N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 236

§ 236. Disposition of pari-mutuel pools; percentage payable to state\nas a tax; authority of counties or certain cities to impose a tax. 1.\nEvery corporation authorized under this chapter to conduct pari-mutuel\nbetting at a race meeting on races run thereat, except as provided in\nsection two hundred thirty-eight of this article with respect to the\nfranchised corporation, shall distribute all sums deposited in any\npari-mutuel pool to the holders of winning tickets therein, providing\nsuch tickets be presented for payment before April first of the year\nfollowing the year of their purchase, less an amount that shall be\nestablished and retained by such racing corporation of between fourteen\nto twenty percent of the total deposits in pools resulting from regular\non-track bets and less sixteen to twenty-two percent of the total\ndeposits in pools resulting from multiple on-track bets and less twenty\nto thirty percent of the total deposits in pools resulting from exotic\non-track bets and less twenty to thirty-six percent of the total pools\nresulting from super exotic on-track bets, plus the breaks. The\nretention rate to be established is subject to the prior approval of the\ngaming commission. Such rate may not be changed more than once per\ncalendar quarter to be effective on the first day of the calendar\nquarter. "Exotic bets" and "multiple bets" shall have the meanings set\nforth in section five hundred nineteen of this chapter and breaks are\nhereby defined as the odd cents over any multiple of five for payoffs\ngreater than one dollar five cents but less than five dollars, over any\nmultiple of ten for payoffs greater than five dollars but less than\ntwenty-five dollars, over any multiple of twenty-five for payoffs\ngreater than twenty-five dollars but less than two hundred fifty\ndollars, or over any multiple of fifty for payoffs over two hundred\nfifty dollars. "Super exotic bets" shall have the meaning set forth in\nsection three hundred one of this chapter. Of the amount so retained\nthere shall be paid by such corporation to the department of taxation\nand finance as a reasonable tax by the state for the privilege of\nconducting pari-mutuel betting on the races run at the race meeting held\nby such corporation, which tax is hereby levied, the following\npercentages of the total pool, plus fifty-five percent of the breaks;\nthe applicable rates for regular and multiple bets shall be one and\none-half percent; the applicable rates for exotic bets shall be six and\nthree-quarter percent and the applicable rate for super exotic bets\nshall be seven and three-quarter percent. Effective on and after\nSeptember first, nineteen hundred ninety-four, the applicable tax rate\nshall be one percent of all wagers, provided that, an amount equal to\none-half the difference between the taxation rate for on-track regular,\nmultiple and exotic bets as of December thirty-first, nineteen hundred\nninety-three and the rates on such on-track wagers as herein provided\nshall be used exclusively for purses. Provided, however, that for any\ntwelve-month period beginning on April first in nineteen hundred ninety\nand any year thereafter, each of the applicable rates set forth above\nshall be increased by one-quarter of one percent on all on-track bets of\nany such racing corporation that did not expend an amount equal to at\nleast one-half of one percent of its on-track bets during the\nimmediately preceding calendar year for enhancements consisting of\ncapital improvements as defined by section two hundred thirty-seven of\nthis article, repairs to its physical plant, structures, and equipment\nused in its racing or wagering operations as certified by the gaming\ncommission to the commissioner of taxation and finance no later than\neighty days after the close of such calendar year, and five special\nevents at each track in each calendar year, not otherwise conducted in\nthe ordinary course of business, the purpose of which shall be to\nencourage, attract and promote track attendance and encourage new and\ncontinued patronage, which events shall be subject to the prior approval\nof the gaming commission for purposes of this subdivision. In the\ndetermination of the amounts expended for such enhancements, the gaming\ncommission may consider the immediately preceding twelve-month calendar\nperiod or the average of the two immediately preceding twelve-month\ncalendar periods. Provided further, however, that of the portion of the\nincreased amounts retained by such corporation above those amounts\nretained in nineteen hundred eighty-four, an amount of such increase\nshall be distributed to purses in the same proportion as commissions and\npurses were distributed during nineteen hundred eighty-four as certified\nby the gaming commission. Such corporation in the second zone shall\nreceive a credit against the daily tax imposed by this subdivision in an\namount equal to four-tenths of one percent of total daily pools\nresulting from the simulcast of such corporation's races to licensed\nfacilities operated by regional off-track betting corporations in\naccordance with section one thousand eight of this chapter, provided\nhowever, that sixty percent of the amount of such credit shall be used\nexclusively to increase purses for overnight races conducted by such\ncorporation; and, provided further, that in no event shall such total\ndaily credit exceed four-tenths of one percent of the total daily pool\nof such corporation.