A05954 Summary:

BILL NOA05954
 
SAME ASNo Same As
 
SPONSORPretlow
 
COSPNSR
 
MLTSPNSR
 
Amd 1617-a & 1612, Tax L; amd 301 & 527, RWB L
 
Relates to the Catskill off-track betting corporation providing licensing and financing to the Monticello racetrack and the ability to provide capital improvements.
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A05954 Actions:

BILL NOA05954
 
02/20/2019referred to racing and wagering
01/08/2020referred to racing and wagering
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A05954 Committee Votes:

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A05954 Floor Votes:

There are no votes for this bill in this legislative session.
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A05954 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5954
 
SPONSOR: Pretlow
  TITLE OF BILL: An act to amend the tax law and the racing, pari-mutuel wagering and breeding law, in relation to the Catskill off-track betting corporation providing licensing and financing to the Monticello racetrack   PURPOSE: To maintain the State and local video lottery gaming revenue coming from Monticello racetrack, as well as existing racing support payments, and ensure the long-term continuation of harness racing at Monticello race- track   SUMMARY OF PROVISIONS: Section 1: Eliminates the authorization for video lottery gaming at Monticello racetrack, consistent with the public announcement by the operator that it would cease such gaming in April 2019 Section 2: Authorizes Catskill OTB to take over the 1,110 video lottery terminals (VLTs) currently in operation at Monticello racetrack and continue the operation of such VLTs at a maximum of 3 different facili- ties in the Catskill OTB region, excluding any county where a casino is already in operation (Sullivan, Tioga and Westchester). Section 3: Provides that Catskill OTB shall receive a VLT vendor fee of 35% of net win, the same vendor fee provided to other OTBs operating VLT machines (Western, Suffolk and Nassau). Section 4: Provides that, as consideration for being granted the author- ization to operate the VLT facilities, Catskill OTB shall: (1) continue the current racing support payments in place at Monticello racetrack (8.75% to purses and 1.25% to breeders); and (2) maintain the same number of race dates at Monticello racetrack. Section 5: Provides that the vendor fee paid to Catskill OTB (after pay out of racing support payments) shall be distributed as follows: (1) 20% to the county in which the VLT facility is located; and (2) 80% for payment of Catskill OTB operating costs with the net revenue remaining after such costs to be divided among the participating counties on the basis of population. Section 6: Authorizes the Gaming Commission to issue licenses to Cats- kill OTB to conduct harness race meetings at Monticello racetrack, in order to ensure the long-term continuation of harness racing at such track. Section 7: Provides that the Monticello Racetrack shall remain a regional track and retain its regional payments after Catskill OTB is approved to take over operation and conduct harness racing at such track. Section 8: Effective date language.   EXISTING LAW: Tax Law sections 1612 and 1617-a authorize Monticello racetrack to oper- ate VLT machines and distributes the net win from such machines as follows: * 41% vendor fee (less 10% in racing support payments for purses and breeders); * 39% State education aid; * 10% marketing allowance; * 10% gaming administration to the State Racing, Pari-Mutuel Wagering and Breeding Law section 1351 provides a 39% tax on casino gross gaming revenue (of which 80% is allocated to State education aid and 20% to local tax relief).   JUSTIFICATION: On January 23rd, the operator of VLT gaming at Monticello racetrack announced it would be ceasing operation of such gaming in April 2019. The closure of the VLT operation at Monticello racetrack would result in significant loss of revenue for State education aid, local tax relief and racing support payments. In SFY 2017-18, the 1,110 VLT machines at Monticello racetrack generated $21.4M in State education aid, $1.2M in local tax relief, and $5.5M in racing support payments. In addition, the closure of the VLT operation at Monticello racetrack would threaten the long-term viability of harness racing at such track. This bill would help maintain the State and local VLT revenue coming from the 1,110 VLT machines at Monticello racetrack, as well as the existing racing support payments, and ensure the long-term continuation of harness racing at the track. The bill would accomplish all of these critically important goals by authorizing Catskill OTB to take over operation of both the 1,110 VLT machines and the racetrack, which Cats- kill OTB would purchase from the existing operator using unspent capital reserves. To avoid directly competing with the casino in Sullivan County - or the casinos in Tioga and Westchester counties - Catskill OTB would open and operate up to 3 new smaller VLT facilities in other counties within its region. As consideration for the authorization to operate the 1,110 VLT machines and the racetrack, Catskill OTB would be required to maintain:(1) current levels of State education aid, local tax relief and racing support payments; and (2) the same number of harness race dates at Monticello racetrack currently being conducted.   FISCAL IMPLICATIONS: The bill is necessary to maintain current levels of State education aid, local tax relief and racing support payments coming from VLT gaming at Monticello racetrack.   EFFECTIVE DATE: This act shall take effect 30 days after becoming law.
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A05954 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5954
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 20, 2019
                                       ___________
 
