Increases investment through vendors fees in certain regional race tracks located within forty miles of a casino gambling facility.
TITLE OF BILL: An act to amend the tax law and the racing, pari-mutuel wagering and breeding law, in relation to vendor's fees
GENERAL PURPOSE: To require casinos authorized pursuant to Article 1,
Section 9 of the state Constitution to be located at existing racetracks that are conducting video lottery gaming and to require such facilities to make racing support payments to regional tracks for purse enhancements and capital expenditures.
SUMMARY OF SPECIFIC PROVISIONS: This bill amends Section 1612 of the Tax Law to extend the current 41% vendor fee for video lottery facility operators within 40 miles of a Native American Casino to those racetracks operating VLTs that are within 40 miles of a commercial casino authorized by Section 9 subdivision 1 of the Constitution. The bill further adds a new Section 1113 to the Racing, Pari-Mutuel Wagering and Breeding Law to provide that the operation of casino gaming at a facility pursuant to Section 9, subdivision 1 of the Constitution could only be conducted by a racetrack that on or before September 1, 2011 was licensed to conduct video lottery gaming provided that the conduct of casino gaming occurs only at the premises or a contiguous premises where video lottery gaming was authorized to be conducted. The net proceeds from casino gaming must be applied exclusively to support education except that 10% of such funds could be used for the support of local government in the host communities as prescribed by the local legislative body.
The bill further provides that as consideration for the operation of casino gaming that the state Gaming Commission shall require an investment in the horse racing industry of a portion of the vendor fee retained by the gambling facility. In this regard, any gambling facility located within a 40 mile radius of a regional racetrack must dedicate 7 1/2% of its total revenue after payout of prizes to the enhancement of purses at such track during such time that the racetrack is conducting a live race meeting. These payments, though, could not be less than any purse enhancement payments received by the racetrack from the conduct of video lottery gaming in calendar year 2012.
In addition, each gambling facility would have to pay 4% of its vendor fee after pay-out of prizes to a regional track located within a 40 mile radius for capital expenditures at such track when the racetrack is conducting a live race meeting. Furthermore, 1 1/2% of total revenue wagered at the gambling facility after pay-out of prizes must be distributed to the appropriate breeding fund. Whenever two or more regional tracks are located within a 40 mile radius of a casino and are both conducting a live race meeting the racing support payments would be apportioned equally. Similarly, if two or more casinos are located within the 40 mile radius of a regional track the racing support payments would be apportioned equally.
Finally, the bill provides that for the purposes of its provisions the term "regional track" would also encompass a gambling facility that
also conducts live horse racing pursuant to Article 2, 3 and 4 of the Racing, Pari-Mutuel Wagering and Breeding Law.
JUSTIFICATION: Since 2001, the framework for expanding casino gaming in New York has been in place, namely the nine racetracks that conduct video lottery gaming at their facilities throughout the state. They have the infrastructure to support expanded gaming and, thus, are the logical sites for commercial casinos. These racinos, which employ over 5,000 persons, have been dependable partners for the state, having generated four billion dollars in education aid since 2004 and through their racing support payments have helped revitalize the racing industry in the state through expanded purse levels and breeder awards.
Indeed, the equine industry in New York generates an economic impact in New York of $42 billion (2011 figures) resulting in close to 33,000 full-time jobs. Breeders, trainers, and owners of racehorses account for 64% of the direct economic impact and 52% of the jobs. The state's eleven major racetracks generate 23% of the total economic impact with expenditures mainly funded by commissions or takeout from race wagering. Expenditures by breeders, trainers and owners are primarily funded by purses which include enhanced purses for New York bred horses. The racing support payments derived from video lottery terminals which have increased purse levels and breeder awards have resulted in growing agribusiness in the state and the breeding industry in particular. According to the Jockey Club's 2012 Report of Mares Bred, New York thoroughbred stallions covered 43.1% more mares in 2012 than in 2011. This success story, which is still in its infancy, could be endangered if commercial casinos are allowed to operate without mandated racing contributions when those casinos directly compete with live racing. Other states which have authorized commercial casinos, including Pennsylvania, Maryland, Ohio, and Massachusetts, have made allowances for gaming revenues to be invested in the racing industry. New York should do the same, and this bill accomplishes that goal.
EFFECTS OF PRESENT LAW: The bill amends Section 1612 of the Tax Law and adds a new Section 1113 to the Racing, Pari-Mutuel and Wagering and Breeding Law.
FISCAL IMPLICATIONS: None to the State.
