NY Rac, Pari-Mut Wag & Breeding L § 318 (2021)
2021 New York Laws PML - Racing, Pari-Mutuel Wagering and Breeding Law Article 3 - Harness Racing and Breeding 318 - Disposition of On-Track Pari-Mutuel Pools; Harness Races.

§  318.  Disposition  of on-track pari-mutuel pools; harness races. 1. Except as otherwise provided by law, every  association  or  corporation authorized  under  this  article  to  conduct  pari-mutuel  betting at a harness horse race meeting on races run  thereat  shall  distribute  all sums deposited in any pari-mutuel pool to the holders of winning tickets therein,  provided  such tickets be presented for payment prior to April first of the year following the year of their purchase, less  an  amount that  shall  be  established  and retained by such racing association or corporation of between fourteen and twenty percent of the total deposits in pools resulting from regular bets, less sixteen to twenty-two percent of the total deposits in pools resulting from multiple bets, less twenty to thirty percent of the total deposits in pools resulting  from  exotic bets,  and  less  twenty  to  thirty-six  percent  of  the total betting deposits in pools resulting from super exotic bets, plus the breaks. The retention rate to be established is subject to the prior approval of the commission. Such rate may not be changed more  than  once  per  calendar quarter to be effective on the first day of the calendar quarter.   "Exotic bets" and "multiple bets" shall have the meanings set forth in section five hundred nineteen of this chapter, "super exotic bets" shall have  the meaning set forth in subdivision four of section three hundred one of this article and "the breaks" are hereby defined as the odd cents over any multiple of ten for regular and multiple bets,  or  for  exotic bets,  over  any  multiple  of fifty, or for super exotic bets, over any multiple of one hundred calculated  on  the  basis  of  one  dollar  and otherwise  payable  to  a patron, provided however, that effective after October  fifteenth,  nineteen  hundred  ninety-four  breaks  are  hereby defined  as  the odd cents over any multiple of five for payoffs greater than one dollar five cents but less than five dollars, over any multiple of ten for payoffs greater than five dollars but less  than  twenty-five dollars,  over  any  multiple  of  twenty-five  for payoffs greater than twenty-five dollars but less than two hundred fifty dollars, or over any multiple of fifty for payoffs over two hundred fifty dollars.   a. Of the sum so retained from  on-track  pari-mutuel  betting  pools, such  association or corporation authorized to operate in Westchester or Nassau county: (i) shall pay to the commissioner of taxation and finance as a reasonable tax for the privilege of conducting pari-mutuel  betting at races run at race meetings held by such corporation or association, a tax,  which  is hereby levied, at the rate of one-half of one percent of all  wagers  from  total  daily  on-track  pools.  Such  association  or corporation  shall receive credit as a reduction of the daily tax by the state for the privilege of conducting  pari-mutuel  betting  of  amounts equal  to  four-tenths  percent  of total daily pools resulting from the simulcast of such  association's  or  corporation's  races  to  licensed facilities  operated  by  regional  off-track  betting  corporations  in accordance with section one thousand eight of  this  chapter;  provided, however,  that  in  no event shall total daily credit exceed four-tenths percent of the total daily pool of such association or  corporation.  An amount  equal  to fifty percent of such credit shall be used to increase purses; provided, however, that for any twelve-month period beginning on April first in nineteen hundred ninety and any year thereafter, each  of the  applicable  rates set forth above shall be increased by one-half of one percent on all on-track bets  of  any  such  racing  association  or corporation  that did not expend an amount equal to at least one-half of one percent of  its  on-track  bets  during  the  immediately  preceding calendar  year  for  enhancements  consisting of capital improvements as defined by section three hundred nineteen of this  article,  repairs  to its  physical  plant,  structures,  and  equipment used in its racing or wagering operations, as certified by the commission to the  commissioner  of  taxation  and  finance  no later than eighty days after the close of such calendar year, and five  special  events  at  each  track  in  each calendar  year,  not  otherwise  conducted  in  the  ordinary  course of business,  the  purpose  of  which  shall  be  to encourage, attract and promote track attendance and  encourage  new  and  continued  patronage, which  events  shall  be  subject  to the approval of the commission for purposes of this  subdivision.  In  the  determination  of  the  amounts expended  for  such  enhancements,  the  commission  shall  consider the average of the two immediately preceding twelve-month calendar  periods. Notwithstanding  the  foregoing no increase shall be imposed unless such corporation or association has been afforded notice and  opportunity  to be  heard.  