        Introduced  by M. of A. PRETLOW -- read once and referred to the Commit-
          tee on Racing and Wagering
 
        AN ACT to amend the tax law and the  racing,  pari-mutuel  wagering  and
          breeding  law,  in  relation  to the Catskill off-track betting corpo-
          ration providing licensing and financing to the Monticello racetrack

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Paragraph 1 of subdivision a of section 1617-a of the tax
     2  law, as amended by section 1 of part SS of chapter 60  of  the  laws  of
     3  2016, is amended to read as follows:
     4    (1)  Aqueduct,  [Monticello,]  Yonkers, Finger Lakes, and Vernon Downs
     5  racetracks;
     6    § 2. Paragraphs 3 and 4 of subdivision a of section 1617-a of the  tax
     7  law, as added by section 1 of part SS of chapter 60 of the laws of 2016,
     8  are amended and a new paragraph 5 is added to read as follows:
     9    (3)  a  maximum  of  two  facilities,  which  shall be vendors for all
    10  purposes under this  article,  neither  to  exceed  one  thousand  video
    11  lottery  gaming  devices, established within region three of zone one as
    12  defined by section one thousand three hundred ten of the  racing,  pari-
    13  mutuel  wagering  and  breeding  law, one each operated by a corporation
    14  established pursuant to section five hundred two of the racing, pari-mu-
    15  tuel wagering and breeding law in the  Suffolk  region  and  the  Nassau
    16  region to be located within a facility authorized pursuant to [sections]
    17  section  one thousand eight or one thousand nine of the racing, pari-mu-
    18  tuel wagering and breeding law; [and]
    19    (4) Aqueduct racetrack, within the lottery terminal facility, pursuant
    20  to an agreement between the corporation established pursuant to  section
    21  five hundred two of the racing, pari-mutuel wagering and breeding law in
    22  the  Nassau  region and the operator of video lottery gaming at Aqueduct
    23  racetrack, when such agreement is approved by the gaming commission  and
    24  as long as such agreement is in place, and when such agreement is accom-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09921-01-9

        A. 5954                             2
 
     1  panied  by  a  detailed  spending  plan  for the corporation established
     2  pursuant to section five hundred two of the racing, pari-mutuel wagering
     3  and breeding law in the Nassau region, which includes  a  plan  for  the
     4  timely  payment  of  liabilities  due to the franchised corporation, and
     5  when such video lottery devices are hosted  by  the  operator  of  video
     6  lottery gaming at Aqueduct racetrack on behalf of the corporation estab-
     7  lished  pursuant  to section five hundred two of the racing, pari-mutuel
     8  wagering and breeding law in the Nassau region in lieu of  the  develop-
     9  ment  of a facility in Nassau county as authorized by paragraph three of
    10  this subdivision [a of this section].  Such  agreement  reached  by  the
    11  parties  shall  identify the agency principally responsible for funding,
    12  approving or undertaking any  actions  of  such  agreement.    Provided,
    13  however, nothing in this paragraph shall infringe upon the rights of the
    14  corporation  established  pursuant  to  section  five hundred two of the
    15  racing, pari-mutuel wagering and breeding law in the  Nassau  region  to
    16  develop  a facility pursuant to paragraph three of this subdivision upon
    17  the expiration, termination, or withdrawal of such agreement[.]; and
    18    (5) a maximum of three facilities, which  shall  be  vendors  for  all
    19  purposes  under  this  article, with a total of one thousand one hundred
    20  ten video lottery gaming devices  in  the  county  of  Broome,  Chemung,
    21  Chenango,  Delaware,  Orange,  Rockland,  Dutchess,  Tompkins, Putnam or
    22  Ulster and to be operated  by  a  corporation  established  pursuant  to
    23  section  five hundred two of the racing, pari-mutuel wagering and breed-
    24  ing law, and located within a facility authorized  pursuant  to  section
    25  one  thousand  eight  or  one  thousand  nine of the racing, pari-mutuel
    26  wagering and breeding law.
    27    § 3. Clause (G-1) of subparagraph (ii) of paragraph 1 of subdivision b
    28  of section 1612 of the tax law, as amended by chapter 175 of the laws of
    29  2013, is amended to read as follows:
    30    (G-1) Notwithstanding [clause] clauses (A) and (B)  of  this  subpara-
    31  graph,  when  a video lottery gaming facility is located in [either] the
    32  county of Broome, Chemung, Chenango, Delaware, Orange, Rockland,  Dutch-
    33  ess,  Tompkins,  Putnam,  Ulster, Nassau or Suffolk and is operated by a
    34  corporation established pursuant to section  five  hundred  two  of  the
    35  racing,  pari-mutuel  wagering and breeding law at a rate of thirty-five
    36  percent of the total revenue wagered at  the  vendor  after  payout  for
    37  prizes pursuant to this chapter;
    38    §  4.  Paragraph 2 of subdivision b of section 1612 of the tax law, as
    39  amended by section 1 of part OO of chapter 59 of the laws  of  2014,  is
    40  amended to read as follows:
    41    2. As consideration for the operation of a video lottery gaming facil-
    42  ity,  the division, shall cause the investment in the racing industry of
    43  a portion of the vendor fee received pursuant to paragraph one  of  this
    44  subdivision  in  the  manner  set  forth in this subdivision.   With the
    45  exception of Aqueduct racetrack or a facility in the county of Nassau or
    46  Suffolk operated by a corporation established pursuant to  section  five
    47  hundred  two  of the racing, pari-mutuel wagering and breeding law, each
    48  such track shall dedicate a portion of its vendor fees, received  pursu-
    49  ant  to clause (A), (B), (C), (D), (E), (F), or (G) of subparagraph (ii)
    50  of paragraph one of this subdivision, for the purpose of enhancing purs-
    51  es at such track, in an amount equal to eight and three-quarters percent
    52  of the total revenue wagered at the  vendor  track  after  pay  out  for
    53  prizes.    Any  video lottery gaming facility in the Catskill region, as
    54  defined in section five hundred  nineteen  of  the  racing,  pari-mutuel
    55  wagering  and  breeding  law  and to be operated by a corporation estab-
    56  lished pursuant to section five hundred two of the  racing,  pari-mutuel

