Requires OTB corporations to submit copy of annual budget to racing and wagering board, and, upon finding of reasonable basis, conduct business and managerial audit

BILL NUMBER:S2717

Title of bill

An act to amend the racing, pari-mutuel wagering and breeding law, in relation to audits and budgets of off-track betting corporations

Purpose

To authorize the Racing and Wagering Board (Board), upon a finding based on a reasonable basis that an off-track betting corporation (OTB) is not complying with the law, to order an OTB to cause its business and mana- gerial practices to be audited. It also requires that OTB corporations submit copies of the corporation's annual budget to the Board no later than 20 days after approval by the corporation's board of directors.

Summary of provisions

Section 1: Amends section 524(1) of the Racing, Pari-Mutuel Wagering and Breeding Law to explicitly authorize the Board to direct an OTB corpo- ration to cause its business and managerial practices to be audited at the corporation's expense if there is a reasonable basis to believe that such corporation is in violation of the law.

Section 2: Section 524(4) is amended to add language requiring the submission of an approved OTB annual budget to the Board within 20 days of its adoption.

Section 3: Effective date.

Existing law

The Board has no explicit authorization to audit an OTB even if it appears that such OTB is in violation of the law.

Justification

OTB corporations are public benefit corporations which should be oper- ated in the public interest and in the most efficient manner possible. In addition, they should be operated in a manner consistent with the statutory requirements set forth in the Racing Law. Recent events have focused attention on the practices of these public benefit corporations and have demonstrated the need to require this type of managerial and business examination, when necessary, in order to provide a basis for assuring compliance with statutory objectives and generally accepted business management practices. Submission of already approved OTB annual budgets will also enhance the ability to monitor off-track betting corporation activities.

Many other State agencies such as the Insurance and Health Departments have the statutory authority to order an audit of a regulated party if that Department believes regulatory irregularities are occurring. It is only proper that OTBs should be monitored in a way that ensures that the maximum amount of money possible is going to localities and not to perpetuate inefficient OTB operations.

Legislative history

S.7018 of 2001 S.2088 of 2003/2004 S.1205 of 2005/2006

Fiscal implications

None.

Local fiscal implications

None.

Effective date

180 days after it shall have become law.