N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 318

§ 318. Disposition of on-track pari-mutuel pools; harness races. 1.\nExcept as otherwise provided by law, every association or corporation\nauthorized under this article to conduct pari-mutuel betting at a\nharness horse race meeting on races run thereat shall distribute all\nsums deposited in any pari-mutuel pool to the holders of winning tickets\ntherein, provided such tickets be presented for payment prior to April\nfirst of the year following the year of their purchase, less an amount\nthat shall be established and retained by such racing association or\ncorporation of between fourteen and twenty percent of the total deposits\nin pools resulting from regular bets, less sixteen to twenty-two percent\nof the total deposits in pools resulting from multiple bets, less twenty\nto thirty percent of the total deposits in pools resulting from exotic\nbets, and less twenty to thirty-six percent of the total betting\ndeposits in pools resulting from super exotic bets. The retention rate\nto be established is subject to the prior approval of the commission.\nSuch rate may not be changed more than once per calendar quarter to be\neffective on the first day of the calendar quarter.\n "Exotic bets" and "multiple bets" shall have the meanings set forth in\nsection five hundred nineteen of this chapter. "Super exotic bets" shall\nhave the meaning set forth in subdivision four of section three hundred\none of this article.\n a. Of the sum so retained from on-track pari-mutuel betting pools,\nsuch association or corporation authorized to operate in Westchester or\nNassau county: (i) shall pay to the commissioner of taxation and finance\nas a reasonable tax for the privilege of conducting pari-mutuel betting\nat races run at race meetings held by such corporation or association, a\ntax, which is hereby levied, in the applicable percentage set forth in\nsubdivision one of section one hundred thirty-six of this chapter as\nlimited by subdivision two of section one hundred thirty-six of this\nchapter. Any such association or corporation shall, for any twelve-month\nperiod beginning on April first in nineteen hundred ninety and any year\nthereafter, expend an amount equal to at least one-half of one percent\nof its on-track bets during the immediately preceding calendar year for\nenhancements consisting of capital improvements as defined by section\nthree hundred nineteen of this article, repairs to its physical plant,\nstructures, and equipment used in its racing or wagering operations, and\nfive special events at each track in each calendar year, not otherwise\nconducted in the ordinary course of business, the purpose of which shall\nbe to encourage, attract and promote track attendance and encourage new\nand continued patronage, which events shall be subject to the approval\nof the commission for purposes of this subdivision. In the determination\nof the amounts expended for such enhancements, the commission shall\nconsider the average of the two immediately preceding twelve-month\ncalendar periods.\n (ii) except as otherwise provided in this paragraph an amount equal to\nsix and eight-tenths percent of the total pool resulting from on-track\nregular bets, an amount equal to seven and ninety-five one hundredths\npercent of the total pool resulting from on-track multiple bets, an\namount equal to ten and one-half percent of the total pool resulting\nfrom on-track exotic bets, an amount equal to fifteen and one-half\npercent of the total daily pool resulting from on-track super exotic\nbets shall be used exclusively for purses, of which an amount of not\nless than ninety percent shall be used exclusively for purses for\novernight races conducted by such association or corporation. Such\namounts may be reduced upon an application approved by the commission\nand an agreement between the licensed harness racing corporation or\nassociation and the representative horsemen's organization as a\ncondition to reduce the amounts of retained percentages as provided for\nin this section. However, of the total amount available for purses, an\namount as determined by contractual obligations between an organization\nrepresenting at least fifty-one percent of the owners and trainers using\nthe facilities of such association or corporation for racing, training\nor stabling purposes and the association or corporation, shall be used\nfor the administrative purposes of said organization and for such\nwelfare and medical plans for regularly employed backstretch employees\nprincipally employed at the facilities of such corporation or\nassociation as provided by said organization, provided, however, that\neligibility for benefits in such plans shall not be conditioned upon\nmembership in such organization by any employee or employer thereof, and\nany denial of eligibility for benefits in such plans which, upon\ninvestigation and review by the commission, is determined to have\nresulted from a person, firm, association, corporation or organization\nknowingly aiding in or permitting eligibility for benefits being\nconditioned upon membership in such organization shall subject such\norganization to the