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New York Tax - Article 34 - § 1612 Disposition of RevenuesLegal Research Home > New York Laws > Tax > New York Tax - Article 34 - § 1612 Disposition of Revenues
§ 1612. Disposition of revenues. a. The division shall pay into an
account, to be known as the lottery prize account, under the joint
custody of the comptroller and the commissioner, within one week after
collection of sales receipts from a lottery game, such moneys necessary
for the payment of lottery prizes but not to exceed the following
percentages, plus interest earned thereon:
(1) sixty percent of the total amount for which tickets have been sold
for a lawful lottery game introduced on or after the effective date of
this paragraph, subject to the following provisions:
(A) such game shall be available only on premises occupied by licensed
lottery sales agents, subject to the following provisions:
(i) if the licensee holds a license issued pursuant to the alcoholic
beverage control law to sell alcoholic beverages for consumption on the
premises, then not less than twenty-five percent of the gross sales must
result from sales of food;
(ii) if the licensee does not hold a license issued pursuant to the
alcoholic beverage control law to sell alcoholic beverages for
consumption on the premises, then the premises must have a minimum
square footage greater than two thousand five hundred square feet;
(iii) notwithstanding the foregoing provisions, television equipment
that automatically displays the results of such drawings may be
installed and used without regard to the percentage of food sales or the
square footage if such premises are used as:
(I) a commercial bowling establishment, or
(II) a facility authorized under the racing, pari-mutuel wagering and
breeding law to accept pari-mutuel wagers;
(B) the rules for the operation of such game shall be as prescribed by
regulations promulgated and adopted by the division, provided however,
that such rules shall provide that no person under the age of twenty-one
may participate in such games on the premises of a licensee who holds a
license issued pursuant to the alcoholic beverage control law to sell
alcoholic beverages for consumption on the premises; and, provided,
further, that such regulations may be revised on an emergency basis not
later than ninety days after the enactment of this paragraph in order to
conform such regulations to the requirements of this paragraph; or
(2) sixty-five percent of the total amount for which tickets have been
sold for the "Instant Cash" game in which the participant purchases a
preprinted ticket on which dollar amounts or symbols are concealed on
the face or the back of such ticket, provided however up to five new
games may be offered during the fiscal year, seventy-five percent of the
total amount for which tickets have been sold for such five games in
which the participant purchases a preprinted ticket on which dollar
amounts or symbols are concealed on the face or the back of such ticket;
or
(3) fifty-five percent of the total amount for which tickets have been
sold for any joint, multi-jurisdiction, and out-of-state lottery except
as otherwise provided in paragraph one of subdivision b of this section
for any joint, multi-jurisdiction, out-of-state video lottery gaming; or
(4) fifty percent of the total amount for which tickets have been sold
for games known as: (A) the "Daily Numbers Game" or "Win 4", discrete
games in which the participants select no more than three or four of
their own numbers to match with three or four numbers drawn by the
division for purposes of determining winners of such games, (B) "Pick
10", offered no more than once daily, in which participants select from
a specified field of numbers a subset of ten numbers to match against a
subset of numbers to be drawn by the division from such field of numbers
for the purpose of determining winners of such game, (C) "Take 5",
offered no more than once daily, in which participants select from a
specified field of numbers a subset of five numbers to match against a
subset of five numbers to be drawn by the division from such field of
numbers for purposes of determining winners of such game; or
(5) forty percent of the total amount for which tickets have been sold
for: (A) "Lotto", offered no more than once daily, a discrete game in
which all participants select a specific subset of numbers to match a
specific subset of numbers, as prescribed by rules and regulations
promulgated and adopted by the division, from a larger specific field of
numbers, as also prescribed by such rules and regulations and (B) with
the exception of the game described in paragraph one of this
subdivision, such other state-operated lottery games which the division
may introduce, offered no more than once daily, commencing on or after
forty-five days following the official publication of the rules and
regulations for such game.
The moneys in the lottery prize account shall be paid out of such
account on the audit and warrant of the comptroller on vouchers
certified or approved by the director or his or her duly designated
official.
Prize money derived from ticket sales receipts of a particular game
and deposited in the lottery prize account in accordance with the
percentages set forth above may be used to pay prizes in such game.
