NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8468A
SPONSOR: Rosenthal L TITLE OF BILL:
An act to amend the tax law, in relation to the investment of funds
wagered on video lottery gaming for certain horse races; to repeal
certain provisions of the tax law relating thereto; and to repeal para-
graph b of subdivision 1 of section 1355 of the racing, pari-mutuel
wagering and breeding law relating thereto
PURPOSE:
This legislation will end racing subsidies in New York State and invest
the revenue generated from video lottery gaming facilities at racetracks
to education and communities throughout the state.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends subdivision f of section 1612 of the tax law.
Section two amends paragraph 1-b of subdivision b of section 1612 of the
tax law.
Section three amends subdivision f-1 of section 1612 of the tax law.
Section four amends paragraph 2 of subdivision b of section 1612 of the
tax law.
Section five repeals paragraph 3 of subdivision b of section 1612 of the
tax law.
Section six amends subdivision h of section 1612 of the tax law.
Section seven amends paragraph 5 of subdivision a of section 1617-a of
the tax law.
Section eight repeals paragraph b of subdivision 1 of section 1355 of
the racing, pari-mutuel wagering and breeding law.
Section nine contains the severability clause. Section ten establishes
the effective date.
JUSTIFICATION:
Attendance at horse racing venues in New York State has sharply declined
over the years. While the summer racing season at Saratoga remains popu-
lar, stands at Yonkers Raceway, Aqueduct Racetrack and others are prac-
tically empty. The decline in the popularity of horse racing in recent
years has been partly attributed to the public's increasing disapproval
of cruelty within the industry, evidenced by doping scandals and the
high numbers of injuries and deaths. Despite horse racing's diminishing
attraction, New York State continues to provide millions of dollars in
subsidies each year to prop up the industry. Other states, including
Kentucky, California, Illinois, and Texas do not provide state subsidies
to their racing industry.
Each year, approximately $250 million in revenue generated by the
state's casino industry is diverted to support the horse racing indus-
try. This revenue would be better spent investing in New York State's
education system as well as economic development in communities where
racing occurs. A 2021 Marist poll found that just 9% of New Yorkers
support state subsidies of horse racing, and as the horse racing indus-
try continues to decline in popularity, it is time to reinvest these
subsidies in areas that will truly help New Yorkers.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
8468--A
2021-2022 Regular Sessions
IN ASSEMBLY
November 17, 2021
___________
Introduced by M. of A. L. ROSENTHAL, SEAWRIGHT, GOTTFRIED, EPSTEIN,
GONZALEZ-ROJAS, SIMON, KIM, FERNANDEZ, BURGOS -- read once and
referred to the Committee on Ways and Means -- recommitted to the
Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2
-- committee discharged, bill amended, ordered reprinted as amended
and recommitted to said committee
AN ACT to amend the tax law, in relation to the investment of funds
wagered on video lottery gaming for certain horse races; to repeal
certain provisions of the tax law relating thereto; and to repeal
paragraph b of subdivision 1 of section 1355 of the racing, pari-mutu-
el wagering and breeding law relating thereto
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision f of section 1612 of the tax law, as amended by
2 chapter 174 of the laws of 2013, paragraph 1 as amended by section 2 of
3 part OO of chapter 59 of the laws of 2014 and paragraph 3 as amended by
4 section 2 of part V of chapter 59 of the laws of 2020, is amended to
5 read as follows:
6 f. As consideration for the operation of the video lottery gaming
7 facility at Aqueduct racetrack, the division shall cause the investment
8 in the education system of the state of New York and the racing industry
9 of the following percentages of the vendor fee to be deposited or paid,
10 as follows:
11 1. Six and one-half percent of the total wagered after payout of
12 prizes for the first year of operation of video lottery gaming at Aque-
13 duct racetrack, seven percent of the total wagered after payout of
14 prizes for the second year of operation, and seven and one-half percent
15 of the total wagered after payout of prizes for the third year of opera-
16 tion and thereafter, for the purpose of [enhancing purses at Aqueduct
17 racetrack, Belmont Park racetrack and Saratoga race course. One percent
18 of the gross purse enhancement amount, as required by this subdivision,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13560-05-2
A. 8468--A 2
1 shall be paid to the gaming commission to be used exclusively to promote
2 and ensure equine health and safety in New York. Any portion of such
3 funding to the gaming commission unused during a fiscal year shall be
4 returned on a pro rata basis in accordance with the amounts originally
5 contributed and shall be used for the purpose of enhancing purses at
6 such tracks] funding the education system of the state of New York,
7 shall be deposited in the state lottery fund for additional lottery
8 grants to eligible school districts, including schools serving students
9 with disabilities and schools with preschool special education programs.