penalties imposed under sections three hundred ten\nand three hundred twenty-one of this article but the ratio between the\namounts actually expended for such welfare and medical plans and the\ncost actually incurred in administering such welfare and medical plans\nfor fiscal years of such corporation or association, on or after July\ntwenty-fourth, nineteen hundred eighty-one, shall not be less than the\nratio between such amounts actually expended and such costs actually\nincurred for the fiscal year immediately prior to such date. Such\norganization shall annually on or before July first certify to the\ncommission that it represents at least fifty-one percent of such owners\nand trainers and provide copies of such certification to such\nassociation or corporation. Any other organization claiming to represent\nat least fifty-one percent of such owners and trainers may file a\nchallenge with the commission within fifteen days of such original\ncertification. The commission shall examine such claim and may undertake\nstudies and conduct hearings to determine the validity of such claim.\nWithin sixty days of receiving such challenge and based upon the\nfindings of such studies and hearings, the commission shall render a\ndecision on the validity of such claim and advise such organizations and\nassociation or corporation of its determination. Upon receipt of such\noriginal certification by such organization, the association or\ncorporation shall make such payments to said organization and, in the\nevent of a challenge brought to any other organization, such payments\nshall continue to be made until such time as the commission renders its\ndecision on such challenge; and\n (iii) the balance of the retained percentage of such pools may be held\nby such association or corporation for its own use and purposes except\nas provided in paragraph c of this subdivision and in subdivision four\nof section three hundred one of this article, provided, however, that\nthe commission shall report annually, on or before July first, to the\ndirector of the budget, the chair of the senate finance committee and\nthe chair of the assembly ways and means committee the extent to which\nsuch corporations and associations used such retained percentages for\noperations, maintenance, capital improvements, advertising and\npromotion, administration and general overhead and evaluate the\neffectiveness and make recommendations with respect to the application\nof the rates of taxation as provided for in subparagraph (i) of this\nparagraph in accomplishing the objectives stated therein. Such report\nshall also specify the amounts of such retained percentages used for\ninvestments not directly related to racing activities and such amounts\nused to declare dividends or other profit distributions, additions to\ncapital stock, its sale and transfer and additions to retained earnings.\nSuch reports shall also include an analysis of any such agreements or\nproposals to conduct or otherwise expand wagers authorized under article\nten of this chapter and present its conclusions with respect to the\nconduct of such wagering, the nature of such proposals and agreements,\nand recommendations to ensure the future maintenance of the intent of\nthis article and article ten of this chapter.\n b. (i) Of the sums retained by any other licensed harness racing\nassociation or corporation other than those described in paragraph a of\nthis subdivision, such association or corporation shall pay to the\ncommissioner of taxation and finance as a reasonable tax for the\nprivilege of conducting pari-mutuel betting at races run at race\nmeetings held by such corporation or association, a tax, which is hereby\nlevied, in the applicable percentage set forth in subdivision one of\nsection one hundred thirty-six of this chapter, as limited by\nsubdivision two of section one hundred thirty-six of this chapter. Any\nsuch racing association or corporation shall for any twelve-month period\nbeginning on April first in nineteen hundred ninety and any year\nthereafter, expend an amount equal to at least one-half of one percent\nof its on-track bets during the immediately preceding calendar year for\nenhancements consisting of capital improvements as defined by section\nthree hundred nineteen of this article, repairs to its physical plant,\nstructures, and equipment used in its racing or wagering operations, not\notherwise conducted in the ordinary course of business, the purpose of\nwhich shall be to encourage, attract and promote track attendance and\nencourage new and continued patronage, which events shall be subject to\nthe approval of the commission for purposes of this subdivision. In this\nregard, expenditures by a county agricultural society pursuant to\nsection three hundred nineteen of this article shall be credited to the\napplicable harness racing association or corporation for this purpose.