Finger Lakes Racing Ass'n, Inc. v. New York State Racing & Wagering Bd.
| Decision Date | 26 October 1978 |
| Docket Number | OFF-TRACK |
| Parties | , 382 N.E.2d 1131 FINGER LAKES RACING ASSOCIATION, INC., et al., Appellants, v. NEW YORK STATE RACING & WAGERING BOARD, Respondent. FINGER LAKES RACING ASSOCIATION, INC., et al., Appellants, v. WESTERN REGIONALBETTING CORP., Respondent, and New York State Racing and Wagering Board et al., Intervenors-Respondents. |
| Court | New York Court of Appeals Court of Appeals |
Both of these actions, consolidated for purposes of appeal, involve the distribution of retained commissions from off-track pari-mutuel betting moneys to the Finger Lakes Racing Association, Inc. (FLRA).
In the first, a controversy submitted upon agreed facts pursuant to CPLR 3222, FLRA seeks a determination that certain rules and regulations promulgated by the New York State Racing and Wagering Board (Board) are invalid in that they conflict with various sections of the Off-Track Pari-Mutuel Betting Law (L.1973, ch. 346, as amd., hereinafter cited to the McKinney's Unconsolidated Laws (Book 65)). The second action is one for an accounting brought by FLRA against the Western Regional Off-Track Betting Corp. (WROTBC) to collect certain moneys allegedly due FLRA in accordance with the distribution tables set forth in section 8071 of the Unconsolidated Laws.
Although generally prohibited in the State, gambling is constitutionally permitted with respect to betting on horse races in such manner as the Legislature may prescribe (N.Y. Const., art. I, § 9; see Finger Lakes Racing Assn. v. New York State Off-Track Pari-Mutuel Betting Comm., 30 N.Y.2d 207, 216, 331 N.Y.S.2d 625, 627, 282 N.E.2d 592, 594; mot. to amd. remittitur granted 30 N.Y.2d 946, 335 N.Y.S.2d 697, 287 N.E.2d 388). Prior to 1970, pari-mutuel betting was restricted to the grounds of harness or thoroughbred racetracks (L.1940, ch. 254). In that year, in an effort to combat illegal bookmaking and thereby enhance the revenues of State and local governments, the Legislature established off-track pari-mutuel betting. The new law provided for the reimbursement of moneys to the tracks for revenues lost on account of decreases in their "handle" 1 and attendance caused by such betting (L.1970, ch. 143). However, the newly enacted law was found to have taken too great a toll at the expense of racetracks in the State and the local breeding industry. Hence, corrective legislation was deemed necessary (see, generally, Report of the Governor's Commission on the Future of Horse Racing in New York State, March, 1973).
Accordingly, in 1973 the Legislature revamped the Off-Track Pari-Mutuel Betting Law (L.1973, ch. 346, as amd.), establishing seven, later eight, horse racing regions throughout the State and creating regional off-track betting corporations to administer the off-track betting program. Unfortunately, the law itself is an imbroglio, being born out of the union of diverse racing industry interests and legislative compromise.
FLRA, the only thoroughbred racing association in the State, operates Finger Lakes Racetrack near Canandaigua in Ontario County. Although FLRA is thus situated within the Western Region (Unconsolidated Laws, § 8063, subd. 1, par. (8)), it also comprises part of the State's only special betting district (Unconsolidated Laws, § 8067, subd. 5). This special betting district was at the relevant time composed of counties located within the Central, Catskill and Western Regions and constitutes the geographic market from which FLRA draws its patrons. In effect, the law provides that while FLRA is conducting a meeting, all off-track betting offices within the special district are prohibited from accepting bets on nonprofit racing association (NYRA) 2 races. However, outside the special betting district, off-track betting establishments are permitted to accept wagers on NYRA races regardless of whether FLRA is conducting a meeting. Thus, it is evident that the special betting district was created as a result of a legislative determination that FLRA would suffer a decrease in its handle and attendance if off-track bets on NYRA races were accepted within its geographic market while it was conducting a meeting. This conclusion is further buttressed by the fact that off- establishments located within the Western Region but outside the special betting district are entitled to take bets on NYRA races at all times, reflecting a legislative judgment that FLRA would not suffer as a result of such wagering.
FLRA contends that WROTBC has wrongfully withheld its statutory share of retained commissions 3 due for off-track bets placed in 1974. Essentially, FLRA maintains that it is owed moneys on account of two categories of wagers. The first is regular and exotic 4 bets placed on NYRA races within the Western Region but outside the special betting district during FLRA's meeting. The second is regular and exotic bets placed on NYRA races within the special district when FLRA is not conducting a meeting.
Distribution of retained commissions is governed by section 8071 of the Unconsolidated Laws. The statute is rather complex, containing numerous permutations. The basic issue presented is whether FLRA has the status of a regional track for purposes of distribution of retained commissions on bets placed on NYRA races within the Western Region but outside the special district. We conclude that it does not.
A reading of section 8071 leads unmistakably to the conclusion that FLRA is a regional track only within the confines of the special betting district. In that statute the Legislature has made specific distinctions between FLRA and regional tracks in parts of the three regions in which the special betting district, and of course FLRA, is located. Thus, FLRA receives all retained commissions on off-track bets placed on its own races within the district, with no moneys going to the "regional track". It also receives a smaller percentage of the retained commission on out-district bets placed on its own races than does the "regional track" (Unconsolidated Laws, § 8071, subd. 1, par. (a)). During the FLRA meeting, there simply would be no need to distinguish between FLRA and the "regional track" with respect to out-district races if the special betting district were not considered a separate region in this context.
The remaining paragraphs of section 8071 bring this distinction478even sharper focus. Thus, paragraph (d) of subdivision 1 provides that pools on out-of-State races are divided among the regional harness tracks and/or FLRA within that portion of the special betting district situated within the Western Region. In those counties outside the special betting district but within the Western Region, retained commissions are divided between in-region harness tracks and the NYRA, with FLRA receiving nothing. If FLRA was a track within the Western Region, the Legislature surely would have afforded it a portion of the commissions shared by other in-region tracks (see, also, Unconsolidated Laws, § 8071, subd. 1, par. (c)).
Indeed, the very reason for creation of the special betting district to insulate FLRA's attendance and handle from the effect of off-track bets on NYRA races militates against the conclusion that FLRA is anything but a regional track only within its special betting district. Absent creation of the special betting district, there could be no bets on NYRA races placed anywhere within the entire Western Region while FLRA was conducting its meeting. Thus, the two harness tracks located within the region 5 would see an appreciable decrease in their share of retained commissions since there would be no pool on NYRA races within the entire region. Hence, FLRA has received a benefit to the extent that its market within the special betting district is protected by the prohibition of...
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