Balances in the lottery prize account identified by individual games may
be carried over from one fiscal year to the next to ensure proper payout
of games.
b. 1. Notwithstanding section one hundred twenty-one of the state
finance law, on or before the twentieth day of each month, the division
shall pay into the state treasury, to the credit of the state lottery
fund created by section ninety-two-c of the state finance law, not less
than forty-five percent of the total amount for which tickets have been
sold for games defined in paragraph four of subdivision a of this
section during the preceding month, not less than thirty-five percent of
the total amount for which tickets have been sold for games defined in
paragraph three of subdivision a of this section during the preceding
month, not less than twenty percent of the total amount for which
tickets have been sold for games defined in paragraph two of subdivision
a of this section during the preceding month, provided however that for
games with a prize payout of seventy-five percent of the total amount
for which tickets have been sold, the division shall pay not less than
ten percent of sales into the state treasury and not less than
twenty-five percent of the total amount for which tickets have been sold
for games defined in paragraph one of subdivision a of this section
during the preceding month; and the balance of the total revenue after
payout for prizes for games known as "video lottery gaming," including
any joint, multi-jurisdiction, and out-of-state video lottery gaming,
(i) less ten percent of the total revenue wagered after payout for
prizes to be retained by the division for operation, administration, and
procurement purposes; (ii) less a vendor's fee the amount of which is to
be paid for serving as a lottery agent to the track operator of a vendor
track:
(A) having fewer than one thousand one hundred video gaming machines,
at a rate of thirty-five percent for the first fifty million dollars
annually, twenty-eight percent for the next hundred million dollars
annually, and twenty-five percent thereafter of the total revenue
wagered at the vendor track after payout for prizes pursuant to this
chapter;
(B) having one thousand one hundred or more video gaming machines, at
a rate of thirty-one percent of the total revenue wagered at the vendor
track after payout for prizes pursuant to this chapter, except for such
facility located in the county of Westchester, in which case the rate
shall be thirty percent until March thirty-first, two thousand twelve.
Notwithstanding the foregoing, not later than April first, two
thousand twelve, the vendor fee shall become thirty-one percent and
remain at that level thereafter; and except for Aqueduct racetrack, in
which case the vendor fee shall be thirty-eight percent of the total
revenue wagered at the vendor track after payout for prizes pursuant to
this chapter;
(C) notwithstanding clauses (A) and (B) of this subparagraph, when the
vendor track is located in an area with a population of less than one
million within the forty mile radius around such track, at a rate of
thirty-nine percent for the first fifty million dollars annually,
twenty-eight percent for the next hundred million dollars annually, and
twenty-five percent thereafter of the total revenue wagered at the
vendor track after payout for prizes pursuant to this chapter;
(D) notwithstanding clauses (A), (B) and (C) of this subparagraph,
when the vendor track is located within fifteen miles of a Native
American class III gaming facility at a rate of forty-one percent of the
total revenue wagered at the vendor track after payout for prizes
pursuant to this chapter;
(E) notwithstanding clauses (A), (B), (C) and (D) of this
subparagraph, when a Native American class III gaming facility is
established, after the effective date of this subparagraph, within
fifteen miles of the vendor track, at a rate of forty-one percent of the
total revenue wagered after payout for prizes pursuant to this chapter;
(E-1) for purposes of this subdivision, the term "class III gaming"
shall have the meaning defined in 25 U.S.C. § 2703(8).
(F) notwithstanding clauses (A), (B), (C), (D) and (E) of this
subparagraph, when a vendor track, is located in Sullivan county and
within sixty miles from any gaming facility in a contiguous state such
vendor fee shall, for a period of five years commencing April first, two
thousand eight, be at a rate of forty-one percent of the total revenue
wagered at the vendor track after payout for prizes pursuant to this
chapter, after which time such rate shall be as for all tracks in clause
(C) of this subparagraph.
(G) notwithstanding clauses (A), (B), (C), (D), (E) and (F) of this
subparagraph, when no more than one vendor track located in the town of
Thompson in Sullivan county at the site of the former Concord Resort at
which a qualified capital investment has been made and no fewer than one
thousand full-time, permanent employees have been newly hired, is
located in Sullivan county and is within sixty miles from any gaming
facility in a contiguous state, then for a period of forty years the
vendor's fee shall equal the total revenue wagered at the vendor track
after payout of prizes pursuant to this subdivision reduced by the
greater of (i) twenty-five percent of total revenue after payout for
prizes for "video lottery games" or (ii) for the first eight years of
operation thirty-eight million dollars, and beginning in the ninth year
of operation such amount shall increase annually by the lesser of the
increase in the consumer price index or two percent, plus seven percent
of total revenue after payout of prizes. In addition, in the event the
vendor fee is calculated pursuant to subclause (i) of this clause, the
vendor's fee shall be further reduced by 11.11 percent of the amount by
which total revenue after payout for prizes exceeds two hundred fifteen
million dollars, but in no event shall such reduction exceed five
million dollars.
