2023 New York Laws › PML - Racing, Pari-Mutuel Wagering and Breeding Law › Article 2 - Thoroughbred Racing and Breeding › 236 - Disposition of Pari-Mutuel Pools; Percentage Payable to State as a Tax; Authority of Counties of Certain Cities to Impose a Tax.

§  236.  Disposition of pari-mutuel pools; percentage payable to state
as a tax; authority of counties or certain cities to impose a tax.    1.
Every  corporation  authorized under this chapter to conduct pari-mutuel
betting at a race meeting on races run thereat, except  as  provided  in
section  two  hundred  thirty-eight  of this article with respect to the
franchised corporation, shall  distribute  all  sums  deposited  in  any
pari-mutuel  pool  to  the holders of winning tickets therein, providing
such tickets be presented for payment before April  first  of  the  year
following  the  year  of  their  purchase,  less an amount that shall be
established and retained by such racing corporation of between  fourteen
to  twenty percent of the total deposits in pools resulting from regular
on-track bets and less  sixteen  to  twenty-two  percent  of  the  total
deposits  in pools resulting from multiple on-track bets and less twenty
to thirty percent of the total deposits in pools resulting  from  exotic
on-track  bets  and less twenty to thirty-six percent of the total pools
resulting  from  super  exotic  on-track  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  and  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.  "Super
exotic  bets"  shall have the meaning set forth in section three hundred
one of this chapter. Of the amount so retained there shall  be  paid  by
such  corporation  to  the  department  of  taxation  and  finance  as a
reasonable tax by the state for the privilege of conducting  pari-mutuel
betting  on  the races run at the race meeting held by such corporation,
which tax is hereby levied, the following percentages of the total pool,
plus fifty-five percent of the breaks; the applicable rates for  regular
and  multiple  bets  shall  be  one and one-half percent; the applicable
rates for exotic bets shall be six and  three-quarter  percent  and  the
applicable  rate  for super exotic bets shall be seven and three-quarter
percent. Effective  on  and  after  September  first,  nineteen  hundred
ninety-four, the applicable tax rate shall be one percent of all wagers,
provided  that,  an  amount equal to one-half the difference between the
taxation rate for on-track regular,  multiple  and  exotic  bets  as  of
December  thirty-first,  nineteen  hundred ninety-three and the rates on
such on-track wagers as herein provided shall be  used  exclusively  for
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-quarter
of  one percent on all on-track bets of any such racing 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
two hundred thirty-seven 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  prior

approval  of  the  commission  for  purposes of this subdivision. 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. Provided further, however, that of the portion of  the
increased  amounts  retained  by  such  corporation  above those amounts
retained in nineteen hundred eighty-four, an  amount  of  such  increase
shall be distributed to purses in the same proportion as commissions and
purses were distributed during nineteen hundred eighty-four as certified
by  the  commission. Such corporation in the second zone shall receive a
credit against the daily tax imposed by this subdivision  in  an  amount
equal  to four-tenths of one percent of total daily pools resulting from
the  simulcast  of  such  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 sixty
percent of the amount of  such  credit  shall  be  used  exclusively  to
increase  purses for overnight races conducted by such corporation; and,
provided further, that in no event shall such total daily credit  exceed
four-tenths of one percent of the total daily pool of such corporation.
Such corporation shall pay to the New York state thoroughbred breeding
and development fund one-half of one percent of the total daily on-track
pari-mutuel  pools  from  regular,  multiple  and exotic bets, and three
percent of super exotic bets. The corporation shall receive credit as  a
reduction  of  the  tax  by  the  state  for the privilege of conducting
pari-mutuel betting for the amounts,  except  amounts  paid  from  super
exotic  betting  pools, paid to the New York state thoroughbred breeding
and   development   fund   after   January   first,   nineteen   hundred
seventy-eight.
Such  corporation  shall distribute to purses an amount equal to fifty
percent of any  compensation  it  receives  from  simulcasting  or  from
wagering conducted outside the United States. Such 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 corporation.
2.  The  balance  of  the  retained percentage of such pool and of the
breaks shall be held by such corporation for its own use  and  purposes,
except  that  in  addition  to  any  payments  to purses provided for in
subdivision one of this section, an amount equal  to  two  and  one-half
percent  of  the  total  pools  resulting from on-track regular bets and
exotic bets and an amount equal to three and  one-half  percent  of  the
total pools resulting from on-track multiple bets and an amount equal to
twelve  percent  of on-track super exotic bets shall be used exclusively
for the purpose of increasing purses  (including  stakes,  premiums  and
prizes)  awarded  to horses in races conducted by such corporation. Such
two and one-half percent and three and  one-half  percent  shall  be  in
addition  to (i) four and one-half percent of such total pools resulting
from regular and multiple wagers and five and one-half percent  of  such
total pools resulting from exotic wagers, or (ii) the percentage of such
total  pools  used  for  purses  (including stakes, premiums and prizes)
during the year nineteen hundred eighty-two, whichever is  larger.  Such
percentage  of  the  total  pools mentioned in this subdivision shall be
used for  purses  (including  stakes,  premiums  and  prizes)  in  races
hereafter  conducted  by  such  corporation, and any portion 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.  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  corporation  used  and 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  subdivision one of this section in accomplishing the objectives
stated therein. Such report  shall  also  specify  the  amount  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.
3. Tax rates in event of a  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 racing corporation in zone two
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  corporation  with  respect  to  on-track
pari-mutuel  betting  pools  during  such year shall be increased by one
percent of regular, multiple and exotic betting  pools.  Notwithstanding
the foregoing, no increase shall be proposed unless such corporation 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.
b. The provisions of this subdivision shall not apply to a 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 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  corporation  or  because  the  commission  found  that it would be
uneconomical or impractical for such  corporation  to  be  assigned  the
prescribed number; and
(ii)  by  January  thirty-first  of the year immediately subsequent to
such year, that such 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 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 a  corporation,  the  tax  imposed  by  this
section  shall be computed by substituting the provisions of paragraph a
of this subdivision for  the  provisions  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 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 a corporation, the tax required to be paid
hereunder for such year shall be equal to the difference between the tax
imposed pursuant to paragraph a of this subdivision and the tax  imposed
pursuant  to  the  provisions  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
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 balance of 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 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 corporation by such dates.
4.  The payment of the state tax imposed by this section shall be made
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  of taxation and finance, and shall be
accompanied by a report under  oath,  showing  the  total  of  all  such
contributions,  together with such other information as the commissioner
of taxation and finance may require. A penalty of five  per  centum  and
interest  at  the  rate  of  one  per centum 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 of taxation and finance determines that any moneys
received under this subdivision were paid in error, the commissioner  of
taxation  and finance may cause the same to be refunded without interest
out of any moneys collected thereunder, provided an application therefor
is filed with the commissioner of taxation and finance 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 of taxation and
finance into the general fund of the state treasury.
5. No county, city, town, village or other  political  subdivision  of
the state may impose, levy or collect a tax on admission fees or tickets

of  admission,  on  wagers  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 racing
corporations under this section, except as otherwise  provided  in  this
chapter.