\nIn the determination of the amounts expended for such enhancements, the\ncommission may consider the immediately preceding twelve-month calendar\nperiod or the average of the two immediately preceding twelve-month\ncalendar periods. The commission shall report annually, before July\nfirst, to the director of the budget, the chair of the senate finance\ncommittee and the chair of the assembly ways and means committee the\nextent to which such corporations and associations used such retained\npercentages for operations, maintenance, capital improvements,\nadvertising and promotion, administration and general overhead and\nevaluate the effectiveness and make recommendations with respect to the\napplication of the rates of taxation as provided for in this\nsubparagraph in accomplishing the objectives stated therein. Such report\nshall also specify the amounts of such retained percentages used for\ninvestments not directly related to racing activities and such amounts\nused to declare dividends or other profit distributions, additions to\ncapital stock, its sale and transfer and additions to retained earnings.\nSuch reports shall also include an analysis of any such agreements or\nproposals to conduct or otherwise expand wagers authorized under article\nten of this chapter and present its conclusions with respect to the\nconduct of such wagering, the nature of such proposals and agreements,\nand recommendations to ensure the future maintenance of the intent of\nthis article.\n (ii) Of the sums retained by such association or corporation, an\namount equal to one and three-quarters percent of the total pool\nresulting from on-track regular, multiple and exotic bets shall be used\nexclusively for the purpose of increasing purses awarded in overnight\nraces conducted by such association or corporation. Such amounts shall\nbe in addition to purse moneys otherwise provided pursuant to existing\ncontractual obligations. In this regard an amount equal to twelve\npercent of the total bets in super exotic pools shall be used for purses\nin lieu of any such contractual obligations that might otherwise apply\nto purses to be awarded on super exotic bets. Any portion of such amount\nnot so used during any year shall be so used during the following year.\nIn addition to the amounts required in this paragraph, fifty percent of\nall additional sums retained, as a result of tax reductions provided in\nthis section after September first, nineteen hundred ninety-four to\nqualified licensed harness racing associations, shall be used\nexclusively for purposes of increasing purses awarded in overnight races\nconducted by such association or corporation, provided that such\nassociation or corporation has entered into a written agreement with its\nrepresentative horsemen's organization on and after September first,\nnineteen hundred ninety-four. Notwithstanding anything contained herein\nto the contrary, in a harness special betting district the amount to be\nused for purses or the methodology for calculating the amount to be used\nfor purses may be specified in a written contract between a harness\nracing association or corporation and its representative horsemen's\nassociation. The balance of the retained percentage of such pool may be\nheld by such corporation or association for its own use and purposes.\n (iii) The commission shall as a condition of racing require an\nassociation authorized to operate in areas other than Westchester or\nNassau county to withhold one percent of all purses and to pay such sum\nto the horsemen's organization representing the owners and trainers\nusing the facilities of such association that had a contract with the\nassociation governing the conditions of racing on January first,\nnineteen hundred ninety-two, as determined by the commission.\n Any other horsemen's organization may apply to the commission to be\napproved as the qualified organization to receive payment of the one\npercent of all purses by submitting to the commission proof of both,\nthat (i) such organization represents more than fifty-one percent of all\nthe owners and trainers using the same facilities and (ii) the\nhorsemen's organization previously approved as qualified by the\ncommission does not represent fifty-one percent of all the owners and\ntrainers using the same facilities. If the commission is satisfied that\nthe documentation submitted with the application of any other horsemen's\norganization is conclusive with respect to subparagraphs (i) and (ii) of\nthis paragraph, the commission may approve the applicant as the\nqualified recipient organization.\n In the best interests of racing, upon receipt of such an application,\nthe commission may direct the payments to the previously qualified\nhorsemen's organization to continue uninterrupted, or it may direct the\npayments to be withheld and placed in interest-bearing accounts for a\nperiod not to exceed ninety days, during which time the commission shall\nreview and approve or disapprove the application. Funds held in such\nmanner shall be paid to the organization approved by the commission. In\nno event shall the commission accept more than one such application in\nany calendar year from the same horsemen's organization.\n The funds authorized to be paid by the commission are to be used\nexclusively for the benefit of those horsemen racing in New York state\nthrough the administrative purposes of such qualified organization,\nbenevolent activities on behalf of backstretch employees, and for the\npromotion of equine research.