Provided, however, that in the case of no more than one vendor track
located in the town of Thompson in Sullivan county at the site of the
former Concord Resort with a qualified capital investment, and one
thousand full-time, permanent employees if at any time after three years
of opening operations of the licensed video gaming facility or licensed
vendor track, the vendor track experiences an employment shortfall, then
the recapture amount shall apply, for only such period as the shortfall
exists.
For the purposes of this section "qualified capital investment" shall
mean an investment of a minimum of six hundred million dollars as
reflected by audited financial statements of which not less than three
hundred million dollars shall be comprised of equity and/or mezzanine
financing as an initial investment in a county where twelve percent of
the population is below the federal poverty level as measured by the
most recent Bureau of Census Statistics prior to the qualified capital
investment commencing that results in the construction, development or
improvement of at least one eighteen hole golf course, and the
construction and issuance of certificates of occupancy for hotels,
lodging, spas, dining, retail and entertainment venues, parking garages
and other capital improvements at or adjacent to the licensed video
gaming facility or licensed vendor track which promote or encourage
increased attendance at such facilities.
For the purposes of this section, "full-time, permanent employee"
shall mean an employee who has worked at the video gaming facility,
vendor track or related and adjacent facilities for a minimum of
thirty-five hours per week for not less than four consecutive weeks and
who is entitled to receive the usual and customary fringe benefits
extended to other employees with comparable rank and duties; or two
part-time employees who have worked at the video gaming facility, vendor
track or related and adjacent facilities for a combined minimum of
thirty-five hours per week for not less than four consecutive weeks and
who are entitled to receive the usual and customary fringe benefits
extended to other employees with comparable rank and duties.
For the purpose of this section "employment goal" shall mean one
thousand five hundred full-time permanent employees after three years of
opening operations of the licensed video gaming facility or licensed
vendor track.
For the purpose of this section "employment shortfall" shall mean a
level of employment that falls below the employment goal, as certified
annually by vendor's certified accountants and the chairman of the
empire state development corporation.
For the purposes of this section "recapture amount" shall mean the
difference between the amount of the vendor's fee paid to a vendor track
with a qualified capital investment, and the vendor fee otherwise
payable to a vendor track pursuant to clause (F) of this subparagraph,
that is reimbursable by the vendor track to the division for payment
into the state treasury, to the credit of the state lottery fund created
by section ninety-two-c of the state finance law, due to an employment
shortfall pursuant to the following schedule only for the period of the
employment shortfall:
(i) one hundred percent of the recapture amount if the employment
shortfall is greater than sixty-six and two-thirds percent of the
employment goal;
(ii) seventy-five percent of the recapture amount if the employment
shortfall is greater than thirty-three and one-third percent of the
employment goal;
(iii) forty-nine and one-half percent of the recapture amount if the
employment shortfall is greater than thirty percent of the employment
goal;
(iv) twenty-two percent of the recapture amount if the employment
shortfall is greater than twenty percent of the employment goal;
(v) eleven percent of the recapture amount if the employment shortfall
is greater than ten percent of the employment goal.
