Provides for payments to licensed harness tracks by regional off-track betting corporations

Summary of specific provisions

Sections 1 and 2: Amend the Racing & Wagering Law section 1016 to reduce the "dark day" (the day when NYRA is not conducting a race meet) payment obligations applicable to off-track betting corporations (OTBs) from 1 1/2 percent of total daily pools on out-of-state thoroughbred races to 3/4 of 1 percent of such pools. In addition, it eliminates the requirement that a regional licensed harness track itself not display simulcasts of, or accept wagering upon, such out-of-state thoroughbred races in order to be eligible to receive, or share in the receipt of such payments from its regional OTB. The amended payment obligations would only apply during the first 120 days in each calendar year.

Section 3: Amends Racing & Wagering Law section 1017 to clarify that maintenance of effort payments by regional OTBs to the licensed harness tracks in their regions for calendar year 2009 are to be adjusted for any reduction in the number of racing programs conducted by any such track in that calendar year below the number of racing programs conducted by that track during the base year 2002. This section would also terminate such maintenance of effort obligations for calendar years subsequent to 2010. It also reduces the additional payment obligations of regional OTBs with respect to aggregate annual statewide handle on nighttime thoroughbred simulcast races during a phase-out period prior to full elimination thereof at the conclusion of the phase-out period.

Justification

Chapter 62 of the Laws of 2003 amended the Racing & wagering Law on the acceptance of wagering upon and the display of simulcasts of races run at out-of-state thoroughbred tracks. A maintenance of effort obligation was imposed on OTBs, measured by the level of commissions received by regional harness tracks in 2002 as derived from OTB wagering on out-of-state harness races conducted after 6 PM. The 2003 amendments also required OTBs to make supplemental payments to the harness industry to the extent that aggregate statewide handle on nighttime thoroughbred races exceeded $100 million.

Since the maintenance of effort and additional payment obligations were imposed 3 years ago, the net effect has been to reduce the revenue retained by OTBs which could have then been transferred to local governments. Despite the expanded wagering and simulcasting authorizations enacted in 2003, the incremental revenue increases from elimination of the nighttime thoroughbred simulcasting wagering restrictions have proven to be insufficient to replace the revenue transferred to the harness racing industry to hold them harmless for the OTB authorization to broadcast nighttime thoroughbred racing.

Since, nearly all harness tracks are operating video lottery games, this has helped to increase revenue for the harness tracks and purses.

However, requiring OTBs to continue the maintenance of effort and other payments are placing inequitable burdens on the regional OTB system. This bill would address the unintended inequities instituted in the 2003 law and enable OTBs to retain revenue which can be transferred to local governments.

Legislative history

2011: S/3564A held in Racing, Gaming and Wagering 2010: A.6916/S.2595 - Held in Racing, Gaming, and Wagering.

Fiscal implications

None.

Effective date

Immediate.