The  commission  shall  promulgate  rules and regulations to implement the provisions relating to notice and hearing.  (ii) except as otherwise provided in this paragraph an amount equal to six and eight-tenths percent of the total pool resulting  from  on-track regular  bets,  an  amount equal to seven and ninety-five one hundredths percent of the total pool resulting  from  on-track  multiple  bets,  an amount  equal  to  ten  and one-half percent of the total pool resulting from on-track exotic bets, an  amount  equal  to  fifteen  and  one-half percent  of  the  total  daily pool resulting from on-track super exotic bets shall be used exclusively for purses, of which  an  amount  of  not less  than  ninety  percent  shall  be  used  exclusively for purses for overnight races conducted  by  such  association  or  corporation.  Such amounts  may  be  reduced upon an application approved by the commission and an agreement between the  licensed  harness  racing  corporation  or association   and   the  representative  horsemen's  organization  as  a condition to reduce the amounts of retained percentages as provided  for in  this  section. However, of the total amount available for purses, an amount as determined by contractual obligations between an  organization representing at least fifty-one percent of the owners and trainers using the  facilities  of such association or corporation for racing, training or stabling purposes and the association or corporation, shall  be  used for  the  administrative  purposes  of  said  organization  and for such welfare and medical plans for regularly employed  backstretch  employees principally   employed   at   the  facilities  of  such  corporation  or association as provided by said organization,  provided,  however,  that eligibility  for  benefits  in  such plans shall not be conditioned upon membership in such organization by any employee or employer thereof, and any denial of  eligibility  for  benefits  in  such  plans  which,  upon investigation  and  review  by  the  commission,  is  determined to have resulted from a person, firm, association, corporation  or  organization knowingly  aiding  in  or  permitting  eligibility  for  benefits  being conditioned upon membership in  such  organization  shall  subject  such organization  to  the penalties imposed under sections three hundred ten and three hundred twenty-one of this article but the ratio  between  the amounts  actually  expended  for  such welfare and medical plans and the cost actually incurred in administering such welfare and  medical  plans for  fiscal  years  of such corporation or association, on or after July twenty-fourth, nineteen hundred eighty-one, shall not be less  than  the ratio  between  such  amounts  actually expended and such costs actually incurred for the fiscal  year  immediately  prior  to  such  date.  Such organization  shall  annually  on  or  before  July first certify to the commission that it represents at least fifty-one percent of such  owners and   trainers   and  provide  copies  of  such  certification  to  such association or corporation. Any other organization claiming to represent at least fifty-one percent of  such  owners  and  trainers  may  file  a challenge  with  the  commission  within  fifteen  days of such original certification. The commission shall examine such claim and may undertake  studies and conduct hearings to determine the validity  of  such  claim. Within  sixty  days  of  receiving  such  challenge  and  based upon the findings of such studies and hearings, the  commission  shall  render  a decision on the validity of such claim and advise such organizations and association  or  corporation  of its determination. Upon receipt of such original  certification  by  such  organization,  the   association   or corporation  shall  make  such payments to said organization and, in the event of a challenge brought to any other  organization,  such  payments shall  continue to be made until such time as the commission renders its decision on such challenge; and  (iii) the balance of the retained percentage of  such  pools  and  the balance of the breaks may be held by such association or corporation for its  own  use  and  purposes  except  as provided in paragraph c of this subdivision and in subdivision four of section three hundred one of this article, provided, however, that the commission shall  report  annually, on or before July first, to the director of the budget, the chair of the senate  finance  committee  and the chair of the assembly ways and means committee the extent to which such corporations  and  associations  used such  retained  percentages  and  breakage  for operations, maintenance, capital improvements,  advertising  and  promotion,  administration  and general overhead and evaluate the effectiveness and make recommendations with  respect  to  the  application  of the reduced rates of taxation as provided for in subparagraph (i) of this paragraph in accomplishing  the objectives stated therein. Such report shall also specify the amounts of such retained percentages and breakage used for investments not directly related  to racing activities and such amounts used to declare dividends or other profit distributions, additions to capital stock, its sale  and transfer  and  additions  to  retained earnings. Such reports shall also include an analysis of any such agreements or proposals  to  conduct  or otherwise expand wagers authorized under article ten of this chapter and present  its  conclusions  with respect to the conduct of such wagering, the nature of such proposals  and  agreements,  and  recommendations  to ensure  the future maintenance of the intent of this article and article ten of this chapter.   