§ 318 — Disposition of on-track pari-mutuel pools; harness races

§ 318. Disposition of on-track pari-mutuel pools; harness races. 1.\nExcept as otherwise provided by law, every association or corporation\nauthorized under this article to conduct pari-mutuel betting at a\nharness horse race meeting on races run thereat shall distribute all\nsums deposited in any pari-mutuel pool to the holders of winning tickets\ntherein, provided such tickets be presented for payment prior to April\nfirst of the year following the year of their purchase, less an amount\nthat shall be established and retained by such racing association or\ncorporation of between fourteen and twenty percent of the total deposits\nin pools resulting from regular bets, less sixteen to twenty-two percent\nof the total deposits in pools resulting from multiple bets, less twenty\nto thirty percent of the total deposits in pools resulting from exotic\nbets, and less twenty to thirty-six percent of the total betting\ndeposits in pools resulting from super exotic bets, plus the breaks. The\nretention rate to be established is subject to the prior approval of the\ncommission. Such rate may not be changed more than once per calendar\nquarter to be effective on the first day of the calendar quarter.\n "Exotic bets" and "multiple bets" shall have the meanings set forth in\nsection five hundred nineteen of this chapter, "super exotic bets" shall\nhave the meaning set forth in subdivision four of section three hundred\none of this article and "the breaks" are hereby defined as the odd cents\nover any multiple of ten for regular and multiple bets, or for exotic\nbets, over any multiple of fifty, or for super exotic bets, over any\nmultiple of one hundred calculated on the basis of one dollar and\notherwise payable to a patron, provided however, that effective after\nOctober fifteenth, nineteen hundred ninety-four breaks are hereby\ndefined as the odd cents over any multiple of five for payoffs greater\nthan one dollar five cents but less than five dollars, over any multiple\nof ten for payoffs greater than five dollars but less than twenty-five\ndollars, over any multiple of twenty-five for payoffs greater than\ntwenty-five dollars but less than two hundred fifty dollars, or over any\nmultiple of fifty for payoffs over two hundred fifty dollars.\n a. Of the sum so retained from on-track pari-mutuel betting pools,\nsuch association or corporation authorized to operate in Westchester or\nNassau county: (i) shall pay to the commissioner of taxation and finance\nas a reasonable tax for the privilege of conducting pari-mutuel betting\nat races run at race meetings held by such corporation or association, a\ntax, which is hereby levied, at the rate of one-half of one percent of\nall wagers from total daily on-track pools. Such association or\ncorporation shall receive credit as a reduction of the daily tax by the\nstate for the privilege of conducting pari-mutuel betting of amounts\nequal to four-tenths percent of total daily pools resulting from the\nsimulcast of such association's or corporation's races to licensed\nfacilities operated by regional off-track betting corporations in\naccordance with section one thousand eight of this chapter; provided,\nhowever, that in no event shall total daily credit exceed four-tenths\npercent of the total daily pool of such association or corporation. An\namount equal to fifty percent of such credit shall be used to increase\npurses; provided, however, that for any twelve-month period beginning on\nApril first in nineteen hundred ninety and any year thereafter, each of\nthe applicable rates set forth above shall be increased by one-half of\none percent on all on-track bets of any such racing association or\ncorporation that did not expend an amount equal to at least one-half of\none percent of its on-track bets during the immediately preceding\ncalendar year for enhancements consisting of capital improvements as\ndefined by section three hundred nineteen of this article, repairs to\nits physical plant, structures, and equipment used in its racing or\nwagering operations, as certified by the commission to the commissioner\nof taxation and finance no later than eighty days after the close of\nsuch calendar year, and five special events at each track in each\ncalendar year, not otherwise conducted in the ordinary course of\nbusiness, the purpose of which shall be to encourage, attract and\npromote track attendance and encourage new and continued patronage,\nwhich events shall be subject to the approval of the commission for\npurposes of this subdivision. In the determination of the amounts\nexpended for such enhancements, the commission shall consider the\naverage of the two immediately preceding twelve-month calendar periods.\nNotwithstanding the foregoing no increase shall be imposed unless such\ncorporation or association has been afforded notice and opportunity to\nbe heard. The commission shall promulgate rules and regulations to\nimplement the provisions relating to notice and hearing.