Provides for account wagering on simulcast horse races within and without the state

Summary of provisions

Section 1: Amends Racing & Wagering Law section 1001 to add new definitions for "account wagering", "account wagering licensee", "dormant account", and "multi-jurisdictional account wagering provider".

Section 2: Amends Racing & Wagering Law section 1002 to grant the State Gaming Commission general jurisdictional powers over the conduct the new expanded account wagering activities that could be conducted under this legislation.

Section 3: Amends Racing & Wagering Law section 1003(1) to add a licensing fee for out-of-state advanced deposit wagering platforms on wagers they take from New York Residents. These multi-jurisdictional account wagering providers will also remain subject to all simulcast laws and regulations.

Section 4: Amends Racing & Wagering Law section 1012 to revise 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 wagering programs.

This provision also establishes the procedures for establishing new account wagering programs by multi-jurisdictional account wagering providers by ensuring all bets taken by New York residents are included in the proper pari-mutuel pools to ensure payouts pursuant to regulated odds.

Section 5: Adds New Section 1012-A to the Racing & Wagering Law to set the framework for which the State and Racing Industry shall regulate and set a statutory fee structure on multi-jurisdictional account wagering providers.

Section 6: Amends Racing & Wagering Law Section 1017(b) to ensure a proper calculation of handle is counted toward a multi-jurisdicational wagering providers maintenance of effort payments

Section 7: Amends Racing & Wagering Law section 503 to grant to regional OTBs the ability to enter into agreements to cooperatively sell and market New York racing products with domestic racing

associations and enter into agreements with multi-jurisdictional account wagering providers.

Sections 8&9: Adds New Section 115-b of the Racing & Wagering Law and Amends 99-I of the Finance law to provide the New York Racing Industry participants, the State Gaming Commission, and the State to collect, disburse and receive credits from the statutory fees paid by multi-jurisdictional account wagering providers.

Section 10: Effective Date

Existing law

None.

Justification

In September 2012, the State Racing & Wagering Board (now Gaming Commission) issued a report that studied the economic impact that non-regulation of multi-jurisdictional account wagering providers had on the State's racing industry as well as the state's tax collections and revenues.The report indicated that roughly $200M was lost by not regulating multi-jurisdictional account wagering providers in a similar fashion to in-state wagering providers. More importantly, as more and more wagering is being done via the internet the report suggested that this number would continue to grow. Industry studies have shown that the current impact is much larger than $200M.

This bill regulates multi-jurisdictional account wagering providers on par with in-state providers who have and continue to pay both regulatory and statutory fees to the State and industry participants such as the horsemen and breeders.

Further, this bill modernizes the telephone account wagering law to include the Internet, other personal computer systems, and cell phones.

New York's horse racing industry has not maximized its profits, and in fact due to non-regulation of these multi-jurisdictional account wagering providers has lost profits as New York residents have consistently been attracted to these providers who are able to offer better promotions and offers, mostly from savings in not having to provide much needed revenues to the State and it's horsemen, breeders and other industry participants.

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 and by regulating multi-jurisdictional account wagering providers generate more revenue to support local governments and New York's growing racing industry.

Lastly, other States currently have either regulated and/or outright prohibited New York account wagering providers from accepting wagers from their in-state residents. Therefore, like other States, in enacting this legislation New York would be protecting its own racing industry.

Legislative history

New Bill

FISCAL IMPLICATIONS The former State Racing & Wagering Board (now Gaming Commission) estimated in September 2012 that nearly $200M in

revenue can be realized to the State from this regulation. Industry estimates are much higher

Local fiscal implications

None.

Effective date

This act shall take effect on January 1, 2014, and that the State Gaming Commission shall begin to license multi-jurisdictional account wagering providers commencing on October 1, 2013.