Clean Sweep

New York's harness tracks, with support from the State Racing and Wagering Board, suceessfully defended three claims by the state's OTB's in the Court of Appeals last week. The decision, available here in PDF form, serves partly as a succinct history of the harness tracks' attempts to be compensated for the escalating competition from off-track betting - an effort which has been largely successful over the years - and shows how they continue to cling grimly to the concessions they've won.

As recounted by departing Chief Judge Judith Kaye in the unanimous decision, the legislature, in 1973, passed a law requiring the regional OTB's to make payments to its local harness tracks to compensate them for the decrease in handle that OTB brought. Quoting from that Racing Law § 518:

It is also the intention of this article to ensure that off-track betting is conducted in a manner compatible with the well-being of the horse racing and breeding industries in this state, which industries are and should continue to be major sources of revenue to state and local government and sources of residents.

One can certainly argue whether that has been the case! Continuing, in 1984, when out-of-state simulcasting was authorized, the legislature commanded that the OTBs pay the harness tracks commissions on those wagers.

For nearly the next 20 years, the harness tracks were able to prevent the simulcasting of thoroughbred racing after 7:30 PM. And I mean, it was strictly prohibited. Didn't even matter if a race was underway - at 7:30 PM sharp, the picture switched to Yonkers, even in the middle of a stretch drive. And a vestige of that antiquated law lives on in that NYRA still may not accept any simulcast wagers after that time. I would think that NYRA would seek to finally have that overturned once the Big A is open 24/7 for slots.

And when OTB was finally permitted to accept nighttime flat racing in 2003? You guessed it - more compensation for the harness tracks; this time in the form of "maintenance of efforts" payments "to guarantee to their regional harness tracks minimum payments based upon the commissions those tracks received before the nighttime thoroughbred simulcasts were permitted."

The suit filed by the OTB's against the tracks and the Racing and Wagering Board concerned three issues by which the OTB's were seeking relief from these payments. 1) The OTB's wanted to have revenue from daytime harness racing credited towards the maintenance of efforts payments. 2) They wanted to be able to make the payments on a regional basis, rather than by individual tracks. And 3) OTB wanted to be excused to making so-called "dark day" payments, on days on which NYRA is dark, and to harness tracks who are themselves closed for the day.

As mentioned, the OTB's whiffed - strike three called. The opinion was pretty interesting to me....but then again, not much going on in the racing world these days, so maybe I'm just bored. So I'll leave it to you to read for yourself if you're so inclined. The decisions turned mainly on the Court's interpretation of the sometimes confusing language in the racing statutes.

At one point, an exasperated-sounding Chief Judge Kaye expresses her frustration with the complexity of the laws.

As the foregoing discussion demonstrates, the Racing Law remains "an imbroglio, born out of the union of diverse racing industry interests and legislative compromise" (Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471, 476 [1978]). That observation is nowhere more evident than in Racing Law § 1017, which governs distribution of wagers placed on dark days at facilities that simulcast out-of-state races.

Section 1017 itself contains one subsection, two paragraphs, six subparagraphs, 22 clauses, six subdivisions, and six tables listing percentages due for State payments (with varying percentages depending on the type of bet, race and facility). Racing Law §§ 1017 (1) (b) (5) (E), (6) (F) provide in relevant part:

"On days when a non-profit racing association is not conducting a race meeting and when a
licensed harness track is neither accepting wagers nor displaying the signal from an in-state thoroughbred corporation or association or an out-of-state thoroughbred track:

"(i) Such licensed regional harness track shall receive in lieu of any other payments on wagers placed at off-track betting facilities outside the special betting district on races conducted by an in-state thoroughbred racing corporation, two and eight-tenths percent on regular and multiple bets during a regional meeting and one and nine-tenths percent of such bets if there is no regional meeting and four and eight-tenths percent on exotic bets on days on which there is a regional meeting and three and four-tenths percent of such bets if there is no regional meeting.

Got that?