        A. 5954                             3
 
     1  wagering  and  breeding  law, shall dedicate a portion of its vendor fee
     2  for the purpose of enhancing purses at Monticello racetrack in an amount
     3  equal to eight and three-quarters percent of the total  revenue  wagered
     4  at the facility after pay out for prizes. One percent of the gross purse
     5  enhancement  amount,  as  required by this subdivision, shall be paid to
     6  the gaming commission to be  used  exclusively  to  promote  and  ensure
     7  equine health and safety in New York. Any portion of such funding to the
     8  gaming  commission  unused during a fiscal year shall be returned to the
     9  video lottery gaming operators on a pro rata basis  in  accordance  with
    10  the  amounts  originally  contributed by each operator and shall be used
    11  for the purpose of enhancing purses at  such  track.  One  and  one-half
    12  percent  of  the gross purse enhancement amount at a thoroughbred track,
    13  as required by this subdivision, shall be paid to an account established
    14  pursuant to section two hundred twenty-one-a of the racing,  pari-mutuel
    15  wagering  and  breeding  law  to  be  used exclusively to provide health
    16  insurance for jockeys. In addition, with the exception of Aqueduct race-
    17  track or a facility in the county of Nassau or  Suffolk  operated  by  a
    18  corporation  established  pursuant  to  section  five hundred two of the
    19  racing, pari-mutuel wagering  and  breeding  law,  one  and  one-quarter
    20  percent  of  total revenue wagered at the vendor track after pay out for
    21  prizes, received pursuant to clause (A), (B), (C), (D), (E), (F), or (G)
    22  of subparagraph (ii) of paragraph one  of  this  subdivision,  shall  be
    23  distributed  to  the  appropriate breeding fund for the manner of racing
    24  conducted by such track.
    25    Provided, further, that as additional consideration for the  operation
    26  of video lottery gaming facilities, the Catskill regional off-track-bet-
    27  ting  corporation shall maintain the same number of race dates at Monti-
    28  cello racetrack being conducted at the time it  receives  a  license  to
    29  conduct harness race meetings at such racetrack.
    30    Provided,  further,  that nothing in this paragraph shall prevent each
    31  track from entering into an agreement, not to exceed  five  years,  with
    32  the  organization  authorized  to  represent its horsemen to increase or
    33  decrease the portion of its vendor fee dedicated to enhancing purses  at
    34  such  track  during the years of participation by such track, or to race
    35  fewer dates than required herein.
    36    § 5. Section 1612 of the tax law is amended by adding a  new  subdivi-
    37  sion i to read as follows:
    38    i.  As  consideration for operation of a video lottery gaming facility
    39  located in the counties of Broome, Chemung, Chenango, Delaware,  Orange,
    40  Rockland,  Dutchess,  Tompkins,  Putnam,  or  Ulster,  and operated by a
    41  corporation established pursuant to section  five  hundred  two  of  the
    42  racing,  pari-mutuel wagering and breeding law, the division shall cause
    43  the vendor's fee to be distributed as  follows  after  the  pay  out  of
    44  racing  support payments: (1) twenty percent shall be transferred to the
    45  county in which the vendor facility is located; and  (2)  the  remainder
    46  shall  be  used  for payment of the costs of the corporation's functions
    47  pursuant to section five hundred  sixteen  of  the  racing,  pari-mutuel
    48  wagering  and  breeding law, and the net revenue remaining after payment
    49  of such costs shall be divided among the participating  counties  listed
    50  in  this  paragraph on the basis of population as defined in paragraph b
    51  of subdivision two of section five hundred sixteen of the racing,  pari-
    52  mutuel wagering and breeding law.
    53    §  6. Section 301 of the racing, pari-mutuel wagering and breeding law
    54  is amended by adding a new subdivision 6 to read as follows:
    55    6. The board shall have the power to issue licenses  to  the  Catskill
    56  regional off-track-betting corporation or to a subsidiary of said corpo-