\n (ii) except as otherwise provided in this paragraph an amount equal to\nsix and eight-tenths percent of the total pool resulting from on-track\nregular bets, an amount equal to seven and ninety-five one hundredths\npercent of the total pool resulting from on-track multiple bets, an\namount equal to ten and one-half percent of the total pool resulting\nfrom on-track exotic bets, an amount equal to fifteen and one-half\npercent of the total daily pool resulting from on-track super exotic\nbets shall be used exclusively for purses, of which an amount of not\nless than ninety percent shall be used exclusively for purses for\novernight races conducted by such association or corporation. Such\namounts may be reduced upon an application approved by the commission\nand an agreement between the licensed harness racing corporation or\nassociation and the representative horsemen's organization as a\ncondition to reduce the amounts of retained percentages as provided for\nin this section. However, of the total amount available for purses, an\namount as determined by contractual obligations between an organization\nrepresenting at least fifty-one percent of the owners and trainers using\nthe facilities of such association or corporation for racing, training\nor stabling purposes and the association or corporation, shall be used\nfor the administrative purposes of said organization and for such\nwelfare and medical plans for regularly employed backstretch employees\nprincipally employed at the facilities of such corporation or\nassociation as provided by said organization, provided, however, that\neligibility for benefits in such plans shall not be conditioned upon\nmembership in such organization by any employee or employer thereof, and\nany denial of eligibility for benefits in such plans which, upon\ninvestigation and review by the commission, is determined to have\nresulted from a person, firm, association, corporation or organization\nknowingly aiding in or permitting eligibility for benefits being\nconditioned upon membership in such organization shall subject such\norganization to the penalties imposed under sections three hundred ten\nand three hundred twenty-one of this article but the ratio between the\namounts actually expended for such welfare and medical plans and the\ncost actually incurred in administering such welfare and medical plans\nfor fiscal years of such corporation or association, on or after July\ntwenty-fourth, nineteen hundred eighty-one, shall not be less than the\nratio between such amounts actually expended and such costs actually\nincurred for the fiscal year immediately prior to such date. Such\norganization shall annually on or before July first certify to the\ncommission that it represents at least fifty-one percent of such owners\nand trainers and provide copies of such certification to such\nassociation or corporation. Any other organization claiming to represent\nat least fifty-one percent of such owners and trainers may file a\nchallenge with the commission within fifteen days of such original\ncertification. The commission shall examine such claim and may undertake\nstudies and conduct hearings to determine the validity of such claim.\nWithin sixty days of receiving such challenge and based upon the\nfindings of such studies and hearings, the commission shall render a\ndecision on the validity of such claim and advise such organizations and\nassociation or corporation of its determination. Upon receipt of such\noriginal certification by such organization, the association or\ncorporation shall make such payments to said organization and, in the\nevent of a challenge brought to any other organization, such payments\nshall continue to be made until such time as the commission renders its\ndecision on such challenge; and\n (iii) the balance of the retained percentage of such pools and the\nbalance of the breaks may be held by such association or corporation for\nits own use and purposes except as provided in paragraph c of this\nsubdivision and in subdivision four of section three hundred one of this\narticle, provided, however, that the commission shall report annually,\non or before July first, to the director of the budget, the chair of the\nsenate finance committee and the chair of the assembly ways and means\ncommittee the extent to which such corporations and associations used\nsuch retained percentages and breakage for operations, maintenance,\ncapital improvements, advertising and promotion, administration and\ngeneral overhead and evaluate the effectiveness and make recommendations\nwith respect to the application of the reduced rates of taxation as\nprovided for in subparagraph (i) of this paragraph in accomplishing the\nobjectives stated therein. Such report shall also specify the amounts of\nsuch retained percentages and breakage used for investments not directly\nrelated to racing activities and such amounts used to declare dividends\nor other profit distributions, additions to capital stock, its sale and\ntransfer and additions to retained earnings. Such reports shall also\ninclude an analysis of any such agreements or proposals to conduct or\notherwise expand wagers authorized under article ten of this chapter and\npresent its conclusions with respect to the conduct of such wagering,\nthe nature of such proposals and agreements, and recommendations to\nensure the future maintenance of the intent of this article and article\nten of this chapter.