§ 905 — Combination of New York wagers with wagers made in other states or foreign countries

§ 905. Combination of New York wagers with wagers made in other states\nor foreign countries. 1. The combination of New York wagers with wagers\nof the same type made in other states or foreign countries is hereby\nauthorized pursuant to rules and regulations of the commission so as to\nproduce a common pari-mutuel pool for the calculation of odds and the\ndetermination of pay-outs from such pool, which payout shall be, as far\nas may be consistent herewith, the same for all winning bets of such\ntype irrespective of whether a wager is placed in this state or in\nanother state or foreign country.\n 2. The combination of wagers on New York races. a. The commission may\nauthorize the combination of out-of-state or foreign wagers on horse\nraces in New York state with the same type of wagers made in New York\nstate at the site of the statewide interface designated by the\ncommission for the combination of on-track and off-track wagers made in\nNew York state.\n b. In this regard the commission shall enact rules and regulations\nincluding but not limited to insuring the following standards: that the\nout-of-state or foreign wagering operator is duly authorized to conduct\nsuch wagering by the laws of the applicable out-of-state or foreign\ngovernment and is of satisfactory ethical and financial repute; that all\nsuch wagers are made in a format consistent with the format for such\nwagers in New York state as to number of betting entries and the\ncombination of such entries into coupled entries and fields; that if the\nlaws of such other state or foreign country permit, that such wagers\nshall be subject to the identical retention and breakage rates as\npertain at the site of the New York interface; that if the laws of such\nother state or foreign country prescribe a retention or breakage rate\ndifferent from that in New York state it would not be contrary to the\npublic interest to compute odds and payouts for such out-of-state or\nforeign wagers consistent with such law; that if it is consistent with\nthe public interest to compute odds and payouts for such out-of-state or\nforeign wagers according to retention or breakage rates different from\nthose in New York state, that the site of the New York interface is\nready and able to carry out such computations consistent with the\nformulas hereinafter prescribed; that in regard to foreign wagers, that\nfor computational purposes all foreign wagers to be combined shall be\nconverted into American dollars at the prevailing exchange rates\nestablished by a money center bank on the date of the race (although\nbreakage shall be computed consistent with foreign currency\ndenominations); that other than the variations caused by retention or\nbreakage computations that all odds and pay-outs shall be computed and\ncalculated, refunds or cancellations awarded or allowed, and\noverpayments or underpayments corrected solely in accordance with the\napplicable rules in New York state whose laws shall govern all disputes\npertinent thereto; that the means, methods and times of transmission of\nwagering data necessary to the proper implementation of this subdivision\nshall be as prescribed and approved by the commission; that all entities\nwhose wagers are so combined have agreed that the odds and final\npay-offs shall be computed in accordance with the data available for\ncomputation at the site of the statewide interface at the start of the\nrace and that pay-off computations in accordance therewith shall be\nfinal regardless of mistakes in transmission or failures to transmit or\nreceive all wagers and that the out-of-state or foreign operators shall\nbe solely responsible for claims asserted in that regard for wagers made\nthrough such operators; that the out-of-state or foreign operator\nconsents to be subject to audit by the commissioner of taxation and\nfinance or his or her designee to verify the accuracy and completeness\nof all wagers required to be transmitted by it hereunder; and such other\nrules and regulations as may be deemed necessary and appropriate by the\ncommission.\n c. If different retention or breakage rates than those prevailing at\nthe site of the New York interface are prescribed by the laws governing\nsuch out-of-state or foreign betting operator, and the commission is\nsatisfied that it would not be contrary to the public interest to accept\nsuch wagers for combination with New York wagers, calculations of the\ncurrent odds and final pay-off prices shall be made as follows:\n (i) All New York state and out-of-state and foreign wagers of the same\ntype shall be combined into single pools for calculation.\n (ii) As many tentative payout prices as there are different retention\nand breakage rates applicable (including the prevailing New York rate)\nshall be calculated on the basis of returning the appropriate rate of\nreturn, less breaks after imposition of each such rate of retention and\nbreaks.