EFFECTIVE DATE: Immediately
STATE OF NEW YORK ________________________________________________________________________ 4173 2013-2014 Regular Sessions IN SENATE March 12, 2013 ___________Introduced by Sen. MARCHIONE -- read twice and ordered printed, and when printed to be committed to the Committee on Racing, Gaming and Wager- ing AN ACT to amend the tax law and the racing, pari-mutuel wagering and breeding law, in relation to vendor's fees THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Clause (D) of subparagraph (ii) of paragraph 1 of subdivi- sion b of section 1612 of the tax law, as amended by section 6 of part K of chapter 57 of the laws of 2010, is amended to read as follows: (D) notwithstanding clauses (A), (B) and (C) of this subparagraph, when the vendor track is located within fifteen miles of a Native Ameri- can class III gaming facility OR A GAMING FACILITY AUTHORIZED PURSUANT TO SUBDIVISION ONE OF SECTION NINE OF ARTICLE ONE OR ARTICLE FOUR OF THE STATE CONSTITUTION, at a rate of forty-one percent of the total revenue wagered at the vendor track after payout for prizes pursuant to this chapter; S 2. The racing, pari-mutuel wagering and breeding law is amended by adding a new section 1113 to read as follows: S 1113. INVESTMENT IN CERTAIN FACILITIES. 1. THE OPERATION OF CASINO GAMING AT A FACILITY PURSUANT TO SUBDIVISION ONE OF SECTION NINE OF ARTICLE ONE OF THE CONSTITUTION SHALL ONLY BE CONDUCTED BY AN ENTITY WHICH, ON OR BEFORE SEPTEMBER FIRST, TWO THOUSAND ELEVEN WAS LICENSED BY LAW THEN IN EFFECT TO CONDUCT VIDEO LOTTERY GAMING PURSUANT TO SECTION SIXTEEN HUNDRED SEVENTEEN-A OF THE TAX LAW AND ONLY UPON THE PREMISES OR A CONTIGUOUS PREMISES WHERE SUCH VIDEO LOTTERY GAMING WAS AUTHORIZED TO BE CONDUCTED. THE NET PROCEEDS DERIVED BY THE STATE FROM SUCH CASINO GAMING SHALL BE APPLIED EXCLUSIVELY TO OR IN AID OR SUPPORT OF EDUCATION IN THIS STATE AS THE LEGISLATURE MAY PRESCRIBE EXCEPT THAT NO MORE THAN TEN PERCENT OF SUCH FUNDS MAY BE USED FOR THE SUPPORT OF LOCAL GOVERN-EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08481-02-3 S. 4173 2
MENT IN THE HOST COMMUNITIES AS PRESCRIBED BY THE LOCAL LEGISLATIVE BODY. 2. AS CONSIDERATION FOR THE OPERATION OF CASINO GAMBLING AT A FACILITY PURSUANT TO SUBDIVISION ONE OF SECTION NINE OF ARTICLE ONE OF THE CONSTITUTION, THE STATE GAMING COMMISSION SHALL CAUSE THE INVESTMENT IN THE RACING INDUSTRY OF A PORTION OF THE VENDOR FEE RETAINED BY THE FACILITY IN THE MANNER SET FORTH AS FOLLOWS: (A) EACH SUCH GAMBLING FACILITY SHALL DEDICATE A PORTION OF ITS VENDOR FEE SOLELY FOR THE PURPOSE OF ENHANCING PURSES AT EACH REGIONAL TRACK LOCATED WITHIN A FORTY MILE RADIUS OF SUCH GAMBLING FACILITY IN AN AMOUNT EQUALING SEVEN AND ONE-HALF PERCENT OF TOTAL REVENUE WAGERED AT THE FACILITY AFTER PAYMENT FOR PRIZES WHEN SUCH REGIONAL TRACK IS CONDUCTING A LIVE RACE MEETING PROVIDED THAT NO REGIONAL TRACK SHALL RECEIVE RACING SUPPORT PAYMENTS FOR THE PURPOSE OF ENHANCING PURSES THAT IS LESS THAN THE PURSE ENHANCEMENTS RECEIVED IN CALENDAR YEAR TWO THOU- SAND TWELVE AS CONSIDERATION FOR THE OPERATION OF VIDEO LOTTERY GAMING PURSUANT TO SECTION SIXTEEN HUNDRED TWELVE OF THE TAX LAW; AND (B) EACH SUCH GAMBLING FACILITY SHALL DEDICATE A PORTION OF ITS VENDOR FEE SOLELY FOR THE PURPOSE OF RACING OPERATIONS OR CAPITAL EXPENDITURES AT EACH REGIONAL TRACK LOCATED WITHIN A FORTY MILE RADIUS OF SUCH GAMBL- ING FACILITY IN AN AMOUNT EQUALING FOUR PERCENT OF TOTAL REVENUE WAGERED AFTER PAYOUT FOR PRIZES WHEN SUCH REGIONAL TRACK IS CONDUCTING A LIVE RACE MEETING. IN ADDITION, ONE AND ONE-HALF PERCENT OF TOTAL REVENUE WAGERED AT THE GAMBLING FACILITY AFTER PAY-OUT FOR PRIZES SHALL BE DISTRIBUTED TO THE APPROPRIATE BREEDING FUND FOR THE MANNER OF RACING CONDUCTED BY SUCH TRACK. 3. IN THE EVENT TWO OR MORE REGIONAL TRACKS ARE LOCATED WITHIN THE FORTY MILE RADIUS OF THE CASINO GAMBLING FACILITY AND ARE CONDUCTING A LIVE RACE MEETING, THE RACING SUPPORT PAYMENTS PROVIDED FOR IN SUBDIVI- SION TWO OF THIS SECTION SHALL BE APPORTIONED EQUALLY. 4. IN THE EVENT TWO OR MORE GAMBLING FACILITIES ARE LOCATED WITHIN THE FORTY MILE RADIUS OF A REGIONAL TRACK THE RACING SUPPORT PAYMENTS SHOULD BE APPORTIONED EQUALLY. 5. FOR THE PURPOSE OF THIS SECTION THE TERM "REGIONAL TRACK" SHALL ALSO MEAN A GAMBLING FACILITY WHICH CONDUCTS A LIVE RACE MEETING PURSU- ANT TO ARTICLES TWO, THREE AND FOUR OF THIS CHAPTER. S 3. This act shall take effect immediately.