2010 New York Code
TAX - Tax
Article 34 - (1600 - 1620) NEW YORK STATE LOTTERY FOR EDUCATION
1612 - Disposition of revenues.

§  1612.  Disposition  of  revenues. a. The division shall pay into an
  account, to be known as the  lottery  prize  account,  under  the  joint
  custody  of  the comptroller and the commissioner, within one week after
  collection of sales receipts from a lottery game, such moneys  necessary
  for  the  payment  of  lottery  prizes  but  not to exceed the following
  percentages, plus interest earned thereon:
    (1) sixty percent of the total amount for which tickets have been sold
  for a lawful lottery game introduced on or after the effective  date  of
  this paragraph, subject to the following provisions:
    (A) such game shall be available only on premises occupied by licensed
  lottery sales agents, subject to the following provisions:
    (i)  if  the licensee holds a license issued pursuant to the alcoholic
  beverage control law to sell alcoholic beverages for consumption on  the
  premises, then not less than twenty-five percent of the gross sales must
  result from sales of food;
    (ii)  if  the  licensee does not hold a license issued pursuant to the
  alcoholic  beverage  control  law  to  sell  alcoholic   beverages   for
  consumption  on  the  premises,  then  the  premises must have a minimum
  square footage greater than two thousand five hundred square feet;
    (iii) notwithstanding the foregoing provisions,  television  equipment
  that  automatically  displays  the  results  of  such  drawings  may  be
  installed and used without regard to the percentage of food sales or the
  square footage if such premises are used as:
    (I) a commercial bowling establishment, or
    (II) a facility authorized under the racing, pari-mutuel wagering  and
  breeding law to accept pari-mutuel wagers;
    (B) the rules for the operation of such game shall be as prescribed by
  regulations  promulgated  and adopted by the division, provided however,
  that such rules shall provide that no person under the age of twenty-one
  may participate in such games on the premises of a licensee who holds  a
  license  issued  pursuant  to the alcoholic beverage control law to sell
  alcoholic beverages for consumption  on  the  premises;  and,  provided,
  further,  that such regulations may be revised on an emergency basis not
  later than ninety days after the enactment of this paragraph in order to
  conform such regulations to the requirements of this paragraph; or
    (2) sixty-five percent of the total amount for which tickets have been
  sold for the "Instant Cash" game in which the  participant  purchases  a
  preprinted  ticket  on  which dollar amounts or symbols are concealed on
  the face or the back of such ticket, provided however up to  three  such
  games may be offered during the fiscal year, seventy-five percent of the
  total  amount  for  which tickets have been sold for such three games in
  which the participant purchases a  preprinted  ticket  on  which  dollar
  amounts or symbols are concealed on the face or the back of such ticket;
  or
    (3) fifty percent of the total amount for which tickets have been sold
  for  games  known  as: (A) the "Daily Numbers Game" or "Win 4", discrete
  games in which the participants select no more than  three  or  four  of
  their  own  numbers  to  match  with  three or four numbers drawn by the
  division for purposes of determining winners of such  games,  (B)  "Pick
  10",  offered no more than once daily, in which participants select from
  a specified field of numbers a subset of ten numbers to match against  a
  subset of numbers to be drawn by the division from such field of numbers
  for  the  purpose  of  determining  winners  of such game, (C) "Take 5",
  offered no more than once daily, in which  participants  select  from  a
  specified  field  of numbers a subset of five numbers to match against a
  subset of five numbers to be drawn by the division from  such  field  of
  numbers  for  purposes  of determining winners of such game, and (D) any
  joint, multi-jurisdiction, and out-of-state lottery; or

(4) forty percent of the total amount for which tickets have been sold
  for: (A) "Lotto", offered no more than once daily, a  discrete  game  in
  which  all  participants  select a specific subset of numbers to match a
  specific subset of numbers,  as  prescribed  by  rules  and  regulations
  promulgated and adopted by the division, from a larger specific field of
  numbers,  as  also prescribed by such rules and regulations and (B) with
  the  exception  of  the  game  described  in  paragraph  one   of   this
  subdivision,  such other state-operated lottery games which the division
  may introduce, offered no more than once daily, commencing on  or  after
  forty-five  days  following  the  official  publication of the rules and
  regulations for such game.
