2023 New York Laws › PML - Racing, Pari-Mutuel Wagering and Breeding Law › Article 2 - Thoroughbred Racing and Breeding › 208 - Conditions of Franchise Award.

§  208.  Conditions  of  franchise  award.  1. In consideration of the
franchise and in accordance with its franchise agreement, the franchised
corporation shall remit to the state, each year,  no  later  than  April
fifth,  a  franchise  fee payment. The franchise fee shall be calculated
and equal to the lesser of paragraph (a) or (b) of this  subdivision  as
follows:  (a)  adjusted  net  income,  including  all sources of audited
generally accepted accounting  principles  net  income  as  of  December
thirty-first  (i)  plus  the amount of depreciation and amortization for
such year as set forth on the statement of  cash  flows  (ii)  less  the
amount  received  by the franchised corporation for capital expenditures
and (iii) less principal payments made for the repayment of debt; or (b)
operating  cash  which  is  defined  as  cash  available   on   December
thirty-first (i) which excludes all restricted cash accounts, segregated
accounts  as per audited financial statements and cash on hand needed to
fund the on-track pari-mutuel operations through the  vault,  (ii)  less
ninety  days  of  operating  expenses  pursuant  to  generally  accepted
accounting principles which shall be an average calculated  by  dividing
the  current year's annual budget by the number of days in such year and
multiplying that number by ninety.
2. As a condition of franchise acceptance, the franchised  corporation
and  its  predecessor shall irrevocably relinquish any present or future
rights that it might have, or might claim, with respect to  thoroughbred
racing  facilities  and  associated  assets  located  in  Queens county,
Saratoga county and  jointly  located  in  Nassau  and  Queens  counties
whereat  running  races,  steeplechases or race meetings and pari-mutuel
betting on the outcome of the same have been  conducted,  including  (a)
all the land underlying the racetracks, (b) all improvements thereon and
all  physical  assets  thereon,  and  (c) all assets associated with the
franchise and  the  operation  of  the  racetracks,  including,  without
limitation  all  rights  to  intellectual  property and simulcasting now
existing or hereafter created, and  any  and  all  franchise  rights  or
interests  in  such  assets  including  but  not  limited  to  leasehold
improvements and interests. The franchised corporation  shall  take  all
appropriate  action  on the date of substantial consummation, as defined
by the federal bankruptcy code, of the confirmed chapter eleven plan  of
reorganization  of  the  non-profit  racing association known as The New
York Racing Association, Inc. in the  pending  bankruptcy  case  in  the
Southern  District of New York to ensure that the People of the State of
New York are vested with unencumbered ownership in the real  estate  for
the three racetracks, including all improvements thereon.
3.  As a condition of franchise acceptance, the franchised corporation
shall make application with the commission for live thoroughbred  racing
dates  at  thoroughbred  racing  facilities  located  in  Queens county,
Saratoga county and jointly located in Nassau and Queens counties  in  a
manner substantially similar to the racing dates presently undertaken.
4.  As a condition of franchise acceptance, the franchised corporation
shall agree that it will conduct running races, steeplechases  and  race
meetings  in accordance with the provisions thereof and that all running
races, steeplechases or race  meetings  conducted  thereunder  shall  be
subject  to  such  reasonable  rules  and  regulations from time to time
prescribed by the gaming commission.
4-a.  As  a  condition  of  franchise   acceptance,   the   franchised
corporation  shall  enter  into a franchise agreement that shall require
such  franchised  corporation  to  use  its  best  efforts  to   satisfy
performance  standards,  measured  every  four  years  by  the franchise
oversight board.   Such performance standards  shall  relate  to  racing
dates,  New  York  bred  horse  races,  horse  stalls, jockey and equine
safety,  state  concentrated  animal  feeding   operation,   backstretch

conditions,  the  Saratoga  training  facility,  handle  and attendance,
purses, expenses of the  franchised  corporation,  and  the  communities
surrounding  Aqueduct racetrack, Belmont Park racetrack and the Saratoga
race  course.  As  a  condition  of franchise acceptance, the franchised
corporation shall  continue  to  lease  for  nominal  consideration  the
ballfield  property  near  the Aqueduct racetrack that includes lots 62,
118, 119, 127, 133, 135, 136 and 138 of block 11535; lots  73,  110  and
113  of  block  11536; lots 5, 9, 10, 12, 14 and 110 of block 11551; and
lot 204 of block  11562  in  Queens  County,  as  a  ballfield  for  the
appropriate  community  organization,  and  convey  the  parcel near the
Aqueduct racetrack that includes lot 1 of  blocks  11558  and  11560  in
Queens  county to the New York city public school construction authority
should such authority desire and commit to purchase such parcel at  fair
market value.