\n b. (i) Of the sums retained by any other licensed harness racing\nassociation or corporation other than those described in paragraph a of\nthis subdivision, the applicable tax rates for regular bets shall be\nsix-tenths of one percent; for multiple bets shall be one and one-tenth\npercent; for exotic bets shall be five and six-tenths percent and for\nsuper exotic bets shall be seven percent, plus fifty percent of the\nbreaks. Effective September first, nineteen hundred ninety-four, for all\nlicensed harness racing associations and corporations that have entered\ninto a contract with their representative horsemen's association on and\nafter such date, such tax shall be one-half of one percent of all\nwagers, plus fifty percent of the breaks.\n Provided, however, that for any twelve-month period beginning on April\nfirst in nineteen hundred ninety and any year thereafter, each of the\napplicable rates set forth above shall be increased by one-quarter of\none percent on all on-track bets of any such racing association or\ncorporation that did not expend an amount equal to at least one-half of\none percent of its on-track bets during the immediately preceding\ncalendar year for enhancements consisting of capital improvements as\ndefined by section three hundred nineteen of this article, repairs to\nits physical plant, structures, and equipment used in its racing or\nwagering operations, as certified by the commission to the commissioner\nof taxation and finance no later than eighty days after the close of\nsuch calendar year, and five special events at each track in each\ncalendar year, not otherwise conducted in the ordinary course of\nbusiness, the purpose of which shall be to encourage, attract and\npromote track attendance and encourage new and continued patronage,\nwhich events shall be subject to the approval of the commission for\npurposes of this subdivision. In this regard, expenditures by a county\nagricultural society pursuant to section three hundred nineteen of this\narticle shall be credited to the applicable harness racing association\nor corporation for this purpose. In the determination of the amounts\nexpended for such enhancements, the commission may consider the\nimmediately preceding twelve-month calendar period or the average of the\ntwo immediately preceding twelve-month calendar periods. Notwithstanding\nthe foregoing no increase shall be imposed unless such corporation or\nassociation has been afforded a notice and opportunity to be heard. The\ncommission shall promulgate rules and regulations to implement the\nprovisions relating to notice and hearing.\n Such associations or corporations shall receive credit as a reduction\nof the daily tax by the state for the privilege of conducting\npari-mutuel betting of amounts equal to four-tenths percent of total\ndaily pools resulting from the simulcast of such association's or\ncorporation's races to licensed facilities operated by regional\noff-track betting corporations in accordance with section one thousand\neight of this chapter, provided however, that in no event shall the\ntotal daily credit exceed four-tenths percent of the total daily pool of\nsuch association or corporation which tax is hereby levied and shall be\npaid to the commissioner of taxation and finance as a reasonable tax\nimposed by the state for the privilege of conducting pari-mutuel betting\nat races run at race meetings held by such association or corporation.\nThe commission shall report annually, before July first, to the director\nof the budget, the chair of the senate finance committee and the chair\nof the assembly ways and means committee the extent to which such\ncorporations and associations used such retained percentages and\nbreakage for operations, maintenance, capital improvements, advertising\nand promotion, administration and general overhead and evaluate the\neffectiveness and make recommendations with respect to the application\nof the reduced rates of taxation as provided for in this subparagraph in\naccomplishing the objectives stated therein. Such report shall also\nspecify the amounts of such retained percentages and breakage used for\ninvestments not directly related to racing activities and such amounts\nused to declare dividends or other profit distributions, additions to\ncapital stock, its sale and transfer and additions to retained earnings.\nSuch reports shall also include an analysis of any such agreements or\nproposals to conduct or otherwise expand wagers authorized under article\nten of this chapter and present its conclusions with respect to the\nconduct of such wagering, the nature of such proposals and agreements,\nand recommendations to ensure the future maintenance of the intent of\nthis article.