b. (i) Of the sums retained  by  any  other  licensed  harness  racing association  or corporation other than those described in paragraph a of this subdivision, the applicable tax rates for  regular  bets  shall  be six-tenths  of one percent; for multiple bets shall be one and one-tenth percent; for exotic bets shall be five and six-tenths  percent  and  for super  exotic  bets  shall  be  seven percent, plus fifty percent of the breaks. Effective September first, nineteen hundred ninety-four, for all licensed harness racing associations and corporations that have  entered into  a contract with their representative horsemen's association on and after such date, such tax shall  be  one-half  of  one  percent  of  all wagers, plus fifty percent of the breaks.   Provided, however, that for any twelve-month period beginning on April first  in  nineteen  hundred ninety and any year thereafter, each of the applicable rates set forth above shall be increased  by  one-quarter  of one  percent  on  all  on-track  bets  of any such racing association or corporation that did not expend an amount equal to at least one-half  of one  percent  of  its  on-track  bets  during  the immediately preceding calendar year for enhancements consisting  of  capital  improvements  as defined  by  section  three hundred nineteen of this article, repairs to its physical plant, structures, and equipment  used  in  its  racing  or wagering  operations, as certified by the commission to the commissioner of taxation and finance no later than eighty days  after  the  close  of such  calendar  year,  and  five  special  events  at each track in each calendar year,  not  otherwise  conducted  in  the  ordinary  course  of  business,  the  purpose  of  which  shall  be  to encourage, attract and promote track attendance and  encourage  new  and  continued  patronage, which  events  shall  be  subject  to the approval of the commission for purposes  of  this subdivision. In this regard, expenditures by a county agricultural society pursuant to section three hundred nineteen of  this article  shall  be credited to the applicable harness racing association or corporation for this purpose. In the  determination  of  the  amounts expended   for  such  enhancements,  the  commission  may  consider  the immediately preceding twelve-month calendar period or the average of the two immediately preceding twelve-month calendar periods. Notwithstanding the foregoing no increase shall be imposed unless  such  corporation  or association  has been afforded a notice and opportunity to be heard. The commission shall promulgate  rules  and  regulations  to  implement  the provisions relating to notice and hearing.   Such  associations or corporations shall receive credit as a reduction of  the  daily  tax  by  the  state  for  the  privilege  of  conducting pari-mutuel  betting  of  amounts  equal to four-tenths percent of total daily pools resulting  from  the  simulcast  of  such  association's  or corporation's   races   to  licensed  facilities  operated  by  regional off-track betting corporations in accordance with section  one  thousand eight  of  this  chapter,  provided  however, that in no event shall the total daily credit exceed four-tenths percent of the total daily pool of such association or corporation which tax is hereby levied and shall  be paid  to  the  commissioner  of taxation and finance as a reasonable tax imposed by the state for the privilege of conducting pari-mutuel betting at races run at race meetings held by such association  or  corporation. The commission shall report annually, before July first, to the director of  the  budget, the chair of the senate finance committee and the chair of the assembly ways and  means  committee  the  extent  to  which  such corporations   and  associations  used  such  retained  percentages  and breakage for operations, maintenance, capital improvements,  advertising and  promotion,  administration  and  general  overhead and evaluate the effectiveness and make recommendations with respect to  the  application of the reduced rates of taxation as provided for in this subparagraph in accomplishing  the  objectives  stated  therein.  Such report shall also specify the amounts of such retained percentages and breakage  used  for investments  not  directly related to racing activities and such amounts used to declare dividends or other profit  distributions,  additions  to capital stock, its sale and transfer and additions to retained earnings. Such  reports  shall  also include an analysis of any such agreements or proposals to conduct or otherwise expand wagers authorized under article ten of this chapter and present its  conclusions  with  respect  to  the conduct  of  such wagering, the nature of such proposals and agreements, and recommendations to ensure the future maintenance of  the  intent  of this article.  (ii)  Of  the  sums  retained  by  such association or corporation, an amount equal to  one  and  three-quarters  percent  of  the  total  pool resulting  from on-track regular, multiple and exotic bets shall be used exclusively for the purpose of increasing purses  awarded  in  overnight races  conducted  by such association or corporation. Such amounts shall be in addition to purse moneys otherwise provided pursuant  to  existing contractual  obligations.  In  this  regard  an  amount  equal to twelve percent of the total bets in super exotic pools shall be used for purses in lieu of any such contractual obligations that might  otherwise  apply to purses to be awarded on super exotic bets. Any portion of such amount not  so used during any year shall be so used during the following year, failing which such portion shall  be  payable  to  the  commissioner  of taxation  and  finance  as  additional  tax.  In addition to the amounts  required in  this  paragraph,  fifty  percent  of  all  additional  sums retained,  as  a result of tax reductions provided in this section after September first, nineteen  hundred  ninety-four  to  qualified  licensed harness  racing  associations, shall be used exclusively for purposes of increasing  purses  awarded  in  overnight  races  conducted   by   such association   or   corporation,   provided   that  such  association  or corporation has entered into a written agreement with its representative horsemen's organization on and after September first,  nineteen  hundred ninety-four.  Notwithstanding anything contained herein to the contrary, in a harness special betting district the amount to be used  for  purses or  the methodology for calculating the amount to be used for purses may be specified in a written contract between a harness racing  association or  corporation  and  its  representative  horsemen's  association.  The balance of the retained percentage of such pool  may  be  held  by  such corporation or association for its own use and purposes.  (iii)  Of  the  amount  of the breaks from on-track regular, multiple, exotic and super exotic bets such association or corporation  shall  pay fifty  percent  to the commissioner of taxation and finance. The balance of such breaks may be held by such association or  corporation  for  its own use and purposes.  (iv)  The  commission  shall  as  a  condition  of  racing  require an association authorized to operate in areas  other  than  Westchester  or Nassau  county to withhold one percent of all purses and to pay such sum to the horsemen's organization  representing  the  owners  and  trainers using  the  facilities of such association which had a contract with the association  governing  the  conditions  of  racing  on  January  first, nineteen hundred ninety-two, as determined by the commission.   Any  other  horsemen's  organization may apply to the commission to be approved as the qualified organization to receive  payment  of  the  one percent  of  all  purses  by submitting to the commission proof of both, that (i) such organization represents more than fifty-one percent of all the  owners  and  trainers  using  the  same  facilities  and  (ii)  the horsemen's   organization   previously  approved  as  qualified  by  the commission does not represent fifty-one percent of all  the  owners  and trainers  using the same facilities. If the commission is satisfied that the documentation submitted with the application of any other horsemen's organization is conclusive with respect to subparagraphs (i) and (ii) of this  paragraph,  the  commission  may  approve  the  applicant  as  the qualified recipient organization.   In  the best interests of racing, upon receipt of such an application, the commission may direct  the  payments  to  the  previously  qualified horsemen's  organization to continue uninterrupted, or it may direct the payments to be withheld and placed in interest-bearing  accounts  for  a period not to exceed ninety days, during which time the commission shall review  and  approve  or  disapprove the application. Funds held in such manner shall be paid to the organization approved by the commission.  In no  event  shall the commission accept more than one such application in any calendar year from the same horsemen's organization.   The funds authorized to be paid by  the  commission  are  to  be  used exclusively  for  the benefit of those horsemen racing in New York state through the administrative  purposes  of  such  qualified  organization, benevolent  activities  on  behalf of backstretch employees, and for the promotion of equine research.   c.  Of  the  sums  retained  by  any  harness  racing  association  or corporation, an amount equal to one percent of the total pools resulting from  on-track  regular, multiple and exotic bets and an amount equal to three percent of the total pools resulting from  on-track  super  exotic  bets  shall be paid to the agriculture and New York state horse breeding development fund.   d.  