NY Governor Facing Deadline on Rebate Law

Legislation to authorize a statewide standard for rebate programs at New York tracks and off-track betting corporations is before Gov. Andrew Cuomo for his approval or veto.

The measure, passed overwhelmingly in both houses last June, must be acted upon by midnight on Nov. 13.

Sponsors say the legislation would end the state's ad hoc system for approving temporary and often track-specific rebate programs, replacing it with a permanent program approved by the state's Gaming Commission. Further, they say it will help New York tracks and OTBs better compete with off-of-state betting houses.

"Off-shore 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,'' it adds.

Current state law allows the Gaming Commission to approve short-term or meet-specific rebate programs. The measure, sponsored by Senate co-leader Jeff Klein, a Bronx Democrat, and Assembly Racing and Wagering Committee Chairman Gary Pretlow, a Westchester County Democrat, would create an overall statutory framework for the Gaming Commission to devise a new statewide rebate system.

In addition to permitting tracks and OTBs to establish rebate programs, it defines rebates as a reduction in 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.''

A specific rebate program for a track could, under the legislation, last for up to one year before needing approval again by the state; it also gives some flexibility to the state regulatory agency to amend rebate rules to take into account changes in the betting industry.

To get a rebate program renewed, the legislation requires tracks and OTBs to disclose the monetary value of rebates offered in the previous year and the terms upon which they were provided to bettors. Applicants must assure that the rebates are determined "solely'' by how much a bettor wagers, the amount payable to the track or OTB each year or how frequently the person wagers. Records on rebates would have to be kept for three years and tracks and OTBs would have to demonstrate "that such rebates are in the best interests of horse racing.''

If approved, the law would take effect in six months.

A similar bill was vetoed in 2007 by then-Gov. Eliot Spitzer, who at the time said that measure was "poorly drafted and confusing'' and he questioned whether it was even necessary. Sponsors of the new measure said they have amended that 2007 legislation to address those concerns at the time.