10 [One and one-half percent of the gross purse enhancement amount, as
11 required by this subdivision, shall be paid to an account established
12 pursuant to section two hundred twenty-one-a of the racing, pari-mutuel
13 wagering and breeding law to be used exclusively to provide health
14 insurance for jockeys.]
15 2. [One] Eight and one-half percent of the total wagered after payout
16 of prizes [for the first year of operation of video lottery gaming at
17 Aqueduct racetrack, one and one-quarter percent of the total wagered
18 after payout of prizes for the second year of operation, and one and
19 one-half percent of the total wagered after payout of prizes for the
20 third year of operation and thereafter, for an appropriate breeding fund
21 for the manner of racing conducted at Aqueduct racetrack, Belmont Park
22 racetrack and Saratoga race course] shall be deposited in the state
23 lottery fund for additional lottery grants to eligible school districts,
24 including schools serving students with disabilities and schools with
25 preschool special education programs.
26 3. [Four percent of the total revenue wagered after payout of prizes
27 to be deposited into an account of the franchised corporation estab-
28 lished pursuant to section two hundred six of the racing, pari-mutuel
29 wagering and breeding law to be used for capital expenditures in main-
30 taining and upgrading Aqueduct racetrack, Belmont Park racetrack and
31 Saratoga race course. Capital expenditures may include funding the
32 construction of and initially equipping a state-based equine drug test-
33 ing and research laboratory to be used pursuant to subdivision seven of
34 section nine hundred two of the racing, pari-mutuel wagering and breed-
35 ing law.
36 4. Three percent of the total revenue wagered after payout for prizes
37 to be deposited into an account of the franchised corporation estab-
38 lished pursuant to section two hundred six of the racing, pari-mutuel
39 wagering and breeding law to be used for general thoroughbred racing
40 operations at Aqueduct racetrack, Belmont Park racetrack and Saratoga
41 race course.
42 5.] Paragraphs one[,] and two[, three and four] of this subdivision
43 shall be known collectively as the "[racing] education support
44 payments".
45 § 2. Paragraph 1-b of subdivision b of section 1612 of the tax law, as
46 added by section 2 of part EE of chapter 59 of the laws of 2019, is
47 amended to read as follows:
48 1-b. Notwithstanding any provision of law to the contrary, free play
49 allowance credits authorized by the division pursuant to subdivision i
50 of section sixteen hundred seventeen-a of this article shall not be
51 included in the calculation of the total amount wagered on video lottery
52 games, the total amount wagered after payout of prizes, the vendor fees
53 payable to the operators of video lottery gaming facilities, fees paya-
54 ble to the division's video lottery gaming equipment contractors, [or]
55 racing support payments, or education support payments.
A. 8468--A 3
1 § 3. Subdivision f-1 of section 1612 of the tax law, as amended by
2 chapter 175 of the laws of 2013, is amended to read as follows:
3 f-1. As consideration for operation of video lottery gaming facility
4 located in the county of Nassau or Suffolk and operated by a corporation
5 established pursuant to section five hundred two of the racing, pari-mu-
6 tuel wagering and breeding law, the division shall cause the [investment
7 in the racing industry of the] following [percentages] percentage of the
8 vendor fee to be deposited or paid as follows:
9 [1. Two and three tenths] Five percent of the total wagered after
10 payout of prizes [for the purpose of enhancing purses at Aqueduct race-
11 track, Belmont Park racetrack and Saratoga race course, provided, howev-
12 er, that any amount that is in excess of the amount necessary to main-
13 tain purse support from video lottery gaming at Aqueduct racetrack,
14 Belmont Park racetrack and Saratoga race course at the same level real-
15 ized in two thousand thirteen, to be adjusted by the consumer price
16 index for all urban consumers, as published annually by the United
17 States department of labor, bureau of labor statistics, shall instead be
18 returned to the commission] shall be deposited in the state lottery fund
19 for additional lottery grants to eligible school districts, including
20 schools serving students with disabilities and schools with preschool
21 special education programs.
22 [2. five tenths percent of the total wagered after payout of prizes
23 for the appropriate breeding fund for the manner of racing at Aqueduct
24 racetrack, Belmont Park racetrack and Saratoga race course, provided,
25 however, that any amount that is in excess of the amount necessary to
26 maintain payments from video lottery gaming at Aqueduct racetrack at the
27 same level realized in two thousand thirteen, to be adjusted by the
28 consumer price index for all urban consumers, as published annually by
29 the United States department of labor, bureau of labor statistics, shall
30 instead be returned to the commission.
