Sullivan County Harness Racing Ass'n v. Glasser

• Decision Date: 29 November 1971
• Citation: 327 N.Y.S.2d 477,68 Misc.2d 579
• Parties: Application of SULLIVAN COUNTY HARNESS RACING ASSOCIATION, Inc., Petitioner, New York City Off-Track Betting Corporation, Intervenor-Petitioner, v. Robert A. GLASSER, Chairman of the New York State Harness Racing Commission,and the New York State Harness Racing Commission et al., Respondents, SaratogaHarness Racing, Inc., et al., Intervenor-Respondent.
• Court: New York Supreme Court

Page 477

327 N.Y.S.2d 477

68 Misc.2d 579

Application of SULLIVAN COUNTY HARNESS RACING ASSOCIATION,

Inc., Petitioner, New York City Off-Track Betting

Corporation, Intervenor-Petitioner, v. Robert A. GLASSER, Chairman of the New York State Harness

Racing Commission,and the New York State Harness Racing

Commission et al., Respondents, SaratogaHarness Racing,

Inc., et al., Intervenor-Respondent.

Supreme Court, Sullivan County.

Nov. 29, 1971.

Cooke, McBride, Davis & Greenberg, Monticello (Leon Greenberg and John S. McBride, Monticello, of counsel), for petitioner.

J. Lee Rankin, Corp. Counsel, City of New York (James Nespole, New York City, and Joseph Joyce, of counsel), for OTBC, intervenor-petitioner.

Louis J. Lefkowitz, Atty. Gen. (Charles A. La Torella, Asst. Atty. Gen., and Bertram D. Sarafan, Atty., New York State Harness Racing Comm., of counsel), for New York State Harness Racing Comm., respondent.

Schrade, Morris & Roche, Albany (Ernest B. Morris and David W. Morris, Albany, of counsel), for Saratoga Harness Racing, Inc., Orange County Driving Park Assn. and Yonkers Raceway, intervenors-respondents.

Raichle, Banning, Weiss & Halpern, Buffalo, for Finger Lakes Racing Assn., Buffalo Trotting Assn., Inc. and Genesee-Monroe Racing Assn., intervenors-respondents.

S. Harvey Fosner and George Morton Levy, Westbury, of counsel, to Roosevelt Raceway, intervenor-respondent.

William D. Kiley, Oneida, for Mid-State Raceway, Inc., intervenor-respondent.

Harold Hughes, Albany, for Harness Horse Breeders of New York State, Inc., intervenor-respondent.

Andrew J. Cook, Kingston, for New York Div. of 8 and 8 of the U.S. Trotting Assn., intervenor-respondent.

A. FRANKLIN MAHONEY, Justice.

Chapter 1095 of the Laws of 1971, effective July 2, 1971, amended Section 38 of the Pari-Mutuel Revenue Law governing the period during which harness racing may be conducted in this state. Under the amended law the Harness Racing Commission was authorized, in counties having a population of 250,000 or less, to permit harness racing during the period from December 15th of one year and January 8th of the following year, excluding December 25th, a period heretofore proscribed under unamended Section 38 of the Pari-Mutuel Law, if the Commission is satisfied that a 'special occasion' made the conduct of harness racing on such days proper or necessary.

The text of the amendment is as follows:

(1) 'In counties having a population of two hundred fifty thousand or less, the state harness racing commission may, however, permit the holding of one or more harness horse race meetings and the conduct of harness races at such meetings on a day or days not during such period if the commission is satisfied that a special occasion makes the holding of such meetings and the conduct of such races on such day or days proper or necessary; but in no event shall such meetings or races be held or conducted on the twenty-fifth day of December.'

Petitioner, Sullivan County Harness Racing Association, Inc. (hereinafter referred to as Monticello) made application to the New York State Harness Racing Commission (hereinafter referred to as Commission) for racing dates pursuant to amended Section 38 of the Pari-Mutuel Racing Law and was licensed, on September 8, 1971, to conduct racing, in conjunction with the Sullivan County Winter Carnival, from December 15, 1971 to January 8, 1972. Thereafter, Monticello entered into negotiations with New York City Off-Track Betting Corporation (hereinafter referred to as OTBC) resulting in a contract on October 6, 1971 for the live telecasting of the last race of each evening from December 15, 1971 to January 8, 1972, inclusive, as well as the taped telecast of two prior races. Monticello and OTBC also executed a second agreement providing for the interfacing of OTBC off-track wagers with those accepted at the track into a single pari-mutuel pool, all pursuant to Section 8066 of the Unconsolidated Laws of 1970. These agreements were filed with the Commission pursuant to Section 8017 of the Unconsolidated Laws of 1940, as amended. The filing of the contracts alerted other harness track operators around the state to the contents of the agreements and Yonkers Raceway and Roosevelt Raceway, in a single application, formally petitioned the Commission to reconsider its allocation of winter racing dates to Monticello. Thereafter, on October 14, 1971, the Commission conducted a hearing at which many and varied interests were represented, including all of the other seven harness tracks in the state, and on November 18, 1971 the Commission rendered a written decision reviewing the testimony ¹ it heard at the October 14th hearing and concluded that its action of September 8, 1971, granting Monticello winter racing dates, should be amended to include the condition that Monticello not conduct its racing program from December 15, 1971 to January 8, 1972 in conjunction with any television broadcasts. Monticello, along with OTBC as a petitioner-intervenor, seeks review of the Commission's November 18, 1971 ruling to the end that it be judicially declared to be arbitrary, capricious and/or illegal in that the condition imposed is beyond the powers of the Commission.