    The moneys in the lottery prize account shall  be  paid  out  of  such
  account  on  the  audit  and  warrant  of  the  comptroller  on vouchers
  certified or approved by the director or  his  or  her  duly  designated
  official.
    Prize  money  derived  from ticket sales receipts of a particular game
  and deposited in the  lottery  prize  account  in  accordance  with  the
  percentages  set  forth  above  may  be used to pay prizes in such game.
  Balances in the lottery prize account identified by individual games may
  be carried over from one fiscal year to the next to ensure proper payout
  of games.
    b. 1. Notwithstanding section one  hundred  twenty-one  of  the  state
  finance  law, on or before the twentieth day of each month, the division
  shall pay into the state treasury, to the credit of  the  state  lottery
  fund  created by section ninety-two-c of the state finance law, not less
  than forty-five percent of the total amount for which tickets have  been
  sold  for  games  defined  in  paragraph  four  of subdivision a of this
  section during the preceding month, not less than thirty-five percent of
  the total amount for which tickets have been sold for games  defined  in
  paragraph  three  of  subdivision a of this section during the preceding
  month, not less than twenty  percent  of  the  total  amount  for  which
  tickets have been sold for games defined in paragraph two of subdivision
  a  of this section during the preceding month, provided however that for
  games with a prize payout of seventy-five percent of  the  total  amount
  for  which  tickets have been sold, the division shall pay not less than
  ten percent  of  sales  into  the  state  treasury  and  not  less  than
  twenty-five percent of the total amount for which tickets have been sold
  for  games  defined  in  paragraph  one of subdivision a of this section
  during the preceding month; and the balance of the total  revenue  after
  payout  for  prizes  for games known as "video lottery gaming," (i) less
  ten percent of the total revenue wagered after payout for prizes  to  be
  retained  by the division for operation, administration, and procurement
  purposes;
    (ii) less a vendor's fee the amount of which is to be paid for serving
  as a lottery agent to the track operator of a vendor track:
    (A) having fewer than one thousand one hundred video gaming  machines,
  at  a  rate  of  thirty-five percent for the first fifty million dollars
  annually, twenty-eight percent for  the  next  hundred  million  dollars
  annually,  and  twenty-five  percent  thereafter  of  the  total revenue
  wagered at the vendor track after payout for  prizes  pursuant  to  this
  chapter;
    (B)  having one thousand one hundred or more video gaming machines, at
  a rate of thirty-one percent of the total revenue wagered at the  vendor
  track  after payout for prizes pursuant to this chapter, except for such
  facility located in the county of Westchester, in which  case  the  rate
  shall be thirty percent until March thirty-first, two thousand twelve.
    Notwithstanding  the  foregoing,  not  later  than  April  first,  two
  thousand twelve, the vendor fee  shall  become  thirty-one  percent  and

remain  at  that level thereafter; and except for Aqueduct racetrack, in
  which case the vendor fee shall be thirty-eight  percent  of  the  total
  revenue  wagered at the vendor track after payout for prizes pursuant to
  this chapter;
    (C) notwithstanding clauses (A) and (B) of this subparagraph, when the
  vendor  track  is  located in an area with a population of less than one
  million within the forty mile radius around such track,  at  a  rate  of
  thirty-nine  percent  for  the  first  fifty  million  dollars annually,
  twenty-eight percent for the next hundred million dollars annually,  and
  twenty-five  percent  thereafter  of  the  total  revenue wagered at the
  vendor track after payout for prizes pursuant to this chapter;
    (D) notwithstanding clauses (A), (B) and  (C)  of  this  subparagraph,
  when  the  vendor  track  is  located  within  fifteen miles of a Native
  American class III gaming facility at a rate of forty-one percent of the
  total revenue wagered at  the  vendor  track  after  payout  for  prizes
  pursuant to this chapter;
    (E)   notwithstanding   clauses   (A),   (B),  (C)  and  (D)  of  this
  subparagraph, when a  Native  American  class  III  gaming  facility  is
  established,  after  the  effective  date  of  this subparagraph, within
  fifteen miles of the vendor track, at a rate of forty-one percent of the
  total revenue wagered after payout for prizes pursuant to this chapter;
    (E-1) for purposes of this subdivision, the term  "class  III  gaming"
  shall have the meaning defined in 25 U.S.C. § 2703(8).