31 3. one and three tenths percent of the total revenue wagered after
32 payout of prizes to be deposited into an account of the franchised
33 corporation established pursuant to section two hundred six of the
34 racing, pari-mutuel wagering and breeding law to be used for capital
35 expenditures in maintaining and upgrading Aqueduct racetrack, Belmont
36 Park racetrack and Saratoga race course, provided, however, that any
37 amount that is in excess of the amount necessary to maintain payments
38 for capital expenditures from video lottery gaming at Aqueduct racetrack
39 at the same level realized in two thousand thirteen, to be adjusted by
40 the consumer price index for all urban consumers, as published annually
41 by the United States department of labor, bureau of labor statistics,
42 shall instead be returned to the commission.
43 4. Nine tenths percent of the total revenue wagered after payout for
44 prizes to be deposited into an account of the franchised corporation
45 established pursuant to section two hundred six of the racing, pari-mu-
46 tuel wagering and breeding law to be used for general thoroughbred
47 racing operations at Aqueduct racetrack, Belmont Park racetrack and
48 Saratoga race course, provided, however, that any amount that is in
49 excess of the amount necessary to maintain payments for general
50 thoroughbred racing operations from video lottery gaming at Aqueduct
51 racetrack at the same level realized in two thousand thirteen, to be
52 adjusted by the consumer price index for all urban consumers, as
53 published annually by the United States department of labor, bureau of
54 labor statistics, shall instead be returned to the commission.]
A. 8468--A 4
1 § 4. The opening paragraph of paragraph 2 of subdivision b of section
2 1612 of the tax law, as amended by section 2 of part S of chapter 39 of
3 the laws of 2019, is amended to read as follows:
4 As consideration for the operation of a video lottery gaming facility,
5 the division, shall cause the investment [in the racing industry] in
6 those counties that host video lottery gaming facilities, of a portion
7 of the vendor fee received pursuant to paragraph one of this subdivision
8 in the manner set forth in this subdivision. With the exception of
9 Aqueduct racetrack, a video lottery gaming facility authorized pursuant
10 to paragraph five of subdivision a of section sixteen hundred seven-
11 teen-a of this article or a facility in the county of Nassau or Suffolk
12 operated by a corporation established pursuant to section five hundred
13 two of the racing, pari-mutuel wagering and breeding law, each such
14 track shall dedicate a portion of its vendor fees, received pursuant to
15 clause (A), (B), (B-1), (B-2), (C), or (D) of subparagraph (ii) of para-
16 graph one of this subdivision, for the purpose of [enhancing purses at
17 such track] funding economic development, job creation, and workforce
18 protections in the counties that host video lottery gaming facilities,
19 in an amount equal to eight and three-quarters percent of the total
20 revenue wagered at the vendor track after pay out for prizes. [One
21 percent of the gross purse enhancement amount, as required by this
22 subdivision, shall be paid to the gaming commission to be used exclu-
23 sively to promote and ensure equine health and safety in New York. Any
24 portion of such funding to the gaming commission unused during a fiscal
25 year shall be returned to the video lottery gaming operators on a pro
26 rata basis in accordance with the amounts originally contributed by each
27 operator and shall be used for the purpose of enhancing purses at such
28 track] Such funds shall be credited to the host county in which each
29 vendor track resides. Such funds shall be utilized by such counties for
30 the purposes of economic development, job creation, and workforce
31 protections. If a vendor track ceases racing operations, such vendor fee
32 shall continue to be paid.
33 [One and one-half percent of the gross purse enhancement amount at a
34 thoroughbred track, as required by this subdivision, shall be paid to an
35 account established pursuant to section two hundred twenty-one-a of the
36 racing, pari-mutuel wagering and breeding law to be used exclusively to
37 provide health insurance for jockeys.] In addition, with the exception
38 of Aqueduct racetrack, a video lottery gaming facility authorized pursu-
39 ant to paragraph five of subdivision a of section sixteen hundred seven-
40 teen-a of this article or a facility in the county of Nassau or Suffolk
41 operated by a corporation established pursuant to section five hundred
42 two of the racing, pari-mutuel wagering and breeding law, one and one-
43 quarter percent of total revenue wagered at the vendor track after pay
44 out for prizes, received pursuant to clause (A), (B), (B-1), (B-2), (C),
45 or (D) of subparagraph (ii) of paragraph one of this subdivision, shall
46 be distributed [to the appropriate breeding fund for the manner of
47 racing conducted by such track] for funding economic development, job
48 creation, and workforce protections in the counties that host video
49 lottery gaming facilities.