5. A franchise may be revoked and cancelled by the commission only for
the  reasons  and  in  the  manner  prescribed  under  the provisions of
sections two hundred twelve and two hundred forty-four of this  article.
The action of the commission in revoking a franchise shall be reviewable
in  the  supreme  court  in  the  manner  provided by and subject to the
provisions of article seventy-eight of the civil practice law and rules.
6. (a) All contracts entered into by the  franchised  corporation  for
the  procurement of goods or services shall be pursuant to a competitive
bidding purchasing policy approved by the franchise oversight board.
(b) In its review of the contracts pursuant to  this  section  in  any
contract  in  excess  of  one  hundred  thousand  dollars, the franchise
oversight board may review the character and fitness of  the  entity  or
its principals entering into contracts with a franchised corporation and
provided  further the oversight board may require such information as it
deems necessary including the power to subpoena such books, records, and
other pertinent information related to the contracts from the contractor
or vendor of any contract.
7. Notwithstanding the provisions of  section  seven  of  the  general
business law, or any other inconsistent provision of general, special or
local law, the commission shall specify annually the dates on which, and
the  hour  of the first post time for days during which, such franchised
corporation may operate at the places and for the full  number  of  days
specified in its franchise.
8.  The  commission shall permit the franchised corporation to conduct
pari-mutuel  betting  in  the  manner  and  subject  to  the  conditions
prescribed  by  this chapter, at the racetracks described in such racing
franchise for the duration of such racing franchise.
9. (a) The franchised corporation shall maintain  a  separate  account
for all funds held on deposit in trust by the corporation for individual
horsemen's  accounts.  Purse  funds  shall be paid by the corporation as
required to meet its purse payment obligations. Funds held in horsemen's
accounts shall only be released or applied as requested and directed  by
the individual horseman. Through calendar year two thousand twenty-seven
the  New  York  Jockey  Injury Compensation Fund, Inc. may use up to two
million  dollars  from  the  account  established   pursuant   to   this
subdivision  to  pay  the  annual  costs required by section two hundred
twenty-one of this article.
(b)  Unless  otherwise  permitted  by  written  agreement   with   the
horsemen's  organization  recognized  pursuant  to  section  two hundred
twenty-eight of this  article  the  franchised  corporation  shall  fund
purses  in  an  amount  (on an annual basis and not a per-race basis) in
excess of that required by this chapter,  so  as  to  reduce  the  purse
cushion at the end of each calendar year by the amount set forth below:
Year      Reduction of Purse            Maximum Purse Cushion at
Cushion for Calendar Year     Year End Not to Exceed
2008      $0                            $20.0 million
2009      $1.0 million                  $19.0 million
2010      $1.0 million                  $18.0 million
2011      $2.0 million                  $16.0 million
2012      $2.0 million                  $14.0 million
2013      $3.0 million                  $11.0 million
2014      $3.0 million                  $8.0 million
2015      $2.0 million                  $6.0 million
Thereafter  the  maximum purse cushion at year end shall not exceed $6.0
million.
(c) The franchised corporation shall establish and maintain a separate
account for funds to be held on  deposit  in  trust  by  the  franchised
corporation  for  the  horsemen's  organization  recognized  pursuant to
section two hundred  twenty-eight  of  this  article.  Starting  in  two
thousand  eighteen  and  annually  thereafter,  funds  from  the account
established pursuant to this  subdivision  shall  be  deposited  in  the
separate  account  established  under  this paragraph in an amount to be
agreed  upon  by  the  franchised   corporation   and   the   horsemen's
organization  recognized pursuant to section two hundred twenty-eight of
this article.  Funds  held  in  this  account  shall  be  used  by  such
recognized  horsemen's  organization  solely  as  collateral  to  secure
workers' compensation insurance coverage, including through the New York
Jockey Injury Compensation Fund, Inc. Such coverage shall  include  high
deductible programs and forms of self-insurance.
(d)  In  the  event the horsemen's organization recognized pursuant to
section two hundred twenty-eight of this  article  determines  that  the
funds are no longer needed as collateral to secure workers' compensation
insurance  coverage,  then, upon agreement by the franchised corporation
and such appropriately recognized horsemen's organization, funds in  the
separate  account  established  under  paragraph (c) of this subdivision
shall be returned to the account established pursuant to  paragraph  (a)
of this subdivision.
(e) The account shall be subject to annual audit by a certified public
accountant  approved and paid by the appropriately recognized horsemen's
organization.