    (F)  notwithstanding  clauses  (A),  (B),  (C),  (D)  and  (E) of this
  subparagraph, when a vendor track, is located  in  Sullivan  county  and
  within  sixty  miles from any gaming facility in a contiguous state such
  vendor fee shall, for a period of five years commencing April first, two
  thousand eight, be at a rate of forty-one percent of the  total  revenue
  wagered  at  the  vendor  track after payout for prizes pursuant to this
  chapter, after which time such rate shall be as for all tracks in clause
  (C) of this subparagraph.
    (G) notwithstanding clauses (A), (B), (C), (D), (E) and  (F)  of  this
  subparagraph,  when no more than one vendor track located in the town of
  Thompson in Sullivan county at the site of the former Concord Resort  at
  which a qualified capital investment has been made and no fewer than one
  thousand  full-time,  permanent  employees  have  been  newly  hired, is
  located in Sullivan county and is within sixty  miles  from  any  gaming
  facility  in  a  contiguous  state, then for a period of forty years the
  vendor's fee shall equal the total revenue wagered at the  vendor  track
  after  payout  of  prizes  pursuant  to  this subdivision reduced by the
  greater of (i) twenty-five percent of total  revenue  after  payout  for
  prizes  for  "video  lottery games" or (ii) for the first eight years of
  operation thirty-eight million dollars, and beginning in the ninth  year
  of  operation  such  amount shall increase annually by the lesser of the
  increase in the consumer price index or two percent, plus seven  percent
  of  total  revenue after payout of prizes. In addition, in the event the
  vendor fee is calculated pursuant to subclause (i) of this  clause,  the
  vendor's  fee shall be further reduced by 11.11 percent of the amount by
  which total revenue after payout for prizes exceeds two hundred  fifteen
  million  dollars,  but  in  no  event  shall  such reduction exceed five
  million dollars.
    Provided, however, that in the case of no more than one  vendor  track
  located  in  the  town of Thompson in Sullivan county at the site of the
  former Concord Resort with  a  qualified  capital  investment,  and  one
  thousand full-time, permanent employees if at any time after three years
  of  opening operations of the licensed video gaming facility or licensed
  vendor track, the vendor track experiences an employment shortfall, then

the recapture amount shall apply, for only such period as the  shortfall
  exists.
    For  the purposes of this section "qualified capital investment" shall
  mean an investment of a  minimum  of  six  hundred  million  dollars  as
  reflected  by  audited financial statements of which not less than three
  hundred million dollars shall be comprised of  equity  and/or  mezzanine
  financing  as  an initial investment in a county where twelve percent of
  the population is below the federal poverty level  as  measured  by  the
  most  recent  Bureau of Census Statistics prior to the qualified capital
  investment commencing that results in the construction,  development  or
  improvement  of  at  least  one  eighteen  hole  golf  course,  and  the
  construction and issuance  of  certificates  of  occupancy  for  hotels,
  lodging,  spas, dining, retail and entertainment venues, parking garages
  and other capital improvements at or  adjacent  to  the  licensed  video
  gaming  facility  or  licensed  vendor  track which promote or encourage
  increased attendance at such facilities.
    For the purposes of  this  section,  "full-time,  permanent  employee"
  shall  mean  an  employee  who  has worked at the video gaming facility,
  vendor track or  related  and  adjacent  facilities  for  a  minimum  of
  thirty-five  hours per week for not less than four consecutive weeks and
  who is entitled to receive  the  usual  and  customary  fringe  benefits
  extended  to  other  employees  with  comparable rank and duties; or two
  part-time employees who have worked at the video gaming facility, vendor
  track or related and adjacent  facilities  for  a  combined  minimum  of
  thirty-five  hours per week for not less than four consecutive weeks and
  who are entitled to receive the  usual  and  customary  fringe  benefits
  extended to other employees with comparable rank and duties.
    For  the  purpose  of  this  section  "employment goal" shall mean one
  thousand five hundred full-time permanent employees after three years of
  opening operations of the licensed video  gaming  facility  or  licensed
  vendor track.
    For  the  purpose  of this section "employment shortfall" shall mean a
  level of employment that falls below the employment goal,  as  certified
  annually  by  vendor's  certified  accountants  and  the chairman of the
  empire state development corporation.
