Establishes antitrust exemptions for certain horse racing agreements

BILL NUMBER:S3733

Title of bill

An act to amend the racing, pari-mutuel wagering and breeding law, in relation to antitrust exemptions for horse racing agreements

Purpose

To permit racetracks and other racing event producers or retailers to band together to establish agreements governing the scheduling of their races and to establish joint agreements involving the sale and purchase of broadcasting and simulcasting rights.

Summary of provisions

Section 1; Adds a new Racing & Wagering Law section 113-a to grant antitrust immunity to certain agreements among entities licensed by the State Gaming Commission to conduct wagering. These entities would be granted anti-trust immunity to develop agreements which coordinate the dates and times of their races and are also given immunity to enter into contracts involving the joint purchase or sale of their broadcasts, simulcasts, and electronic transmissions. All such agreements must be approved by the State Gaming Commission and the NYS Attorney General. The standard of review is that such agreements must protect the continued viability of the State's horse racing and agricultural industries.

Existing law

Such agreements may, under current law, violate the State and Federal anti-trust laws.

Justification

Attendance at racetracks and real betting handle in New York has been falling rapidly for the past 40 years. Racetracks need a better way of competing with other gambling and entertainment attractions. This bill allows such racing event producers and retailers to combine forces to make joint arrangements on both the scheduling and the times of their races, or to sell and/or purchase broadcast and simulcast rights. Making such joint cooperative arrangements may lead to better national market penetration of the State's racing products and help to reduce overhead costs and competition among New York's racing producers so that OTB's can effectively market each racetrack's products.

All agreements would need to be approved by the State Gaming Commission and the NYS Attorney General so that only those agreements that promote the State's legitimate interests in advancing our local horse racing and agricultural industries would be approved. This bill ensures that future joint agreements do not run afoul of the Federal and State anti-trust laws. It is arguable that some joint arrangements between competitive racetracks could pose antitrust questions. The need to preserve the State's ailing racetracks should, however, outweigh any limited anticompetitive effects of any joint marketing or horse race production agreements: The U.S. Supreme Court, under Parker v. Brown, 317 US 341 (1943) grants states the statutory authority to confer immunity for the Sherman Anti-trust Act for certain government

sanctioned activities. The second section of this bill is modeled on 15 U.S.C. Section 1291 which grants anti-trust immunity to broadcasts for certain professional leagues.

Legislative history

2010: S.6197 - Referred to Racing, Gaming & Wagering 2011: S.623 - This bill while similar to the current bill, has additional safeguards included to protect the public interest and reflects the concerns outlined in Veto Message 27 of S.623. 2012: S. 7170 (Klein) / A. 10310(Pretlow) 2014: S. 3026 - Referred and Committed to Finance/ A. 4497 - Referred to Racing and Wagering

Fiscal implications

None.

Local fiscal implications

None.

Effective date

180 days after it shall have become law.