\n c. Of the sums retained by any harness racing association or\ncorporation, an amount equal to one percent of the total pools resulting\nfrom on-track regular, multiple and exotic bets and an amount equal to\nthree percent of the total pools resulting from on-track super exotic\nbets shall be paid to the agriculture and New York state horse breeding\ndevelopment fund.\n d. Every harness racing association or corporation shall pay to the\ncommission as a regulatory fee, which fee is hereby levied, six-tenths\nof one percent of the total daily on-track pari-mutuel pools of such\nassociation or corporation.\n 2. The state tax levied adjusted for any credits in this section shall\nbe paid to the commissioner of taxation and finance, on the last\nbusiness day of each month and shall cover taxes due for the period from\nthe sixteenth day of the preceding month through the fifteenth day of\nthe current month provided, however, that such payments required to be\nmade on March thirty-first shall include all taxes due and accruing\nthrough the last full week of racing in March of the current year or as\notherwise determined by the commissioner, and shall be accompanied by a\nreport under oath showing the total of all such contributions together\nwith such other information as the commissioner may require. A penalty\nof five percent and interest at the rate of one percent per month from\nthe date the report is required to be filed to the date of payment of\nthe tax shall be payable in case any tax imposed by this section is not\npaid when due. If the commissioner determines that any moneys received\nunder this section were paid in error, the commissioner may cause the\nsame to be refunded without interest out of any moneys collected\nthereunder, provided an application therefor is filed with it within one\nyear from the time the erroneous payment was made. Such taxes, interest\nand penalties when collected, after the deduction of refunds of taxes\nerroneously paid, shall be paid by the commissioner into the general\nfund of the state treasury.\n 3. Except as otherwise provided by law no county, city, town, village\nor other political subdivision of the state may impose, levy or collect\na tax on admission fees or tax on admission, on bets made by patrons in\nthe form of purchases of pari-mutuel tickets or upon such tickets, on\npari-mutuel pools, on breaks, on dividends or payments made to winning\nbettors, or on that part of the pari-mutuel pools or breaks to be\nretained by harness horse racing associations or corporations under this\nsection.\n 4. Notwithstanding any other provisions of this chapter, there shall\nbe no pari-mutuel tax imposed upon the compensation received by any\nharness racing association or corporation in consideration for (a)\npermission to have wagering conducted outside this state on races run by\nsuch association or corporation, and (b) the simulcasting outside this\nstate of races run by such association or corporation, except for such\npermission or such simulcasting as may be granted to an off-track\nbetting operator in the state of Connecticut by a harness racing\nassociation or corporation located in Nassau or Westchester county. Any\nsuch association or corporation so simulcasting to an off-track betting\noperator in the state of Connecticut shall pay to the New York\ncommissioner of taxation and finance a reasonable tax for such\npermission and privilege for such simulcasting, which is hereby levied,\nat the following rates: one and one-tenth percent of total daily regular\nand multiple bets; three and one-tenth percent of total daily exotic\nbets; and three and one-half percent of total daily super exotic bets.\n 5. Maintenance of pari-mutuel racing activity. For any calendar year\ncommencing on or after January first, nineteen hundred eighty-nine, a\nharness racing association or corporation shall not conduct fewer\npari-mutuel programs and pari-mutuel races at its facilities than ninety\npercent of the programs and races so conducted during nineteen hundred\neighty-five or during nineteen hundred eighty-six, whichever is less,\nunless such association or corporation demonstrates to the satisfaction\nof the commission good cause due to factors beyond the control of such\nassociation or corporation or because the commission finds that it would\nbe uneconomical or impractical for such association or corporation to be\nassigned or conduct the prescribed number.\n 6. Notwithstanding any provision of law to the contrary, in the\nabsence of a contract between the licensed harness racing corporation or\nassociation and the representative horsemen's organization, the\npreviously negotiated contract related to welfare, medical, or\nretirement plans, including any associated costs, provided by the\nhorsemen's organization to participants in racing at the licensed\nharness racing facility shall be automatically extended for a one-time\nperiod of twelve months commencing from the date that the previously\nnegotiated contract expired. The amounts shall be paid monthly from the\nhorsemen's gross purse enhancement amount from video lottery gaming.\n