(H) notwithstanding clauses (A), (B), (C), (D), (E), (F) and (G) of
this subparagraph, the track operator of a vendor track shall be
eligible for a vendor's capital award of up to four percent of the total
revenue wagered at the vendor track after payout for prizes pursuant to
this chapter, which shall be used exclusively for capital project
investments to improve the facilities of the vendor track which promote
or encourage increased attendance at the video lottery gaming facility
including, but not limited to hotels, other lodging facilities,
entertainment facilities, retail facilities, dining facilities, events
arenas, parking garages and other improvements that enhance facility
amenities; provided that such capital investments shall be approved by
the division, in consultation with the state racing and wagering board,
and that such vendor track demonstrates that such capital expenditures
will increase patronage at such vendor track's facilities and increase
the amount of revenue generated to support state education programs. The
annual amount of such vendor's capital awards that a vendor track shall
be eligible to receive shall be limited to two million five hundred
thousand dollars, except for Aqueduct racetrack, for which there shall
be no vendor's capital awards. Except for tracks having less than one
thousand one hundred video gaming machines, each track operator shall be
required to co-invest an amount of capital expenditure equal to its
cumulative vendor's capital award. For all tracks, except for Aqueduct
racetrack, the amount of any vendor's capital award that is not used
during any one year period may be carried over into subsequent years
ending before April first, two thousand thirteen. Any amount
attributable to a capital expenditure approved prior to April first, two
thousand thirteen and completed before April first, two thousand fifteen
shall be eligible to receive the vendor's capital award. In the event
that a vendor track's capital expenditures, approved by the division
prior to April first, two thousand thirteen and completed prior to April
first, two thousand fifteen, exceed the vendor track's cumulative
capital award during the five year period ending April first, two
thousand thirteen, the vendor shall continue to receive the capital
award after April first, two thousand thirteen until such approved
capital expenditures are paid to the vendor track subject to any
required co-investment. In no event shall any vendor track that receives
a vendor fee pursuant to clause (F) or (G) of this subparagraph be
eligible for a vendor's capital award under this section. Any operator
of a vendor track which has received a vendor's capital award, choosing
to divest the capital improvement toward which the award was applied,
prior to the full depreciation of the capital improvement in accordance
with generally accepted accounting principles, shall reimburse the state
in amounts equal to the total of any such awards. Any capital award not
approved for a capital expenditure at a video lottery gaming facility by
April first, two thousand thirteen shall be deposited into the state
lottery fund for education aid; and
(I) Notwithstanding any provision of law to the contrary, free play
allowance credits authorized by the division pursuant to subdivision f
of section sixteen hundred seventeen-a of this article shall not be
included in the calculation of the total amount wagered on video lottery
games, the total amount wagered after payout of prizes, the vendor fees
payable to the operators of video lottery facilities, vendor's capital
awards, fees payable to the division's video lottery gaming equipment
contractors, or racing support payments.
(iii) less an additional vendor's marketing allowance at a rate of ten
percent for the first one hundred million dollars annually and eight
percent thereafter of the total revenue wagered at the vendor track
after payout for prizes to be used by the vendor track for the marketing
and promotion and associated costs of its video lottery gaming
operations and pari-mutuel horse racing operations, as long as any such
costs associated with pari-mutuel horse racing operations simultaneously
encourage increased attendance at such vendor's video lottery gaming
facilities, consistent with the customary manner of marketing comparable
operations in the industry and subject to the overall supervision of the
division; provided, however, that the additional vendor's marketing
allowance shall not exceed eight percent in any year for any operator of
a racetrack located in the county of Westchester or Queens; provided,
however, a vendor track that receives a vendor fee pursuant to clause
(G) of subparagraph (ii) of this paragraph shall not receive the
additional vendor's marketing allowance. In establishing the vendor fee,
the division shall ensure the maximum lottery support for education
while also ensuring the effective implementation of section sixteen
hundred seventeen-a of this article through the provision of reasonable
reimbursements and compensation to vendor tracks for participation in
such program. Within twenty days after any award of lottery prizes, the
division shall pay into the state treasury, to the credit of the state
lottery fund, the balance of all moneys received from the sale of all
tickets for the lottery in which such prizes were awarded remaining
after provision for the payment of prizes as herein provided. Any
revenues derived from the sale of advertising on lottery tickets shall
be deposited in the state lottery fund.
2. As consideration for the operation of a video lottery gaming
facility, the division, shall cause the investment in the racing
industry of a portion of the vendor fee received pursuant to paragraph
one of this subdivision in the manner set forth in this subdivision.
With the exception of Aqueduct racetrack, each such track shall dedicate
a portion of its vendor fees, received pursuant to clause (A), (B), (C),
(D), (E), (F), or (G) of subparagraph (ii) of paragraph one of this
subdivision, solely for the purpose of enhancing purses at such track,
in an amount equal to eight and three-quarters percent of the total
revenue wagered at the vendor track after pay out for prizes. In
addition, with the exception of Aqueduct racetrack, one and one-quarter
percent of total revenue wagered at the vendor track after pay out for
prizes, received pursuant to clause (A), (B), (C), (D), (E), (F), or (G)
of subparagraph (ii) of paragraph one of this subdivision, shall be
distributed to the appropriate breeding fund for the manner of racing
conducted by such track.
Provided, further, that nothing in this paragraph shall prevent each
track from entering into an agreement, not to exceed five years, with
the organization authorized to represent its horsemen to increase or
decrease the portion of its vendor fee dedicated to enhancing purses at
such track during the years of participation by such track, or to race
fewer dates than required herein.
3. Nothing in paragraph two of this subdivision shall affect any
agreement in effect on or before the effective date of this paragraph.
c. 1. The specifications for video lottery gaming, including any
joint, multi-jurisdiction, and out-of-state video lottery gaming, shall
be designed in such a manner as to pay prizes that average no less than
ninety percent of sales.