\n Such corporation shall pay to the New York state thoroughbred breeding\nand development fund one-half of one percent of the total daily on-track\npari-mutuel pools from regular, multiple and exotic bets, and three\npercent of super exotic bets. The corporation shall receive credit as a\nreduction of the tax by the state for the privilege of conducting\npari-mutuel betting for the amounts, except amounts paid from super\nexotic betting pools, paid to the New York state thoroughbred breeding\nand development fund after January first, nineteen hundred\nseventy-eight.\n Such corporation shall distribute to purses an amount equal to fifty\npercent of any compensation it receives from simulcasting or from\nwagering conducted outside the United States. Such corporation shall pay\nto the gaming commission as a regulatory fee, which fee is hereby\nlevied, six-tenths of one percent of the total daily on-track\npari-mutuel pools of such corporation.\n 2. The balance of the retained percentage of such pool and of the\nbreaks shall be held by such corporation for its own use and purposes,\nexcept that in addition to any payments to purses provided for in\nsubdivision one of this section, an amount equal to two and one-half per\ncentum of the total pools resulting from on-track regular bets and\nexotic bets and an amount equal to three and one-half per centum of the\ntotal pools resulting from on-track multiple bets and an amount equal to\ntwelve per centum of on-track super exotic bets shall be used\nexclusively for the purpose of increasing purses (including stakes,\npremiums and prizes) awarded to horses in races conducted by such\ncorporation. Such two and one-half per centum and three and one-half per\ncentum shall be in addition to (i) four and one-half per centum of such\ntotal pools resulting from regular and multiple wagers and five and\none-half per centum of such total pools resulting from exotic wagers, or\n(ii) the percentage of such total pools used for purses (including\nstakes, premiums and prizes) during the year nineteen hundred\neighty-two, whichever is larger. Such percentage of the total pools\nmentioned in this subdivision shall be used for purses (including\nstakes, premiums and prizes) in races hereafter conducted by such\ncorporation, and any portion not so used during any year shall be so\nused during the following year, failing which such portion shall be\npayable to the commissioner of taxation and finance as additional tax.\nThe racing and wagering board shall report annually, on or before July\nfirst, to the director of the budget, the chairman of the senate finance\ncommittee and the chairman of the assembly ways and means committee the\nextent to which such corporation utilized and retained percentages and\nbreakage for operations, maintenance, capital improvements, advertising\nand promotion, administration and general overhead and evaluate the\neffectiveness and make recommendations with respect to the application\nof the reduced rates of taxation as provided for in subdivision one of\nthis section in accomplishing the objectives stated therein. Such report\nshall also specify the amount of such retained percentages and breakage\nused for investments not directly related to racing activities and such\namounts used to declare dividends or other profit distributions,\nadditions to capital stock, its sale and transfer and additions to\nretained earnings. Such reports shall also include an analysis of any\nsuch agreements or proposals to conduct or otherwise expand wagers\nauthorized under article ten of this chapter and present its conclusions\nwith respect to the conduct of such wagering, the nature of such\nproposals and agreements, and recommendations to ensure the future\nmaintenance of the intent of this article.\n 3. Tax rates in event of a failure to maintain pari-mutuel racing\nactivity. a. Notwithstanding any other provision of this section to the\ncontrary, for any calendar year commencing on or after January first,\nnineteen hundred eighty-nine, in which a racing corporation in zone two\ndoes not conduct a minimum number of pari-mutuel programs and\npari-mutuel races at its facilities equal to at least ninety per centum\nof the programs and races so conducted during nineteen hundred\neighty-five or during nineteen hundred eighty-six, whichever is less, in\nlieu of the tax rates set forth in subdivision one of this section the\napplicable pari-mutuel tax rates for such corporation with respect to\non-track pari-mutuel betting pools during such year shall be increased\nby one per centum of regular, multiple and exotic betting pools.\nNotwithstanding the foregoing, no increase shall be proposed unless such\ncorporation has been afforded notice and opportunity to be heard. The\nracing and wagering board shall promulgate rules and regulations to\nimplement the provisions relating to notice and hearing.