50 § 5. Paragraph 3 of subdivision b of section 1612 of the tax law is
51 REPEALED.
52 § 6. Subdivision h of section 1612 of the tax law, as amended by
53 section 3 of part S of chapter 39 of the laws of 2019, is amended to
54 read as follows:
55 h. As consideration for the operation of a video lottery gaming facil-
56 ity located in Orange county, the division shall cause the investment in
A. 8468--A 5
1 the [racing industry] education system of the state of New York at the
2 following amount from the vendor fee to be paid as follows:
3 [As amount to the horsemen for purses at a licensed racetrack in
4 Sullivan county in an] An amount equal to eight and three-quarters
5 percent of the total revenue wagered at the video lottery gaming facili-
6 ty, after pay out for prizes to be deposited in the state lottery fund
7 for additional lottery grants to eligible school districts, including
8 schools serving students with disabilities and schools with preschool
9 special education programs. [The facility located in Orange county, as
10 defined in paragraph five of subdivision a of section sixteen hundred
11 seventeen-a of this article shall pay to the horsemen at a licensed
12 racetrack at Yonkers racetrack an amount to maintain purses for such
13 horsemen at the same dollar levels realized in two thousand eighteen, to
14 be adjusted by the consumer price index for all urban consumers, as
15 published annually by the United States department of labor bureau of
16 labor statistics.] In addition, one and one-quarter percent of total
17 revenue wagered at the video lottery gaming facility after pay out for
18 prizes, received pursuant to clause (B) of subparagraph (ii) of para-
19 graph one of subdivision b of this section, shall be distributed to the
20 [appropriate breeding] state lottery fund for [the manner of racing
21 conducted by such track] additional lottery grants to eligible school
22 districts, including schools serving students with disabilities and
23 schools with preschool special education programs. In no circumstance
24 shall net proceeds of the lottery, including the proceeds from video
25 lottery gaming, be used for the payment of non-lottery expenses of the
26 gaming commission, administrative or otherwise.
27 § 7. Paragraph 5 of subdivision a of section 1617-a of the tax law, as
28 added by section 4 of part S of chapter 39 of the laws of 2019, is
29 amended to read as follows:
30 (5) At a facility located in Orange county to be operated by the enti-
31 ty otherwise licensed to operate video lottery gaming at Monticello
32 racetrack, provided that: (i) such licensed entity is no longer operat-
33 ing video lottery gaming at Monticello racetrack [and provided that
34 Monticello racetrack is conducting racing operations]; (ii) such facili-
35 ty in Orange county is not sited within a thirty mile radius of the
36 video lottery gaming facility at Yonkers racetrack; and (iii) the
37 licensed entity, its subsidiaries and affiliates, including the entity
38 licensed to operate a commercial gaming facility in Sullivan county, and
39 the entity licensed to operate video lottery gaming at Yonkers racetrack
40 enter into a mitigation agreement, to be approved by the gaming commis-
41 sion, which shall include, but not be limited to, terms that require:
42 (A) the operator of the facility in Orange county to make an annual
43 payment to the entity licensed to operate video lottery gaming or
44 commercial gaming at Yonkers racetrack to account for the effects that
45 siting such facility in Orange county would likely have on the gross
46 gaming revenue of the entity licensed to operate at Yonkers racetrack;
47 (B) employment levels at the affected facilities; and (C) that upon
48 expiration or termination of the agreement, the authority to operate
49 video lottery gaming in Orange county shall cease. Notwithstanding any
50 other provision of this subdivision, at no time shall an entity operat-
51 ing video lottery gaming in Orange county be permitted to apply for or
52 receive a license to operate a commercial gaming facility in that coun-
53 ty.
54 § 8. Paragraph (b) of subdivision 1 of section 1355 of the racing,
55 pari-mutuel wagering and breeding law is REPEALED.
A. 8468--A 6
1 § 9. Severability. If any provision or term of this act is, for any
2 reason, declared unconstitutional or invalid or ineffective by any
3 competent jurisdiction, such decision shall not affect the validity of
4 the effectiveness of the remaining portions of this act or any part
5 thereof.
6 § 10. This act shall take effect immediately.