Every  harness  racing association or corporation shall pay to the commission as a regulatory fee, which fee is hereby  levied,  six-tenths of  one  percent  of  the total daily on-track pari-mutuel pools of such association or corporation.   2. The state tax levied adjusted for any credits in this section shall be paid to the  commissioner  of  taxation  and  finance,  on  the  last business day of each month and shall cover taxes due for the period from the  sixteenth  day  of the preceding month through the fifteenth day of the current month provided, however, that such payments required  to  be made  on  March  thirty-first  shall  include all taxes due and accruing through the last full week of racing in March of the current year or  as otherwise  determined by the commissioner, and shall be accompanied by a report under oath showing the total of all such  contributions  together with  such  other information as the commissioner may require. A penalty of five percent and interest at the rate of one percent per  month  from the  date  the  report is required to be filed to the date of payment of the tax shall be payable in case any tax imposed by this section is  not paid  when  due. If the commissioner determines that any moneys received under this section were paid in error, the commissioner  may  cause  the same  to  be  refunded  without  interest  out  of  any moneys collected thereunder, provided an application therefor is filed with it within one year from the time the erroneous payment was made. Such taxes,  interest and  penalties  when  collected, after the deduction of refunds of taxes erroneously paid, shall be paid by the  commissioner  into  the  general fund of the state treasury.   3.  Except as otherwise provided by law no county, city, town, village or other political subdivision of the state may impose, levy or  collect a  tax on admission fees or tax on admission, on bets made by patrons in the form of purchases of pari-mutuel tickets or upon  such  tickets,  on pari-mutuel  pools,  on breaks, on dividends or payments made to winning bettors, or on that part of  the  pari-mutuel  pools  or  breaks  to  be retained by harness horse racing associations or corporations under this section.   4.  Notwithstanding  any other provisions of this chapter, there shall be no pari-mutuel tax imposed upon  the  compensation  received  by  any harness  racing  association  or  corporation  in  consideration for (a) permission to have wagering conducted outside this state on races run by such association or corporation, and (b) the simulcasting  outside  this state  of  races run by such association or corporation, except for such permission or such simulcasting  as  may  be  granted  to  an  off-track betting  operator  in  the  state  of  Connecticut  by  a harness racing association or corporation located in Nassau or Westchester county.  Any such  association or corporation so simulcasting to an off-track betting operator in  the  state  of  Connecticut  shall  pay  to  the  New  York commissioner   of  taxation  and  finance  a  reasonable  tax  for  such permission and privilege for such simulcasting, which is hereby  levied, at  the  following  rates:  one  and one-tenth per centum of total daily regular and multiple bets; three and one-tenth per centum of total daily exotic bets; and three and one-half per  centum  of  total  daily  super exotic bets.   5.  Tax  rates  in  event  of  failure  to maintain pari-mutuel racing activity. a. Notwithstanding any other provision of this section to  the contrary,  for  any  calendar year commencing on or after January first, nineteen hundred eighty-nine, in which a harness racing  association  or corporation  does  not  conduct a minimum number of pari-mutuel programs and pari-mutuel races at its facilities equal to at least ninety percent  of  the  programs  and  races  so  conducted  during  nineteen   hundred eighty-five or during nineteen hundred eighty-six, whichever is less, in lieu  of  the tax rates set forth in subdivision one of this section the applicable  pari-mutuel  tax  rates  for such association or corporation with respect to on-track pari-mutuel  betting  pools  during  such  year shall be as follows:  (i)  For  such  an association or corporation authorized to operate in Westchester or Nassau county: of total daily  on-track  pools  resulting from  regular  bets,  three  and  seventy-five hundredths percent of the first five hundred thousand dollars comprising such pools and  five  and twenty-five  hundredths  percent of the amount in excess of five hundred thousand dollars, plus fifty percent  of  the  breaks;  of  total  daily on-track  pools  resulting  from  multiple  bets,  four and seventy-five hundredths  percent  of  the  first  three  hundred   thousand   dollars comprising  such pools and six and twenty-five hundredths percent of the amount in excess of three hundred thousand dollars, plus  fifty  percent of the breaks; of total daily on-track pools resulting from exotic bets, eight  and  seventy-five  hundredths  percent  of  the first two hundred thousand  dollars  comprising  such  pools,  and  ten  and   twenty-five