Before reviewing the decision it would be helpful to narrow and refine the issue that is disruptive of the professional cooperativeness that heretofore existed among all the harness tracks in this state. Is the evil complained of by all the respondents the telecasting of racing or is it the telecasting of racing in a manner that might inure to the benefit of OTBC, the common enemy of all tracks, including Monticello? It is undeniable that Yonkers Raceway, Roosevelt Raceway and Saratoga Raceway have all in the past contracted with television stations for public telecasting of the sport as conducted at their respective plants. Presumably, these contracts were filed with the Commission and that body placed no condition or limitation on their right to conduct racing in conjunction with television. Further, the whole tenor of the oral arguments, at Special Term, in opposition to the petition, was not addressed to the deleterious effect of television per se but, rather, to television in cooperation with OTBC. In my view, this is an important refinement. Harness Racing, Thoroughbred Racing, the OTBC and Pari-Mutuel betting are all creatures of the Legislature and each, by statute, was removed from an area considered otherwise to be criminal in order to generate revenues for the state. Looked at in that light it is difficult for the Court to conclude that a contractual relationship between any two of these bodies with respect to the objectives for which all of them were created should be considered to be so heinous in nature as to justify the Commission's conclusion that such a contract would be inimical to harness racing.

However, the Commission reached that conclusion and predicated its findings on the following four reasons:

'There are certain aspects to the Monticello-OTB scheme which the commission finds disturbing. First, as a result of the TV broadcasts in New York City, Monticello would be, in effect, racing and competing in an area not designated in its certificate of incorporation and in its license. In so doing, it would also be circumventing the twenty-five mile restriction contained in the law. Whether or not such conduct, since it would be accomplished indirectly through the device of television, would constitute an actual violation of the Pari-Mutuel Revenue Law is debatable, but it would violate the spirit and intent of the law. Fortunately, the powers of the commission enable it to insure that the spirit and intent of the law be complied with.

'Second, OTB through its partnership with Monticello, would become a direct competitor of Roosevelt and Yonkers in a manner not envisioned in the Off-Track Betting Law. Instead of developing its own market, OTB, with the aid of Monticello, would be directly competing with Roosevelt and Yonkers. Although the Commission has no jurisdiction over OTB in its operations off the licensed harness tracks, it does have jurisdiction over Monticello.

'Third, in the judgment of the commission, upon the evidence before it, the scheme poses a deleterious threat to the industry and to the revenue of the state and the localities. New York, is by far, the foremost pari-mutuel harness racing state in the nation, accounting for between 40% And 50% Of the national attendance and handle. The leaders of that industry were unanimous in their opposition to the scheme except for its two proponents. The industry is an important segment of the economic life of the state providing thousands of jobs directly in its racing operations and through the numerous related businesses. Should the tracks' revenues decline, the horsemen's purses and the revenue of the Breeding Development Fund, both of which are tied to the track's revenue, would automatically decline.

'Fourth, Monticello would be operating during the proscribed period in a manner not envisioned by Chapter 1095. Pari-mutuel racing has heretofore been banned during the Christmas-New Year period in recognition of opposing commercial and religious interests. Chapter 1095 represents an exception to the ban. It was sponsored by Monticello at the 1971 legislative session and its clear purpose was to enable Monticello to participate in the year-end winter vacation activities which attract substantial numbers of visitors to the area. It contemplates a local operation away from the major metropolitan centers. In fact, Chapter 1095, by restricting its application to counties having a population of 250,000 or less pointedly removes the Greater New York City area from its application. However, under the Monticello-OTB scheme, off-track betting in New York City, in conjunction with live television broadcasts, also in New York City, becomes the dominant feature of the operation, far overshadowing...