(i) All New York state and out-of-state and foreign wagers of the same type shall be combined into single pools for calculation.

(ii) As many tentative payout prices as there are different retention and breakage rates applicable (including the prevailing New York rate) shall be calculated on the basis of returning the appropriate rate of return, less breaks after imposition of each such rate of retention and breaks.

(iii) To each such out-of-state or foreign operator shall be allocated an amount sufficient for it to pay the appropriate pay-off to holders of winning wagers placed with it together with the applicable retention amount on its total wagers.

(iv) To each New York operator shall be allocated an amount sufficient for it to pay the appropriate pay-off to holders of winning wagers placed with it together with the applicable New York retention amount on its total wagers.

(v) The total amount of the combined pool less the combined total of all allocations as determined in subparagraphs (iii) and (iv) of this paragraph shall be credited to a special breakage account. The amount in such account giving appropriate weight to rates established for breakage shall be allocated as breaks among all operators in the combined pool in accordance with the rules and regulations of the board. Should a minus pool eventuate in which the total combined pool is insufficient to reimburse each operator for the allocation due to it then the allocation due to each such operator will be reduced as may be appropriate and such operator will be responsible for satisfying its liability from its own operating capital. d. No tax or surcharge shall be imposed by this state on any out-of-state or foreign wagering operator participating in any combined pool herein. Nothing in this paragraph, however, shall impair the imposition of any tax or charge by this state on the consideration received from an out-of-state or foreign operator by a New York operator for its consent to wagering on its races, transmitting the simulcast thereof, or the agreeing to combination of bets into its pools. e. The operator of the site of the statewide interface will be responsible for the actual collection or transmittal of funds in settlement of the liabilities of all operators participating in the combined pool. f. Nothing herein shall entitle any operator or person claiming therefrom to participation in any share of the retention or payouts allocated to another operator participating in the combined pool. g. Nothing herein shall affect the validity of any surcharge imposed upon the winning pay-offs computed herein as may be prescribed by the laws of this state or another state or foreign country. h. Nothing herein shall be construed to authorize or prescribe any act contrary to federal law. 3. Combining New York wagers on horse races conducted in other states or foreign countries with wagers on such races made elsewhere. a. The board may authorize the combination of wagers made in New York state upon the outcome of out-of-state or foreign horse races with wagers made upon such races elsewhere in accordance with rules and regulations of the board which shall include but not be limited to the following provisions:

(i) that if such combination is authorized that all New York state operators must participate therein to assure uniform New York odds and pay-outs;

(ii) that if the out-of-state or foreign computation is made on the basis of different retention or breakage rates and (A) such out-of-state or foreign laws do not permit New York wagers to be computed in accordance with New York retention and breakage rates, that such variation does not exceed twenty percent and will be allocated pro rata among winning wagers in New York state and recipients of such retention and breakage rates in New York state, or (B) if such out-of-state or foreign laws do permit New York bets to be computed in accordance with New York retention and breakage rates that such rates will be applied and that the out-of-state or foreign operator doing such calculations is willing and able to properly perform such function;

(iii) that the out-of-state or foreign rules governing such wagers are understandable to New York wagerers and in the best judgment of the board will not deviate substantially from customary and standard pari-mutuel practice in general;

(iv) that the New York operators are able to perform such transmission and computer retrieval functions as may be required;

(v) that such combination will enhance the best interest of racing generally; and

(vi) such other rules and regulations as may be deemed necessary and appropriate by the board. b. Nothing herein shall be construed to authorize or prescribe any act contrary to federal law. 4. In those instances in which the retention rates of the out-of-state track are different from the retention rates authorized in this section, distribution to each of the entities entitled to receive payment under section five hundred twenty-seven or article ten of this chapter after payment of state taxes and regulatory fees shall be adjusted proportionately in an appropriate manner to account for higher or lower retention rates. For purposes of determining payment on out-of-state wagers the retention rate shall be the amount sufficient to pay holders of winning wagers plus any payments required to be made to the out-of-state track which exceeds two per centum of handle.