\n (ii) Of the sums retained by such association or corporation, an\namount equal to one and three-quarters percent of the total pool\nresulting from on-track regular, multiple and exotic bets shall be used\nexclusively for the purpose of increasing purses awarded in overnight\nraces conducted by such association or corporation. Such amounts shall\nbe in addition to purse moneys otherwise provided pursuant to existing\ncontractual obligations. In this regard an amount equal to twelve\npercent of the total bets in super exotic pools shall be used for purses\nin lieu of any such contractual obligations that might otherwise apply\nto purses to be awarded on super exotic bets. Any portion of such amount\nnot so used during any year shall be so used during the following year,\nfailing which such portion shall be payable to the commissioner of\ntaxation and finance as additional tax. In addition to the amounts\nrequired in this paragraph, fifty percent of all additional sums\nretained, as a result of tax reductions provided in this section after\nSeptember first, nineteen hundred ninety-four to qualified licensed\nharness racing associations, shall be used exclusively for purposes of\nincreasing purses awarded in overnight races conducted by such\nassociation or corporation, provided that such association or\ncorporation has entered into a written agreement with its representative\nhorsemen's organization on and after September first, nineteen hundred\nninety-four. Notwithstanding anything contained herein to the contrary,\nin a harness special betting district the amount to be used for purses\nor the methodology for calculating the amount to be used for purses may\nbe specified in a written contract between a harness racing association\nor corporation and its representative horsemen's association. The\nbalance of the retained percentage of such pool may be held by such\ncorporation or association for its own use and purposes.\n (iii) Of the amount of the breaks from on-track regular, multiple,\nexotic and super exotic bets such association or corporation shall pay\nfifty percent to the commissioner of taxation and finance. The balance\nof such breaks may be held by such association or corporation for its\nown use and purposes.\n (iv) The commission shall as a condition of racing require an\nassociation authorized to operate in areas other than Westchester or\nNassau county to withhold one percent of all purses and to pay such sum\nto the horsemen's organization representing the owners and trainers\nusing the facilities of such association which had a contract with the\nassociation governing the conditions of racing on January first,\nnineteen hundred ninety-two, as determined by the commission.\n Any other horsemen's organization may apply to the commission to be\napproved as the qualified organization to receive payment of the one\npercent of all purses by submitting to the commission proof of both,\nthat (i) such organization represents more than fifty-one percent of all\nthe owners and trainers using the same facilities and (ii) the\nhorsemen's organization previously approved as qualified by the\ncommission does not represent fifty-one percent of all the owners and\ntrainers using the same facilities. If the commission is satisfied that\nthe documentation submitted with the application of any other horsemen's\norganization is conclusive with respect to subparagraphs (i) and (ii) of\nthis paragraph, the commission may approve the applicant as the\nqualified recipient organization.\n In the best interests of racing, upon receipt of such an application,\nthe commission may direct the payments to the previously qualified\nhorsemen's organization to continue uninterrupted, or it may direct the\npayments to be withheld and placed in interest-bearing accounts for a\nperiod not to exceed ninety days, during which time the commission shall\nreview and approve or disapprove the application. Funds held in such\nmanner shall be paid to the organization approved by the commission. In\nno event shall the commission accept more than one such application in\nany calendar year from the same horsemen's organization.\n The funds authorized to be paid by the commission are to be used\nexclusively for the benefit of those horsemen racing in New York state\nthrough the administrative purposes of such qualified organization,\nbenevolent activities on behalf of backstretch employees, and for the\npromotion of equine research.\n c. Of the sums retained by any harness racing association or\ncorporation, an amount equal to one percent of the total pools resulting\nfrom on-track regular, multiple and exotic bets and an amount equal to\nthree percent of the total pools resulting from on-track super exotic\nbets shall be paid to the agriculture and New York state horse breeding\ndevelopment fund.\n d. Every harness racing association or corporation shall pay to the\ncommission as a regulatory fee, which fee is hereby levied, six-tenths\nof one percent of the total daily on-track pari-mutuel pools of such\nassociation or corporation.