    For the purposes of this section "recapture  amount"  shall  mean  the
  difference between the amount of the vendor's fee paid to a vendor track
  with  a  qualified  capital  investment,  and  the  vendor fee otherwise
  payable to a vendor track pursuant to clause (F) of  this  subparagraph,
  that  is  reimbursable  by  the vendor track to the division for payment
  into the state treasury, to the credit of the state lottery fund created
  by section ninety-two-c of the state finance law, due to  an  employment
  shortfall  pursuant to the following schedule only for the period of the
  employment shortfall:
    (i) one hundred percent of the  recapture  amount  if  the  employment
  shortfall  is  greater  than  sixty-six  and  two-thirds  percent of the
  employment goal;
    (ii) seventy-five percent of the recapture amount  if  the  employment
  shortfall  is  greater  than  thirty-three  and one-third percent of the
  employment goal;
    (iii) forty-nine and one-half percent of the recapture amount  if  the
  employment  shortfall  is  greater than thirty percent of the employment
  goal;
    (iv) twenty-two percent of the  recapture  amount  if  the  employment
  shortfall is greater than twenty percent of the employment goal;
    (v) eleven percent of the recapture amount if the employment shortfall
  is greater than ten percent of the employment goal.

(H)  notwithstanding  clauses  (A), (B), (C), (D), (E), (F) and (G) of
  this subparagraph, the  track  operator  of  a  vendor  track  shall  be
  eligible for a vendor's capital award of up to four percent of the total
  revenue  wagered at the vendor track after payout for prizes pursuant to
  this  chapter,  which  shall  be  used  exclusively  for capital project
  investments to improve the facilities of the vendor track which  promote
  or  encourage  increased attendance at the video lottery gaming facility
  including,  but  not  limited  to  hotels,  other  lodging   facilities,
  entertainment  facilities,  retail facilities, dining facilities, events
  arenas, parking garages and other  improvements  that  enhance  facility
  amenities;  provided  that such capital investments shall be approved by
  the division, in consultation with the state racing and wagering  board,
  and  that  such vendor track demonstrates that such capital expenditures
  will increase patronage at such vendor track's facilities  and  increase
  the amount of revenue generated to support state education programs. The
  annual  amount of such vendor's capital awards that a vendor track shall
  be eligible to receive shall be limited  to  two  million  five  hundred
  thousand  dollars,  except for Aqueduct racetrack, for which there shall
  be no vendor's capital awards. Except for tracks having  less  than  one
  thousand one hundred video gaming machines, each track operator shall be
  required  to  co-invest  an  amount  of capital expenditure equal to its
  cumulative vendor's capital award. For all tracks, except  for  Aqueduct
  racetrack,  the  amount  of  any vendor's capital award that is not used
  during any one year period may be carried  over  into  subsequent  years
  ending   before   April   first,   two  thousand  thirteen.  Any  amount
  attributable to a capital expenditure approved prior to April first, two
  thousand thirteen and completed before April first, two thousand fifteen
  shall be eligible to receive the vendor's capital award.  In  the  event
  that  a  vendor  track's  capital expenditures, approved by the division
  prior to April first, two thousand thirteen and completed prior to April
  first, two  thousand  fifteen,  exceed  the  vendor  track's  cumulative
  capital  award  during  the  five  year  period  ending April first, two
  thousand thirteen, the vendor shall  continue  to  receive  the  capital
  award  after  April  first,  two  thousand  thirteen until such approved
  capital expenditures are  paid  to  the  vendor  track  subject  to  any
  required co-investment. In no event shall any vendor track that receives
  a  vendor  fee  pursuant  to  clause  (F) or (G) of this subparagraph be
  eligible for a vendor's capital award under this section.  Any  operator
  of  a vendor track which has received a vendor's capital award, choosing
  to divest the capital improvement toward which the  award  was  applied,
  prior  to the full depreciation of the capital improvement in accordance
  with generally accepted accounting principles, shall reimburse the state
  in amounts equal to the total of any such awards. Any capital award  not
  approved for a capital expenditure at a video lottery gaming facility by
  April  first,  two  thousand  thirteen shall be deposited into the state
