NYCL AGO 96-F7.

• Case Date: April 18, 1996
• Court: New York

New York Attorney General Opinions 1996. AGO 96-F7. April 18, 1996Formal Opinion No. 96-F7Hon. Jerry Bilinski Chairman No. 96-F7 NYS Racing and Wagering Board 120 Broadway - 13th Floor New York, NY 10271NY CONS ART IV § 8; RACING, PARI-MUTUEL WAGERING AND BREEDING LAW §§ 101, 228(1), 229(1)(a), 318(1), 503, 520, 521, 523, 527, 532, 603, 604; STATE ADMINISTRATIVE PROCEDURE ACT §§ 102(2)(a)(i) and (b)(i), 202; L 1993 CH 346; L 1994 CH 281.Though the State Racing and Wagering Board may prescribe the post-surcharge breakage on winnings paid out by off-track pari-mutuel betting corporations, such a determination constitutes rulemaking that must be done in accordance with Article IV, § 8 of the State Constitution and the State Administrative Procedure Act.Dear Chairman Bilinski: Your counsel has asked for an opinion whether recent amendments to the Racing, Pari-Mutuel Wagering and Breeding Law (Racing Law), enacted pursuant to Chapter 281 of the Laws of 1994, are applicable to the calculation of post-surcharge breaks on pari-mutuel wagers (fn1) NYC Off-Track Betting v Racing and Wagering Bd , 157 Misc 2d 524, 528 (Sup Ct NY Co 1993). placed at off-track betting corporations (OTBs). To avoid payouts in pennies, "breaks" or "breakage" was developed as a method of rounding off a bettor's winnings by reducing the payout to an amount set by statute. For example, a pari-mutuel operator will reduce a payout to the nearest nickel or dime, and retain the remaining odd cents. Thus, the smaller the "break," the greater the corresponding payout to the winning bettor. In 1994, the State Legislature adopted the Omnibus Racing Preservation and Relief Act. See , L 1994 Ch 281. Among other modifications to the Racing Law, Chapter 281 amended the statute's breakage formula . Prior to the 1994 amendments, breaks were determined by the type of bet placed.(fn2) Sections one, two and nine of Chapter 281 revised the breakage language in Racing Law sections 228(1) (breakage applicable to non-New York Racing Association [NYRA] thoroughbred racing), 229(1)(a) (breakage applicable to NYRA races), and 318(1) (breakage applicable to harness races), so that breakage is determined by the winning bettor's payout. Thus, as amended by Chapter 281, Racing Law sections 228(1), 229(1)(a) and 318(1) currently read as follows:

[B]reaks are hereby defined as the odd cents over any multiple of five for payoffs greater than one dollar five cents but less than five dollars, over any multiple of ten for payoffs greater than five dollars but less than twenty-five dollars, over any multiple of twenty-five for payoffs greater than twenty-five dollars but less than two hundred fifty dollars, or over any multiple of fifty for payoffs over two hundred fifty dollars.

Racing Law §§ 228(1), 229(1)(a), 318(1), as amended by L 1994 Ch 281. The Legislature designed these modifications with the goal of stimulating betting opportunities and increasing interest in pari-mutuel betting by enhancing the payout to...