\n (iii) To each such out-of-state or foreign operator shall be allocated\nan amount sufficient for it to pay the appropriate pay-off to holders of\nwinning wagers placed with it together with the applicable retention\namount on its total wagers.\n (iv) To each New York operator shall be allocated an amount sufficient\nfor it to pay the appropriate pay-off to holders of winning wagers\nplaced with it together with the applicable New York retention amount on\nits total wagers.\n (v) The total amount of the combined pool less the combined total of\nall allocations as determined in subparagraphs (iii) and (iv) of this\nparagraph shall be credited to a special breakage account. The amount in\nsuch account giving appropriate weight to rates established for breakage\nshall be allocated as breaks among all operators in the combined pool in\naccordance with the rules and regulations of the commission. Should a\nminus pool eventuate in which the total combined pool is insufficient to\nreimburse each operator for the allocation due to it then the allocation\ndue to each such operator shall be reduced as may be appropriate and\nsuch operator shall be responsible for satisfying its liability from its\nown operating capital.\n d. No tax or surcharge shall be imposed by this state on any\nout-of-state or foreign wagering operator participating in any combined\npool herein. Nothing in this paragraph, however, shall impair the\nimposition of any tax or charge by this state on the consideration\nreceived from an out-of-state or foreign operator by a New York operator\nfor its consent to wagering on its races, transmitting the simulcast\nthereof, or the agreeing to combination of bets into its pools.\n e. The operator of the site of the statewide interface shall be\nresponsible for the actual collection or transmittal of funds in\nsettlement of the liabilities of all operators participating in the\ncombined pool.\n f. Nothing herein shall entitle any operator or person claiming\ntherefrom to participation in any share of the retention or payouts\nallocated to another operator participating in the combined pool.\n g. Nothing herein shall affect the validity of any surcharge imposed\nupon the winning pay-offs computed herein as may be prescribed by the\nlaws of this state or another state or foreign country.\n h. Nothing herein shall be construed to authorize or prescribe any act\ncontrary to federal law.\n 3. Combining New York wagers on horse races conducted in other states\nor foreign countries with wagers on such races made elsewhere.\n a. The commission may authorize the combination of wagers made in New\nYork state upon the outcome of out-of-state or foreign horse races with\nwagers made upon such races elsewhere in accordance with rules and\nregulations of the commission which shall include but not be limited to\nthe following provisions:\n (i) that if such combination is authorized that all New York state\noperators must participate therein to assure uniform New York odds and\npay-outs;\n (ii) that if the out-of-state or foreign computation is made on the\nbasis of different retention or breakage rates and (A) such out-of-state\nor foreign laws do not permit New York wagers to be computed in\naccordance with New York retention and breakage rates, that such\nvariation does not exceed twenty percent and shall be allocated pro rata\namong winning wagers in New York state and recipients of such retention\nand breakage rates in New York state, or (B) if such out-of-state or\nforeign laws do permit New York bets to be computed in accordance with\nNew York retention and breakage rates that such rates shall be applied\nand that the out-of-state or foreign operator doing such calculations is\nwilling and able to properly perform such function;\n (iii) that the out-of-state or foreign rules governing such wagers are\nunderstandable to New York wagerers and in the best judgment of the\ncommission shall not deviate substantially from customary and standard\npari-mutuel practice in general;\n (iv) that the New York operators are able to perform such transmission\nand computer retrieval functions as may be required;\n (v) that such combination will enhance the best interest of racing\ngenerally; and\n (vi) such other rules and regulations as may be deemed necessary and\nappropriate by the commission.\n b. Nothing herein shall be construed to authorize or prescribe any act\ncontrary to federal law.\n 4. In those instances in which the retention rates of the out-of-state\ntrack are different from the retention rates authorized in this section,\ndistribution to each of the entities entitled to receive payment under\nsection five hundred twenty-seven or article ten of this chapter after\npayment of state taxes and regulatory fees shall be adjusted\nproportionately in an appropriate manner to account for higher or lower\nretention rates. For purposes of determining payment on out-of-state\nwagers the retention rate shall be the amount sufficient to pay holders\nof winning wagers plus any payments required to be made to the\nout-of-state track which exceeds two per centum of handle.\n