  lottery fund for education aid; and
    (iii) less an additional vendor's marketing allowance at a rate of ten
  percent for the first one hundred million  dollars  annually  and  eight
  percent  thereafter  of  the  total  revenue wagered at the vendor track
  after payout for prizes to be used by the vendor track for the marketing
  and  promotion  and  associated  costs  of  its  video  lottery   gaming
  operations  and pari-mutuel horse racing operations, as long as any such
  costs associated with pari-mutuel horse racing operations simultaneously
  encourage increased attendance at such  vendor's  video  lottery  gaming
  facilities, consistent with the customary manner of marketing comparable
  operations in the industry and subject to the overall supervision of the
  division;  provided,  however,  that  the  additional vendor's marketing
  allowance shall not exceed eight percent in any year for any operator of

a racetrack located in the county of Westchester  or  Queens;  provided,
  however,  a  vendor  track that receives a vendor fee pursuant to clause
  (G) of subparagraph  (ii)  of  this  paragraph  shall  not  receive  the
  additional vendor's marketing allowance. In establishing the vendor fee,
  the  division  shall  ensure  the  maximum lottery support for education
  while also ensuring the  effective  implementation  of  section  sixteen
  hundred  seventeen-a of this article through the provision of reasonable
  reimbursements and compensation to vendor tracks  for  participation  in
  such  program. Within twenty days after any award of lottery prizes, the
  division shall pay into the state treasury, to the credit of  the  state
  lottery  fund,  the  balance of all moneys received from the sale of all
  tickets for the lottery in which  such  prizes  were  awarded  remaining
  after  provision  for  the  payment  of  prizes  as herein provided. Any
  revenues derived from the sale of advertising on lottery  tickets  shall
  be deposited in the state lottery fund.
    2.  As  consideration  for  the  operation  of  a video lottery gaming
  facility, the  division,  shall  cause  the  investment  in  the  racing
  industry  of  a portion of the vendor fee received pursuant to paragraph
  one of this subdivision in the manner set  forth  in  this  subdivision.
  With the exception of Aqueduct racetrack, each such track shall dedicate
  a portion of its vendor fees, received pursuant to clause (A), (B), (C),
  (D),  (E),  (F),  or  (G)  of subparagraph (ii) of paragraph one of this
  subdivision, solely for the purpose of enhancing purses at  such  track,
  in  an  amount  equal  to  eight and three-quarters percent of the total
  revenue wagered at the  vendor  track  after  pay  out  for  prizes.  In
  addition,  with the exception of Aqueduct racetrack, one and one-quarter
  percent of total revenue wagered at the vendor track after pay  out  for
  prizes, received pursuant to clause (A), (B), (C), (D), (E), (F), or (G)
  of  subparagraph  (ii)  of  paragraph  one of this subdivision, shall be
  distributed to the appropriate breeding fund for the  manner  of  racing
  conducted by such track.
    Provided,  further,  that nothing in this paragraph shall prevent each
  track from entering into an agreement, not to exceed  five  years,  with
  the  organization  authorized  to  represent its horsemen to increase or
  decrease the portion of its vendor fee dedicated to enhancing purses  at
  such  track  during the years of participation by such track, or to race
  fewer dates than required herein.
    3. Nothing in paragraph two  of  this  subdivision  shall  affect  any
  agreement in effect on or before the effective date of this paragraph.
    c. 1. The specifications for video lottery gaming shall be designed in
  such  a manner as to pay prizes that average no less than ninety percent
  of sales.
    2. Of the ten percent retained  by  the  division  for  administrative
  purposes,  any amounts beyond that which are necessary for the operation
  and administration of this pilot  program  shall  be  deposited  in  the
  lottery education account.
    d.  Notwithstanding  any  law, rule or regulation to the contrary, any
  successor to the New York Racing Association, Inc. with respect  to  the
  operation  and maintenance of video lottery gaming at Aqueduct racetrack
  shall be deemed the successor to the New York Racing  Association,  Inc.
  for purposes of being subject to existing contracts and loan agreements,
  if  any,  entered into by the New York Racing Association, Inc. directly
  related to the construction, operation, management and  distribution  of
  revenues of the video lottery gaming facility at Aqueduct racetrack.