        A. 5954                             4
 
     1  ration for the purpose of conducting harness race meetings at Monticello
     2  racetrack  and to make capital improvements to said track, provided that
     3  such corporation  meets  the  terms  and  conditions  for  licensure  as
     4  provided under this article.  Notwithstanding the provisions of articles
     5  five  and five-a of this chapter, said corporation shall be deemed to be
     6  a harness  racing  corporation  with  respect  to  pari-mutuel  wagering
     7  conducted at said track pursuant to this chapter, except that net reven-
     8  ues  derived  from  such pari-mutuel wagering shall be distributed among
     9  the counties that participate in such corporation on the basis of  popu-
    10  lation,  as defined as the total population in each participating county
    11  shown by the latest preceding decennial federal census of  the  calendar
    12  year in which such distribution is to be made.
    13    §  7.  The  opening  paragraph  of subdivision 1 of section 527 of the
    14  racing, pari-mutuel wagering and breeding law, as amended by  section  4
    15  of  part  BB  of  chapter  60 of the laws of 2016, is amended to read as
    16  follows:
    17    The disposition of the retained commission from pools  resulting  from
    18  regular,  multiple or exotic bets, as the case may be, whether placed on
    19  races run within a region or  outside  a  region,  conducted  by  racing
    20  corporations, harness racing associations or corporations, quarter horse
    21  racing associations or corporations or races run outside the state shall
    22  be governed by the tables in paragraphs a and b of this subdivision. The
    23  rate  denominated  "state  tax" shall represent the rate of a reasonable
    24  tax imposed upon the retained commission for the privilege of conducting
    25  off-track pari-mutuel betting, which tax is hereby levied and  shall  be
    26  payable  in the manner set forth in this section. Each off-track betting
    27  corporation shall pay to the gaming  commission  as  a  regulatory  fee,
    28  which fee is hereby levied, six-tenths of one percent of the total daily
    29  pools  of  such  corporation.  Each  corporation  shall  also pay twenty
    30  percent of the breaks derived from  bets  on  harness  races  and  fifty
    31  percent  of the breaks derived from bets on all other races to the agri-
    32  culture and New York State horse breeding and development  fund  and  to
    33  the  thoroughbred  breeding  and  development  fund,  the  total of such
    34  payments to be apportioned fifty percent to  each  such  fund.  For  the
    35  purposes  of  this  section, the New York city, Suffolk, Nassau, and the
    36  Catskill regions shall constitute a single region and  any  thoroughbred
    37  track  located  within the Capital District region shall be deemed to be
    38  within such single region. A "regional meeting" shall  refer  to  either
    39  harness  or  thoroughbred  meetings,  or  both, except that a franchised
    40  corporation shall not be a regional track for the purpose  of  receiving
    41  distributions  from  bets on thoroughbred races conducted by a thorough-
    42  bred track in the Catskill region conducting a mixed meeting.  With  the
    43  exception  of a harness racing association or corporation first licensed
    44  to conduct pari-mutuel wagering at a track located in Tioga [or],  Sara-
    45  toga  or  Sullivan county after January first, two thousand five, racing
    46  corporations first licensed to conduct pari-mutuel racing after  January
    47  first,  nineteen  hundred  eighty-six or a harness racing association or
    48  corporation first licensed to conduct pari-mutuel wagering  at  a  track
    49  located  in  Genesee  County after January first, two thousand five, and
    50  quarter horse tracks shall not be "regional tracks"; if  there  is  more
    51  than  one harness track within a region, such tracks shall evenly divide
    52  payments made pursuant to the tables in  paragraphs  a  and  b  of  this
    53  subdivision  when  neither track is running. In the event a track elects
    54  to reduce its retained percentage from any or  all  of  its  pari-mutuel
    55  pools, the payments to the track holding the race and the regional track
    56  required  by  paragraphs a and b of this subdivision shall be reduced in

        A. 5954                             5
 
     1  proportion to such reduction. Nothing in this section shall be construed
     2  to authorize the conduct of off-track betting contrary to the provisions
     3  of section five hundred twenty-three of this article.
     4    §  8.  This  act shall take effect on the thirtieth day after it shall
     5  have become a law.
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