Governor Eliot Spitzer

Governor Eliot Spitzer

Skip Dickstein

New York Governor Vetoes Rebate Legislation

New York Gov. Eliot Spitzer vetoed legislation that would have made it easier for tracks and off-track betting corporations to begin bettor rebate programs.

New York Gov. Eliot Spitzer has vetoed legislation advocates said would have made it easier for tracks and off-track betting corporations to begin bettor rebate programs as a way to compete with off-shore entities and others in the pari-mutuel wagering industry.

The Democratic governor said the statutory framework the bill sought to establish to likely permit an increase in rebate programs was “poorly drafted and confusing." He said the measure’s implementation by state racing regulators, as well as the pari-mutuel industry, would have been difficult under the legislation.

The bill’s sponsors said there is no clear standard for authorizing rewards and other programs for tracks to help them compete with other racing programs around the country as well as casinos.

The rebate could have included a reduction in pari-mutuel takeout, adding a bonus on winnings or awards of merchandise and services. The state has approved a rewards programs for the New York Racing Association and the New York City Off -Track Betting Corp; both require annual reviews and approvals by the New York State Racing and Wagering Board.

The governor, in his veto message released Aug. 2, said the measure’s three different definitions for what constitutes a rebate would be unworkable and not of benefit to the state or the industry in implementing programs. Moreover, he said it is unclear the bill is even needed since the racing board already approved rewards programs for NYRA and NYCOTB.

“I share the desire of the sponsors of this bill to help New York state’s racing industry remain competitive with foreign racing interests," Spitzer said. "However, that desire must be tempered by the need to enact laws that are necessary and can be understood by all those subject to its terms. This bill does not meet that test."

The governor signed into law legislation increasing the amount of money Thoroughbred owners pay from purses to the New York Thoroughbred Horsemen’s Association. The one-year increase will bring in about $2.4 million – double the current level – that goes from purses to the group that represents horsemen at NYRA tracks.

The new law increases from 1% to 2% the amount owners must pay out of purse awards to the horsemen’s group. By law, the purse money can go toward paying the group’s administration, benevolence activities, or for equine research. The bill doesn’t affect the purse money received by owners at Finger Lakes Gaming and Racetrack.

"The NYRA bankruptcy proceeding has necessitated that the New York Thoroughbred Horsemen's Association hire legal counsel to protect its members creditor interests in this court proceeding," according to a legislative memo accompanying the legislation.

"Since the association needs to devote a substantial amount of money to pay for legal costs in the bankruptcy proceeding, the amount of money devoted to the association’s benevolent activities has needed to be curtailed. This bill will shift additional purse funds, in the amount of approximately $1 million, to the association so that it can continue to provide very much needed benevolent support to NYRA's backstretch workers,'' the memo said.