\n b. The provisions of this subdivision shall not apply to a corporation\nfor any calendar year for which the state racing and wagering board\ncertifies to the commissioner of taxation and finance:\n (i) by December fifteenth of the year immediately preceding such year,\nthat such corporation has been assigned for such year, from the programs\nand races it requested, at least the minimum number of programs and\nraces prescribed in paragraph a of this subdivision, or, if fewer than\nsuch number were assigned for such year, that the assignment of such\nlesser number was for good cause due to factors beyond the control of\nsuch corporation or because the board found that it would be\nuneconomical or impractical for such corporation to be assigned the\nprescribed number; and\n (ii) by January thirty-first of the year immediately subsequent to\nsuch year, that such corporation did conduct such number of programs and\nraces as were certified pursuant to subparagraph (i) of this paragraph,\nor if it failed to conduct such number that such failure was for good\ncause due to factors beyond its control or because the board found it\nuneconomical or impractical for such corporation to conduct such a\nnumber.\n c. For any calendar year for which the state racing and wagering board\ndoes not certify pursuant to the provisions of subparagraph (i) of\nparagraph b of this subdivision with respect to a corporation, the tax\nimposed by this section shall be computed by substituting the provisions\nof paragraph a of this subdivision for the provisions of subdivision one\nof this section and shall pay the tax so computed to the commissioner of\ntaxation and finance. In such computation and payment, all other\nprovisions of this section shall apply as if the provisions of this\nparagraph and of paragraph a of this subdivision had been incorporated\nin whole in subdivision one of this section.\n d. For any calendar year for which the state racing and wagering board\ndoes not certify pursuant to the provisions of subparagraph (ii) of\nparagraph b of this subdivision with respect to a corporation, the tax\nrequired to be paid hereunder for such year shall be equal to the\ndifference between the tax imposed pursuant to paragraph a of this\nsubdivision and the tax imposed pursuant to the provisions of\nsubdivision one of this section less one-half of such difference in\nrecognition of purses which were required to be paid, plus an additional\namount equal to ten per centum of such tax in the event of a willful\nfailure to comply with the provisions of subparagraph (ii) of paragraph\nb of this subdivision, and such corporation shall pay the tax so\ncomputed to the commissioner of taxation and finance on or before March\nfifteenth of the following year. Notwithstanding the provisions of this\nsubdivision, in the event that upon appeal from the determination of the\nstate racing and wagering board that the certification provided in\nparagraph b of this subdivision will not be made, it is finally\ndetermined that such board was erroneous in failing to so certify and\nthat any moneys received by the commissioner of taxation and finance\nunder paragraph c of this subdivision were paid in error, the same shall\nbe refunded at the rate of interest of six percent per annum. Payment of\nsuch balance of tax due, or the anticipation of such payment, shall not\naffect the determination of purses in the year in which such tax arises\nor in the year in which such payment is made nor shall such payment in\nany other manner be considered in any statutory or contractual\ncalculation of purse obligations.\n e. Written notice of the certification of the board pursuant to the\nprovisions of paragraph b of this subdivision shall be given by the\nboard to the applicable corporation by the dates therein specified. In\nlike manner, written notice that such certification will not be made\nshall be given by the board to the commissioner of taxation and finance\nand the applicable corporation by such dates.\n 4. The payment of the state tax imposed by this section shall be made\nto the commissioner of taxation and finance on the last business day of\neach month and shall cover taxes due for the period from the sixteenth\nday of the preceding month through the fifteenth day of the current\nmonth provided, however, that such payments required to be made on March\nthirty-first shall include all taxes due and accruing through the last\nfull week of racing in March of the current year or as otherwise\ndetermined by the commissioner of taxation and finance, and shall be\naccompanied by a report under oath, showing the total of all such\ncontributions, together with such other information as the commissioner\nof taxation and finance may require. A penalty of five per centum and\ninterest at the rate of one per centum per month from the date the\nreport is required to be filed to the date of payment of the tax shall\nbe payable in case any tax imposed by this section is not paid when due.\nIf the commissioner of taxation and finance determines that any moneys\nreceived under this subdivision were paid in error, the commissioner of\ntaxation and finance may cause the same to be refunded without interest\nout of any moneys collected thereunder, provided an application therefor\nis filed with the commissioner of taxation and finance within one year\nfrom the time the erroneous payment was made. Such taxes, interest and\npenalties when collected, after the deduction of refunds of taxes\nerroneously paid, shall be paid by the commissioner of taxation and\nfinance into the general fund of the state treasury.\n 5. No county, city, town, village or other political subdivision of\nthe state may impose, levy or collect a tax on admission fees or tickets\nof admission, on wagers made by patrons, in the form of purchases of\npari-mutuel tickets or upon such tickets, on pari-mutuel pools, on\nbreaks, on dividends or payments made to winning bettors, or on that\npart of the pari-mutuel pools or breaks to be retained by racing\ncorporations under this section, except as otherwise provided in this\nchapter.\n