Rebate Standards Signed Into Law in New York

The New York Gaming Commission will oversee practices of tracks and OTB outlets.

New York Gov. Andrew Cuomo has signed legislation to create a statewide standard for rebate programs at racetracks and off-track betting corporations.

Supporters claim the new law will help New York better compete with out-of-state betting shops that offer more lucrative and more reliable rebate programs.

The governor said the bill has some technical problems that will make the rebate approval process "difficult to administer." The legislature has agreed to fix those issues, which Cuomo did not identify, in a separate bill when it convenes in 2014.

"On that basis, I am signing this bill," Cuomo wrote in his approval message.

The legislation is aimed at ending the state's ad hoc system for approving what has ended up being temporary and often track-specific rebate programs. The law replaces that system with a permanent program that will be established and run by the New York Gaming Commission.

"Offshore betting houses have the freedom to establish long-term betting rebate programs to secure and retain a loyal customer base. Under New York law, New York producers are not clearly allowed to establish entire race season or annual betting rebate programs to help them secure and retain a loyal customer base," states a legislative memo in support of the bill. "This bill merely authorizes New York racetrack operators and OTBs to offer their patrons the same types of rebate programs that are being offered elsewhere."

The new law kicks in six months from Nov. 14.

The measure was sponsored by Senate co-leader Jeff Klein, a Bronx Democrat, and Assembly Racing and Wagering Committee chairman Gary Pretlow, a Westchester County Democrat.

The law will create a single statewide set of rebate rules that tracks and OTBs can rely upon when crafting a rebate program. The NYGC will now be able to approve rebate programs for tracks and OTBs that will last up to one year, with renewal options.

Renewal of rebate programs will be permitted only if tracks and OTBs provide a range of information to regulators, including disclosing the monetary rebates offered during the previous year and the terms given to customers.

Rebates in New York are defined as a reduction in pari-mutuel takeout percentage, providing a bonus on winnings or awards of merchandise or services, such as meals or free parking, "to reward horse racing patrons for their participation at race meetings." To qualify, tracks and OTBs will have to demonstrate how a rebate program is "in the best interests of horse racing."