited or paid as follows:\n  1. Two and three tenths percent of the total wagered after payout of\nprizes for the purpose of enhancing purses at Aqueduct racetrack,\nBelmont Park racetrack and Saratoga race course, provided, however, that\nany amount that is in excess of the amount necessary to maintain purse\nsupport from video lottery gaming at Aqueduct racetrack, Belmont Park\nracetrack and Saratoga race course at the same level realized in two\nthousand thirteen, to be adjusted by the consumer price index for all\nurban consumers, as published annually by the United States department\nof labor, bureau of labor statistics, shall instead be returned to the\ncommission.\n  2. five tenths percent of the total wagered after payout of prizes for\nthe appropriate breeding fund for the manner of racing at Aqueduct\nracetrack, Belmont Park racetrack and Saratoga race course, provided,\nhowever, that any amount that is in excess of the amount necessary to\nmaintain payments from video lottery gaming at Aqueduct racetrack at the\nsame level realized in two thousand thirteen, to be adjusted by the\nconsumer price index for all urban consumers, as published annually by\nthe United States department of labor, bureau of labor statistics, shall\ninstead be returned to the commission.\n  3. (i) one and three tenths percent of the total revenue wagered after\npayout of prizes to be deposited into an account of the franchised\ncorporation established pursuant to section two hundred six of the\nracing, pari-mutuel wagering and breeding law to be used for capital\nexpenditures in maintaining and upgrading Aqueduct racetrack, Belmont\nPark racetrack and Saratoga race course, provided, however, that any\namount that is in excess of the amount necessary to maintain payments\nfor capital expenditures from video lottery gaming at Aqueduct racetrack\nat the same level realized in two thousand thirteen, to be adjusted by\nthe consumer price index for all urban consumers, as published annually\nby the United States department of labor, bureau of labor statistics,\nshall instead be returned to the commission.\n  (ii) Notwithstanding subparagraph (i) of this paragraph, in the event\nthe state provides funds to the franchised corporation for the\nrenovation of Belmont Park racetrack, and in the event the amount\ndeposited pursuant to subparagraph (ii) of paragraph three of\nsubdivision f of this section is insufficient to make the required\nrepayment pursuant to such subparagraph during any state fiscal year, an\namount payable to the franchised corporation for capital expenditures\npursuant to subparagraph (i) of this paragraph shall instead be\ndeposited into the miscellaneous capital projects fund, New York racing\ncapital improvement fund to the extent necessary, when combined with the\namount set forth in subparagraph (ii) of paragraph three of subdivision\nf of this section, to make any required repayment of funds provided by\nthe state related to the renovation of Belmont Park racetrack during\nsuch fiscal year. Any amount payable to the franchised corporation in\nany state fiscal year for capital expenditures pursuant to subparagraph\n(i) of this paragraph in excess of the amount pursuant to the repayment\nagreement between the state and the franchised corporation shall be\ndeposited pursuant to subparagraph (i) of this paragraph. Once the state\nhas been fully reimbursed for such costs related to the renovation of\nBelmont Park racetrack, this subparagraph shall no longer apply and\nsubparagraph (i) of this paragraph shall apply.\n  4. Nine tenths percent of the total revenue wagered after payout for\nprizes to be deposited into an account of the franchised corporation\nestablished pursuant to section two hundred six of the racing,\npari-mutuel wagering and breeding law to be used for general\nthoroughbred racing operations at Aqueduct racetrack, Belmont Park\nracetrack and Saratoga race course, provided, however, that any amount\nthat is in excess of the amount necessary to maintain payments for\ngeneral thoroughbred racing operations from video lottery gaming at\nAqueduct racetrack at the same level realized in two thousand thirteen,\nto be adjusted by the consumer price index for all urban consumers, as\npublished annually by the United States department of labor, bureau of\nlabor statistics, shall instead be returned to the commission.\n  g. In the event the state elects to construct a video lottery terminal\nfacility at the Aqueduct racetrack, all video lottery terminal revenues\npayable to the video lottery gaming operator at the Aqueduct racetrack\nremaining after payment of the racing support payments shall first be\nused to repay the state's advances for (i) confirmation of the chapter\neleven plan of reorganization and cash advances for the franchised\ncorporation's operations following confirmation of the chapter eleven\nplan of reorganization and (ii) the amount expended by the state to\nconstruct such video lottery terminal facility at Aqueduct racetrack\npursuant to an agreement with the state. Subparagraphs (i) and (ii) of\nthis paragraph shall be defined as the state advance amount and the\namounts payable to the division of the lottery.\n  h. As consideration for the operation of a video lottery gaming\nfacility located in Orange county, the division shall cause the\ninvestment in the racing industry at the following amount from the\nvendor fee to be paid as follows:\n  As amount to the horsemen for purses at a licensed racetrack in\nSullivan county in an amount equal to eight and three-quarters percent\nof the total revenue wagered at the video lottery gaming facility, after\npay out for prizes. The facility located in Orange county, as defined in\nparagraph five of subdivision a of section sixteen hundred seventeen-a\nof this article shall pay to the horsemen at a licensed racetrack at\nYonkers racetrack an amount to maintain purses for such horsemen at the\nsame dollar levels realized in two thousand eighteen, to be adjusted by\nthe consumer price index for all urban consumers, as published annually\nby the United States department of labor bureau of labor statistics. In\naddition, one and one-quarter percent of total revenue wagered at the\nvideo lottery gaming facility after pay out for prizes, received\npursuant to clause (B) of subparagraph (ii) of paragraph one of\nsubdivision b of this section, shall be distributed to the appropriate\nbreeding fund for the manner of racing conducted by such track. In no\ncircumstance shall net proceeds of the lottery, including the proceeds\nfrom video lottery gaming, be used for the payment of non-lottery\nexpenses of the gaming commission, administrative or otherwise.\n