\n 2. The state tax levied adjusted for any credits in this section shall\nbe paid to the commissioner of taxation and finance, on the last\nbusiness day of each month and shall cover taxes due for the period from\nthe sixteenth day of the preceding month through the fifteenth day of\nthe current month provided, however, that such payments required to be\nmade on March thirty-first shall include all taxes due and accruing\nthrough the last full week of racing in March of the current year or as\notherwise determined by the commissioner, and shall be accompanied by a\nreport under oath showing the total of all such contributions together\nwith such other information as the commissioner may require. A penalty\nof five percent and interest at the rate of one percent per month from\nthe date the report is required to be filed to the date of payment of\nthe tax shall be payable in case any tax imposed by this section is not\npaid when due. If the commissioner determines that any moneys received\nunder this section were paid in error, the commissioner may cause the\nsame to be refunded without interest out of any moneys collected\nthereunder, provided an application therefor is filed with it within one\nyear from the time the erroneous payment was made. Such taxes, interest\nand penalties when collected, after the deduction of refunds of taxes\nerroneously paid, shall be paid by the commissioner into the general\nfund of the state treasury.\n 3. Except as otherwise provided by law no county, city, town, village\nor other political subdivision of the state may impose, levy or collect\na tax on admission fees or tax on admission, on bets made by patrons in\nthe form of purchases of pari-mutuel tickets or upon such tickets, on\npari-mutuel pools, on breaks, on dividends or payments made to winning\nbettors, or on that part of the pari-mutuel pools or breaks to be\nretained by harness horse racing associations or corporations under this\nsection.\n 4. Notwithstanding any other provisions of this chapter, there shall\nbe no pari-mutuel tax imposed upon the compensation received by any\nharness racing association or corporation in consideration for (a)\npermission to have wagering conducted outside this state on races run by\nsuch association or corporation, and (b) the simulcasting outside this\nstate of races run by such association or corporation, except for such\npermission or such simulcasting as may be granted to an off-track\nbetting operator in the state of Connecticut by a harness racing\nassociation or corporation located in Nassau or Westchester county. Any\nsuch association or corporation so simulcasting to an off-track betting\noperator in the state of Connecticut shall pay to the New York\ncommissioner of taxation and finance a reasonable tax for such\npermission and privilege for such simulcasting, which is hereby levied,\nat the following rates: one and one-tenth per centum of total daily\nregular and multiple bets; three and one-tenth per centum of total daily\nexotic bets; and three and one-half per centum of total daily super\nexotic bets.\n 5. Tax rates in event of failure to maintain pari-mutuel racing\nactivity. a. Notwithstanding any other provision of this section to the\ncontrary, for any calendar year commencing on or after January first,\nnineteen hundred eighty-nine, in which a harness racing association or\ncorporation does not conduct a minimum number of pari-mutuel programs\nand pari-mutuel races at its facilities equal to at least ninety percent\nof the programs and races so conducted during nineteen hundred\neighty-five or during nineteen hundred eighty-six, whichever is less, in\nlieu of the tax rates set forth in subdivision one of this section the\napplicable pari-mutuel tax rates for such association or corporation\nwith respect to on-track pari-mutuel betting pools during such year\nshall be as follows:\n (i) For such an association or corporation authorized to operate in\nWestchester or Nassau county: of total daily on-track pools resulting\nfrom regular bets, three and seventy-five hundredths percent of the\nfirst five hundred thousand dollars comprising such pools and five and\ntwenty-five hundredths percent of the amount in excess of five hundred\nthousand dollars, plus fifty percent of the breaks; of total daily\non-track pools resulting from multiple bets, four and seventy-five\nhundredths percent of the first three hundred thousand dollars\ncomprising such pools and six and twenty-five hundredths percent of the\namount in excess of three hundred thousand dollars, plus fifty percent\nof the breaks; of total daily on-track pools resulting from exotic bets,\neight and seventy-five hundredths percent of the first two hundred\nthousand dollars comprising such pools, and ten and twenty-five\nhundredths percent of the amount in excess of two hundred thousand\ndollars, plus fifty percent of the breaks; and of total daily on-track\npools resulting from super exotic bets, seven percent, plus fifty\npercent of the breaks; and\n (ii) For any harness racing association or corporation other than one\ndescribed in subparagraph (i) of this paragraph: of total daily on-track\npools resulting from regular bets, one and one-half percent, plus fifty\npercent of the breaks; of total daily on-track pools resulting from\nmultiple bets, two percent, plus fifty percent of the breaks; of total\ndaily on-track pools resulting from exotic bets, six and one-half\npercent, plus fifty percent of the breaks; and of total daily on-track\npools resulting from super exotic bets, seven percent, plus fifty\npercent of the breaks.