Requires the licensing of franchised corporations, racing associations, off-track betting corporations and multi-jurisdictional account wager providers

Summary of provisions

Section 1 of the bill amends section 1001 of the racing, pari-mutuel wagering and breeding law to add a new definition for "account wager- ing", "account wagering licensee", dormant account", and "multi-juris- dictional account wagering provider".

Section 2 amends section 1002 of the racing, pari-mutuel wagering and breeding law to grant the Racing and wagering Board general jurisdic- tional powers over the new expanded account wagering activities that could be conducted under this legislation.

Section 3 amends section 1012 of the racing, pari-mutuel wagering and breeding law by revising the current law that governs telephone betting on account. This provision expands telephone betting to include the Internet, personal computers, cell phones and other forms of electronic communication. It also facilitates the ability of regional OTBs and racing associations to form partnerships to jointly offer account wager- ing programs.

This provision also establishes the procedures for establishing new account wagering programs by multi-jurisdictional account wagering providers. These businesses could be partnerships between in-state race producers and OTBs and out-of-state race producers. These businesses would be operated outside of New York, but licensed by another state. Such providers could accept New York race track events and encourage both in-state and out-of-state bettors to use such businesses. A portion of bets placed on such multi-state providers would be transferred to New York horse owners in purses and for New York breeding funds. This meas- ure could expand the utilization of New York's racing signal by out-of- state bettors and benefit the domestic industry by retaining a portion of the bets for New York's breeding funds, race tracks and horse owners.

In addition it makes acceptance of a wager without being licensed by the board punishable by a fine.

Section 4 amends section 503 of the racing , pari-mutuel wagering and breeding law to grant to regional OTBs the ability to enter into agree- ments to cooperatively sell and market New York racing products with domestic racing associations and enter into agreements with multi-juris- dictional account wagering providers.

Section 5 is the effective date of the bill.

Justification

This bill modernizes the telephone account wagering law to include the Internet, other personal computer systems, and cell phones. The bettor would still need to have an account to curtail underage gambling. Further, betting limits could be imposed based upon patron request.

As reported in the Senate Racing, Gaming & wagering committee Annual Reports issued in 2003, 2004, and 2005, New York's race tracks and OTBs need to more cooperatively offer and market New York racing products. This bill establishes a mechanism so that OTBs and race tracks can, in a cooperative manner, consolidate their telephone wagering account program. This has two economic benefits. First, consolidating telephone accounts can reduce overhead costs and reduce competition between regional OTBs for the same betting revenue. Second, more comprehensive offerings programs would be commercially more attractive to broadcast both within New York and exported to other jurisdictions (and hence be more profitable).

In addition this bill would make it a violation of law if an Out of State Advanced Deposit wagering (ADW)/internet outlet accepts a wager from any New York resident without being licensed by the Racing and wagering Board, subject to regulations, as well as pay the same statuto- ry payments to racing entities. The most likely case is that the current wagers (est to be +$500,000,000 a yr) would be redirected back to the Off-Track or on-track betting outlets. The entire racing industry (purs- es, breeders, OTB, tracks) would benefit immediately as well as the state from increased Pari-mutual taxes. All NY racetracks must continue to have complete unfettered rights to simulcast their signal to any out of state ADW outlet and no restrictions can be placed on this critical business arrangement.

New York's horse racing industry has not maximized its profits, and in NYRA's case has in fact lost substantial amounts of money over the past ten years. Legislation such as this bill would facilitate the ability to produce and market New York racing products. This, in turn, could increase horse industry profits so that OTBs would no longer be required to subsidize this business as it has done in the past. Consequently, OTBs could transfer more revenue to support local governments.

Legislative history

This is a new bill.

Fiscal implications

This legislation will increase revenues to the state by capturing more parimutuel taxes on these wagers which are currently untaxed.

Effective date

This act shall take effect immediately.