hundredths  percent  of  the  amount  in  excess of two hundred thousand dollars, plus fifty percent of the breaks; and of total  daily  on-track pools  resulting  from  super  exotic  bets,  seven  percent, plus fifty percent of the breaks; and  (ii) For any harness racing association or corporation other than  one described in subparagraph (i) of this paragraph: of total daily on-track pools  resulting from regular bets, one and one-half percent, plus fifty percent of the breaks; of total  daily  on-track  pools  resulting  from multiple  bets,  two percent, plus fifty percent of the breaks; of total daily on-track pools  resulting  from  exotic  bets,  six  and  one-half percent,  plus  fifty percent of the breaks; and of total daily on-track pools resulting from  super  exotic  bets,  seven  percent,  plus  fifty percent of the breaks.   b.   The  provisions  of  this  subdivision  shall  not  apply  to  an association  or  corporation  for  any  calendar  year  for  which   the commission certifies to the commissioner of taxation and finance:  (i) by December fifteenth of the year immediately preceding such year, that  such  association  or corporation has been assigned for such year, from the programs and races it requested, at least the minimum number of programs and races prescribed in paragraph a of this subdivision, or, if fewer than such number were assigned for such year, that the  assignment of  such  lesser  number  was  for  good cause due to factors beyond the control of such association or corporation  or  because  the  commission found  that it would be uneconomical or impractical for such association or corporation to be assigned the prescribed number; and  (ii) by January thirty-first of the  year  immediately  subsequent  to such  year, that such association or corporation did conduct such number of programs and races as were certified pursuant to subparagraph (i)  of this paragraph, or if it failed to conduct such number that such failure was  for  good  cause  due  to factors beyond its control or because the commission found it uneconomical or impractical for such association  or corporation to conduct such a number.   c.  For  any  calendar  year for which the commission does not certify pursuant to the provisions of subparagraph (i) of paragraph  b  of  this subdivision  with  respect  to  an  association  or corporation, the tax imposed by this section shall be computed by substituting the provisions of paragraph a of this subdivision for the provisions of paragraph a  or b, whichever is applicable, of subdivision one of this section and shall pay  the tax so computed to the commissioner of taxation and finance. In  such computation and payment, all other provisions of this section shall apply as if the provisions of this paragraph and of paragraph a of  this subdivision  had  been  incorporated  in  whole  in  paragraph  a  or b, whichever is applicable, of subdivision one of this section.   d.  For  any  calendar  year for which the commission does not certify pursuant to the provisions of subparagraph (ii) of paragraph b  of  this subdivision  with  respect  to  an  association  or corporation, the tax required to be paid hereunder for  such  year  shall  be  equal  to  the difference  between  the  tax  imposed  pursuant  to  the  provisions of paragraph a of this subdivision and the  tax  imposed  pursuant  to  the provisions  of paragraph a or b, whichever is applicable, of subdivision one of this section, less one-half of such difference in recognition  of purses that were required to be paid, plus an additional amount equal to ten percent of such tax in the event of a willful failure to comply with the  provisions  of subparagraph (ii) of paragraph b of this subdivision and such association or corporation shall pay the tax so computed to the commissioner of taxation and finance on or before March fifteenth of the following year. Notwithstanding the provisions of this  subdivision,  in the event that upon appeal from the determination of the commission that the  certification  provided in paragraph b of this subdivision will not be made, it is finally determined that the commission erred  in  failing to  so  certify  and  that  any  moneys  received by the commissioner of taxation and finance under paragraph c of this subdivision were paid  in error, the same shall be refunded at the rate of interest of six percent per annum. Payment of such tax due, or the anticipation of such payment, shall  not  affect the determination of purses in the year in which such tax arises or in the year in which such payment is made nor  shall  such payment   in  any  other  manner  be  considered  in  any  statutory  or contractual calculation of purse obligations.   e. Written notice of the certification of the commission  pursuant  to the  provisions of paragraph b of this subdivision shall be given by the commission to the applicable association or  corporation  by  the  dates therein   specified.   In   like   manner,   written  notice  that  such certification will not be made shall be given by the commission  to  the commissioner  of  taxation and finance and the applicable association or corporation by such dates.