2. Of the ten percent retained by the division for administrative
purposes, any amounts beyond that which are necessary for the operation
and administration of this pilot program shall be deposited in the
lottery education account.
d. Notwithstanding any law, rule or regulation to the contrary, any
successor to the New York Racing Association, Inc. with respect to the
operation and maintenance of video lottery gaming at Aqueduct racetrack
shall be deemed the successor to the New York Racing Association, Inc.
for purposes of being subject to existing contracts and loan agreements,
if any, entered into by the New York Racing Association, Inc. directly
related to the construction, operation, management and distribution of
revenues of the video lottery gaming facility at Aqueduct racetrack.
e. The video lottery gaming operator selected to operate a video
lottery terminal facility at Aqueduct will be subject to a memorandum of
understanding between the governor, temporary president of the senate
and the speaker of the assembly. Notwithstanding subparagraph (i) of
paragraph a of subdivision eight of section two hundred twelve of the
racing, pari-mutuel wagering and breeding law, the state, pursuant to an
agreement with the video lottery gaming operator to operate a video
lottery terminal facility at Aqueduct, may authorize, as part of such
agreement or in conjunction with such agreement at the time it is
executed, additional development at the Aqueduct racing facility. The
selection will be made in consultation with the franchised corporation,
but is not subject to such corporation's approval. The franchised
corporation shall not be eligible to compete to operate or to operate a
video lottery terminal facility at Aqueduct. The state will use its best
efforts to ensure that the video lottery terminal facility at Aqueduct
is opened as soon as is practicable and will, if practicable, pursue the
construction of a temporary video lottery terminal facility at Aqueduct
subject to staying within an agreed budget for such video lottery
terminal facility and subject to such temporary facility not having an
adverse impact on opening of the permanent facility at Aqueduct. To
facilitate the opening of the video lottery gaming facility at Aqueduct
as soon as is practicable, the division of the lottery may extend the
term of any existing contract related to the video lottery system.
f. As consideration for the operation of the video lottery gaming
facility at Aqueduct racetrack, the division shall cause the investment
in the racing industry of the following percentages of the vendor fee to
be deposited or paid, as follows:
1. Six and one-half percent of the total wagered after payout of
prizes for the first year of operation of video lottery gaming at
Aqueduct racetrack, seven percent of the total wagered after payout of
prizes for the second year of operation, and seven and one-half percent
of the total wagered after payout of prizes for the third year of
operation and thereafter, for the purpose of enhancing purses at
Aqueduct racetrack, Belmont Park racetrack and Saratoga race course.
2. One percent of the total wagered after payout of prizes for the
first year of operation of video lottery gaming at Aqueduct racetrack,
one and one-quarter percent of the total wagered after payout of prizes
for the second year of operation, and one and one-half percent of the
total wagered after payout of prizes for the third year of operation and
thereafter, for an appropriate breeding fund for the manner of racing
conducted at Aqueduct racetrack, Belmont Park racetrack and Saratoga
race course.
3. Four percent of the total revenue wagered after payout of prizes to
be deposited into an account of the franchised corporation established
pursuant to section two hundred six of the racing, pari-mutuel wagering
and breeding law to be used for capital expenditures in maintaining and
upgrading Aqueduct racetrack, Belmont Park racetrack and Saratoga race
course.
4. Three percent of the total revenue wagered after payout for prizes
to be deposited into an account of the franchised corporation
established pursuant to section two hundred six of the racing,
pari-mutuel wagering and breeding law to be used for general
thoroughbred racing operations at Aqueduct racetrack, Belmont Park
racetrack and Saratoga race course.
5. Paragraphs one, two, three and four of this subdivision shall be
known collectively as the "racing support payments".
g. In the event the state elects to construct a video lottery terminal
facility at the Aqueduct racetrack, all video lottery terminal revenues
payable to the video lottery gaming operator at the Aqueduct racetrack
remaining after payment of the racing support payments shall first be
used to repay the state's advances for (i) confirmation of the chapter
eleven plan of reorganization and cash advances for the franchised
corporation's operations following confirmation of the chapter eleven
plan of reorganization and (ii) the amount expended by the state to
construct such video lottery terminal facility at Aqueduct racetrack
pursuant to an agreement with the state. Subparagraphs (i) and (ii) of
this paragraph shall be defined as the state advance amount and the
amounts payable to the division of the lottery.
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