    e.  The  video  lottery  gaming  operator  selected to operate a video
  lottery terminal facility at Aqueduct will be subject to a memorandum of
  understanding between the governor, temporary president  of  the  senate
  and  the  speaker  of  the assembly. Notwithstanding subparagraph (i) of

paragraph a of subdivision eight of section two hundred  twelve  of  the
  racing, pari-mutuel wagering and breeding law, the state, pursuant to an
  agreement  with  the  video  lottery  gaming operator to operate a video
  lottery  terminal  facility  at Aqueduct, may authorize, as part of such
  agreement or in conjunction with  such  agreement  at  the  time  it  is
  executed,  additional  development  at the Aqueduct racing facility. The
  selection will be made in consultation with the franchised  corporation,
  but  is  not  subject  to  such  corporation's  approval. The franchised
  corporation shall not be eligible to compete to operate or to operate  a
  video lottery terminal facility at Aqueduct. The state will use its best
  efforts  to  ensure that the video lottery terminal facility at Aqueduct
  is opened as soon as is practicable and will, if practicable, pursue the
  construction of a temporary video lottery terminal facility at  Aqueduct
  subject  to  staying  within  an  agreed  budget  for such video lottery
  terminal facility and subject to such temporary facility not  having  an
  adverse  impact  on  opening  of  the permanent facility at Aqueduct. To
  facilitate the opening of the video lottery gaming facility at  Aqueduct
  as  soon  as  is practicable, the division of the lottery may extend the
  term of any existing contract related to the video lottery system.
    f. As consideration for the operation  of  the  video  lottery  gaming
  facility  at Aqueduct racetrack, the division shall cause the investment
  in the racing industry of the following percentages of the vendor fee to
  be deposited or paid, as follows:
    1. Six and one-half percent of  the  total  wagered  after  payout  of
  prizes  for  the  first  year  of  operation  of video lottery gaming at
  Aqueduct racetrack, seven percent of the total wagered after  payout  of
  prizes  for the second year of operation, and seven and one-half percent
  of the total wagered after payout  of  prizes  for  the  third  year  of
  operation  and  thereafter,  for  the  purpose  of  enhancing  purses at
  Aqueduct racetrack, Belmont Park racetrack and Saratoga race course.
    2. One percent of the total wagered after payout  of  prizes  for  the
  first  year  of operation of video lottery gaming at Aqueduct racetrack,
  one and one-quarter percent of the total wagered after payout of  prizes
  for  the  second  year of operation, and one and one-half percent of the
  total wagered after payout of prizes for the third year of operation and
  thereafter, for an appropriate breeding fund for the  manner  of  racing
  conducted  at  Aqueduct  racetrack,  Belmont Park racetrack and Saratoga
  race course.
    3. Four percent of the total revenue wagered after payout of prizes to
  be deposited into an account of the franchised  corporation  established
  pursuant  to section two hundred six of the racing, pari-mutuel wagering
  and breeding law to be used for capital expenditures in maintaining  and
  upgrading  Aqueduct  racetrack, Belmont Park racetrack and Saratoga race
  course.
    4. Three percent of the total revenue wagered after payout for  prizes
  to   be   deposited  into  an  account  of  the  franchised  corporation
  established  pursuant  to  section  two  hundred  six  of  the   racing,
  pari-mutuel   wagering   and   breeding  law  to  be  used  for  general
  thoroughbred racing  operations  at  Aqueduct  racetrack,  Belmont  Park
  racetrack and Saratoga race course.
    5.  Paragraphs  one,  two, three and four of this subdivision shall be
  known collectively as the "racing support payments".
    g. In the event the state elects to construct a video lottery terminal
  facility at the Aqueduct racetrack, all video lottery terminal  revenues
  payable  to  the video lottery gaming operator at the Aqueduct racetrack
  remaining after payment of the racing support payments  shall  first  be
  used  to  repay the state's advances for (i) confirmation of the chapter
  eleven plan of reorganization  and  cash  advances  for  the  franchised

corporation's  operations  following  confirmation of the chapter eleven
  plan of reorganization and (ii) the amount  expended  by  the  state  to
  construct  such  video  lottery  terminal facility at Aqueduct racetrack
  pursuant  to  an agreement with the state. Subparagraphs (i) and (ii) of
  this paragraph shall be defined as the  state  advance  amount  and  the
  amounts payable to the division of the lottery.