New York Budget Calls For Gaming Commission

Would consolidate functions of State Racing and Wagering Board an Division of Lottery

State legislators have tentatively agreed to create a New York Gaming Commission to oversee all aspects of gambling in New York, including horse racing, lotteries and Indian-run and racetrack-based casinos.

The new commission would consolidate various functions now overseen by the state Racing and Wagering Board and the Division of the Lottery. The commission’s seven-member board would, after an initial start-up period for the panel, serve for no less than five years, and have to have certain financial and background experience in regulatory oversight or management in the gambling or racing industries, though strict revolving door provisions would be established for board members.

The new commission is one of a number of budget deals that have come together in the past 24 hours at the state Capitol involving racing. They are contained in new pieces of budget legislation expected to be approved by legislators later this week.

Besides the racing commission, the emerging state budget also includes a provision to have state regulators study the impact of advance deposit wagering on the state’s racing industry, including the impact of ADW operators based out-of-state taking wagers from New Yorkers. The study is to try to determine how much New Yorkers bet on out-of-state ADW outlets. The study is due to be submitted to the governor and Legislature by Sept. 15.

Another deal would permit Suffolk Off-Track Betting Corp. to seek bankruptcy protection. The OTB’s bankruptcy petition was tossed out of a federal court because Suffolk failed to get the approval of the state Legislature.

The new gaming commission is intended to end the hodge-podge assortment of racing and gambling oversights now held by the two major regulatory agencies.

“The Legislature finds and determines that the gaming industries constitute a vital sector of New York state’s overall economy,” the new budget legislation states. “The Legislature also finds and determines that responsive, effective, innovate state gaming regulation is necessary to operate in a global, evolving and increasingly competitive marketplace.”

The legislative intent language also states the new commission is needed to “modernize and transform” current state regulatory oversight.

The new agency will possess broad new powers to monitor tracks, pari-mutuel wagering, charitable gambling and casinos, including future casinos if a push by Gov. Andrew Cuomo to permit up to seven non-Indian owned casinos is permitted. That plan needs a constitutional amendment and won’t be ready for a statewide vote until at least November 2013.

The new board’s members must have experience in or more of the areas of accounting and auditing, or corporate finance, or racing and gambling, or law enforcement or law. The governor will appoint the chairperson. They must be New York state residents, and the governor would have the power to remove board members for “inefficiency, neglect of duty or misconduct in office.” The panel’s executive director would need to be approved by the state Senate.

The powers of the agency will include conducting background checks of gambling industry employees, overseeing drug tests of horses, and operations of off-track betting corporations. Should a racetrack casino discontinue operations, the new commission could step in and run the facility or appoint a contractor.

Those barred from serving on the commission board include anyone who, during the past three years, had any direct or indirect ties to the gambling industry in New York. They would also be barred from working for any company regulated by the commission for a period of four years after leaving the board.

The commission’s activities will be funded through regulatory fees imposed on the industry, including the $10 fee imposed on every horse entered to race at a New York facility.

The budget deal also includes creation of the Office of Racing Promotion and Development, a separate and independent body to “promote the breeding of horses” and equine research. The panel will also administer the various breeding funds now spread across several different entities, such as the State Thoroughbred Breeding and Development Fund.