\n b. The provisions of this subdivision shall not apply to an\nassociation or corporation for any calendar year for which the\ncommission certifies to the commissioner of taxation and finance:\n (i) by December fifteenth of the year immediately preceding such year,\nthat such association or corporation has been assigned for such year,\nfrom the programs and races it requested, at least the minimum number of\nprograms and races prescribed in paragraph a of this subdivision, or, if\nfewer than such number were assigned for such year, that the assignment\nof such lesser number was for good cause due to factors beyond the\ncontrol of such association or corporation or because the commission\nfound that it would be uneconomical or impractical for such association\nor corporation to be assigned the prescribed number; and\n (ii) by January thirty-first of the year immediately subsequent to\nsuch year, that such association or corporation did conduct such number\nof programs and races as were certified pursuant to subparagraph (i) of\nthis paragraph, or if it failed to conduct such number that such failure\nwas for good cause due to factors beyond its control or because the\ncommission found it uneconomical or impractical for such association or\ncorporation to conduct such a number.\n c. For any calendar year for which the commission does not certify\npursuant to the provisions of subparagraph (i) of paragraph b of this\nsubdivision with respect to an association or corporation, the tax\nimposed by this section shall be computed by substituting the provisions\nof paragraph a of this subdivision for the provisions of paragraph a or\nb, whichever is applicable, of subdivision one of this section and shall\npay the tax so computed to the commissioner of taxation and finance. In\nsuch computation and payment, all other provisions of this section shall\napply as if the provisions of this paragraph and of paragraph a of this\nsubdivision had been incorporated in whole in paragraph a or b,\nwhichever is applicable, of subdivision one of this section.\n d. For any calendar year for which the commission does not certify\npursuant to the provisions of subparagraph (ii) of paragraph b of this\nsubdivision with respect to an association or corporation, the tax\nrequired to be paid hereunder for such year shall be equal to the\ndifference between the tax imposed pursuant to the provisions of\nparagraph a of this subdivision and the tax imposed pursuant to the\nprovisions of paragraph a or b, whichever is applicable, of subdivision\none of this section, less one-half of such difference in recognition of\npurses that were required to be paid, plus an additional amount equal to\nten percent of such tax in the event of a willful failure to comply with\nthe provisions of subparagraph (ii) of paragraph b of this subdivision\nand such association or corporation shall pay the tax so computed to the\ncommissioner of taxation and finance on or before March fifteenth of the\nfollowing year. Notwithstanding the provisions of this subdivision, in\nthe event that upon appeal from the determination of the commission that\nthe certification provided in paragraph b of this subdivision will not\nbe made, it is finally determined that the commission erred in failing\nto so certify and that any moneys received by the commissioner of\ntaxation and finance under paragraph c of this subdivision were paid in\nerror, the same shall be refunded at the rate of interest of six percent\nper annum. Payment of such tax due, or the anticipation of such payment,\nshall not affect the determination of purses in the year in which such\ntax arises or in the year in which such payment is made nor shall such\npayment in any other manner be considered in any statutory or\ncontractual calculation of purse obligations.\n e. Written notice of the certification of the commission pursuant to\nthe provisions of paragraph b of this subdivision shall be given by the\ncommission to the applicable association or corporation by the dates\ntherein specified. In like manner, written notice that such\ncertification will not be made shall be given by the commission to the\ncommissioner of taxation and finance and the applicable association or\ncorporation by such dates.\n 6. Notwithstanding any provision of law to the contrary, in the\nabsence of a contract between the licensed harness racing corporation or\nassociation and the representative horsemen's organization, the state\ngaming commission shall require such corporation or association to pay\nto the horsemen's organization an amount determined in accordance with\nthe previously negotiated contract for welfare, medical, or retirement\nplans, including any associated costs, provided by the horsemen's\norganization to participants in racing at the licensed harness racing\nfacility. The amounts shall be paid monthly from the horsemen's gross\npurse enhancement amount from video lottery gaming.\n