A new section 4105.17 would be added to 9 NYCRR, as follows:

(1) shall be licensed as an owner, trainer or driver;

(2) own, train or drive a horse anywhere in any race in which pari-mutuel wagering occurs or in any race for which a purse is offered or awarded; or

(3) engage in any other horse racing activity that, in the judgment of the Commission, would create an actual or perceived conflict of interest with his or her duties in New York or otherwise would not be in the best interests of horse racing.

1. Statutory authority: The New York State Gaming Commission (“Commission”) is authorized to promulgate these rules pursuant to Racing Pari-Mutuel Wagering and Breeding Law sections 103(2), 104(1), 104(19) and 122. Under Section 103(2), the Commission is responsible to supervise, regulate, and administer all horse racing and pari-mutuel wagering activities in the State. Subdivision 1 of Section 104 confers upon the Commission general jurisdiction over all such gaming activities within the State and over the corporations, associations and persons engaged in such activities. Subdivision 19 of Section 104 authorizes the Commission to promulgate any rules and regulations that it deems necessary to carry out its responsibilities. Section 122 continues previous rules and regulations of the legacy New York State Racing and Wagering Board, subject to the authority of the Commission to modify or abrogate such rules and regulations.

2. Legislative objectives: To enable the Commission to enhance the integrity and safety of standardbred pari-mutuel racing while generating reasonable revenue for the support of government.

3. Needs and benefits: This rule making is necessary to enhance the real and perceived integrity of New York racing by prohibiting certain practices that could compromise, or appear to compromise, the writing of races at New York standardbred pari-mutuel racetracks.

The rule making will add a new section 4105.17 to 9 NYCRR, expanding the conflict-of-interest restrictions on racing secretaries, assistant racing secretaries and anyone who performs their duties at a New York racetrack.

The current rule (section 4116.3) prohibits, during a racetrack’s racing season, such officials from being licensed by the Commission as owners, trainers or drivers. There are, however, potential conflicts of interest that may arise when such officials participate in pari-mutuel standardbred races, even out of season or out of state. The other owners, trainers, and drivers against whom they would compete might be affected by subsequent decisions made by such officials in the performance of their duties. The appearance of such conflicts of interest can damage the perception of integrity upon which betting handle depends in New York. It can create dissatisfaction among horsepersons who feel that they were treated unfairly in retaliation for the conflicts that inevitably arise in such competitions. Participation in such competition can also result in actual conflicts of interest for such officials. This proposal will strengthen the current rule by broadly prohibiting such competition and by empowering the Commission to forbid any apparent conflicts of interest that may arise.

Finally, this rule making will move such restrictions from Part 4116 (Drivers) to Part 4105 (Officials at Race Meetings), based on the broadening of such restrictions.

4. Costs:

(a) Costs to regulated parties for the implementation of and continuing compliance with the rule: This amendment would not add any new mandated costs to the existing rules.

(b) Costs to the agency, the state and local governments for the implementation and continuation of the rule: None. There will be no costs to local governments because local governments do not regulate pari-mutuel racing activities.

(c) The information, including the source(s) of such information and the methodology upon which the cost analysis is based: The Commission has determined that no costs will be imposed because the rule does not create any mandatory new duty or obligation.

5. Local government mandates: None. The Commission is the only governmental entity authorized to regulate pari-mutuel horse racing activities.

6. Paperwork: There are no changes in paperwork requirements. The proposed amendments will restrict certain activities that involve conflicts of interest.

7. Duplication: The proposed amendments do not duplicate any existing State or Federal requirement.

8. Alternatives: The Commission considered and rejected an alternative requirement that the enhanced restriction be limited to when such officials want to drive at other race meetings. The competition among drivers is more immediate and dangerous than that among trainers and owners. The Commission rejected this approach, however, because conflicts among trainers and owners might also have an effect on such officials, and the Commission does not want to allow such conflicts or perceived conflicts to arise. No other alternatives were considered.

9. Federal standards: None.

10. Compliance schedule: Regulated persons will be able to achieve compliance with the rule upon publication of a Notice of Adoption in the New York State Register.

A regulatory flexibility analysis for small business and local governments, a rural area flexibility analysis, and a job impact statement are not required for this rulemaking proposal because it will not adversely affect small businesses, local governments, rural areas or jobs.

This proposal concerns the restriction of the officials who are responsible for writing races at New York pari-mutuel harness racetracks, i.e., racing secretaries and their assistants or substitutes, not to participate in competitive horseracing at other racetracks, potentially against the same horsepersons who depend on such officials’ unbiased writing of races, and not to have any other apparent conflict of interest that may undermine their performance of such duties. This rule will not have an adverse economic impact or reporting, record keeping or other compliance requirements on small businesses in rural or urban areas or on employment opportunities.