NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10473A
SPONSOR: Pretlow (MS)
 
TITLE OF BILL:
An act to amend the racing, pari-mutuel wagering and breeding law, in
relation to the registration and regulation of interactive fantasy
sports contests
 
PURPOSE OR GENERAL IDEA OF BILL:
To provide for the registration, regulation, and taxation of interactive
fantasy sports contests in New York State.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill would amend the Racing, Pari-Mutuel Wagering and
Breeding Law by adding a new Article 14 which would register and regu-
late interactive fantasy sports contests with an entry fee. Specif-
ically:
Section 1400 provides legislative findings and purpose.
Section 1401 provides definitions.
Section 1402 authorizes the registration of interactive fantasy sports
operators to conduct interactive fantasy sports contests in New York
State. Any operator that was offering contests to New York state resi-
dents prior to November 10, 2015 would be able to continue operating
until their application for registration has been approved or denied,
provided that such operator files an application for registration with
the New York State Gaming Commission ("the Commission") within ninety
days of the promulgation of regulations to effectuate this article.
Each approved registrant would be required to pay an initial registra-
tion fee equal to the lesser of $150,000 or 1.5% of their interactive
fantasy sports revenue generated in the preceding fiscal year. Registra-
tions would remain in effect for three years.
Section 1403 establishes the scope of information required from an
interactive fantasy sports operator upon submission of an application
for registration to the Commission.
Section 1404 establishes required safeguards and minimum standards in
order to provide players with important consumer protections, including:
*limiting players to one active and continuously used account;
*prohibiting persons under the age of 18 from participating in any
contest;
*ensuring that accurate representations concerning the chances of
winning, and the number of winners, are depicted in all advertisements;
*ensuring that, unless otherwise approved by the Commission, online
fantasy or simulation sports games or contests with an entry fee are not
being directly or indirectly promoted or advertised during the conduct
of any online fantasy or simulation sports games or contests without an
entry fee;
*enabling players to exclude themselves from contests and permanently
close their accounts at any time;
*offering introductory procedures for players, and identifying highly
experienced players;
*disclosing the number of entries a player may submit to each contest,
and the number of total entries allowed for each contest;
*measures to protect the privacy and online security of players and
their accounts;
*ensuring players' funds are protected upon deposit and segregated from
the operating funds of the operator or registrant; and
*information concerning assistance for compulsive play in New York
State.
This section would also limit the number of entries that can be submit-
ted by a player to any contest, prohibit any contest based on a collegi-
ate or high school sport or athletic event, prohibit any contest based
on a horse racing event, prohibit the use of third-party scripts or
scripting programs, and ensure that advertisements for contests and
prizes do not target prohibited participants, minors, or self-excluded
persons.
Section 1405 authorizes the Commission to promulgate regulations to
implement the provisions of this article. This section also assigned the
Commission with all powers necessary and proper to fully and effectively
execute this article, including the ability to accept and investigate
complaints from players and investigate alleged violations of this arti-
cle.
Section 1406 requires each registrant to submit an annual report to the
Commission no later than June 30 of each year. The Commission would be
authorized to conduct a financial audit of any registrant, at any time,
to ensure compliance with this article. The Commission would also be
required to publish a report based on the aggregate information provided
by all registrants' reports, which would be published on the Commis-
sion's website.
Section 1407 imposes a 15% State tax on each registrant's interactive
fantasy sports revenue for the privilege of conducting interactive
fantasy sports contests in New York State.
Section 2 of the bill would establish an immediate effective date.
 
JUSTIFICATION:
On October 6, 2015, the New York State Attorney General's office
launched an investigation into whether employees of the two biggest
daily fantasy sports companies, DraftKings and FanDuel, were able to
gain an unfair financial advantage in daily fantasy football contests by
exploiting access to non-public data. On November 10, the Attorney
General's office issued a notice to DraftKings and FanDuel demanding
that they stop accepting wagers in New York. After months of additional
litigation, DraftKings and FanDuel reached an agreement with the Attor-
ney General to stop taking bets from New York customers on March 21,
2016. The agreements outlined the process the companies and the Attorney
General would follow in the event that the State Legislature does or
does not take action to legalize and regulate daily fantasy sports
contests, as well as establish a statutory framework to protect consum-
ers, on or before June 30, 2016.
Bearing in mind that daily interactive fantasy sports contests have the
potential to produce unfair advantages for certain players, target
minors, and increase compulsive play, this bill seeks to regulate such
contests that also accept entry fees from players.
This bill offers important consumer protections to ensure that all
contests are safe and fair. Requirements such as limiting players to one
active and continuously used account, offering introductory procedures
for players, identifying highly experienced players, and depicting accu-
rate representations concerning the chances of winning in all advertise-
ments will help to provide transparency and fairness across all plat-
forms. Measures to protect the privacy and online security of players
and their accounts, and requiring registrants to protect players' funds
upon deposit, as well as segregate such funds from the companies' oper-
ating funds, would provide players with important safety and security
protections online.
In addition, requirements would be in place to ensure that players can
exclude themselves from contests and permanently close their accounts at
any time if they feel that they are becoming compulsive players. For
this reason, registrants will also be required to provide information on
their websites concerning assistance for compulsive play in New York
State. Because of the risks associated with compulsive play, no person
under the age of 18 would be permitted to participate in an interactive
fantasy sports contest.
By registering and taxing interactive fantasy sports contests, this bill
will also bring about a new and abundant source of revenue for New York
State.
 
LEGISLATIVE HISTORY:
This is new legislation.
 
FISCAL IMPLICATION:
To be determined.
 
EFFECTIVE DATE:
This act would take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
10473--A
IN ASSEMBLY
May 27, 2016
___________
Introduced by M. of A. PRETLOW, DINOWITZ, ZEBROWSKI, CERETTO, MONTESANO,
CROUCH -- Multi-Sponsored by -- M. of A. BRAUNSTEIN, COOK, GJONAJ,
LAWRENCE, MURRAY, ORTIZ -- read once and referred to the Committee on
Racing and Wagering -- reported and referred to the Committee on Codes
-- reported and referred to the Committee on Ways and Means -- commit-
tee discharged, bill amended, ordered reprinted as amended and recom-
mitted to said committee
AN ACT to amend the racing, pari-mutuel wagering and breeding law, in
relation to the registration and regulation of interactive fantasy
sports contests
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The racing, pari-mutuel wagering and breeding law is
2 amended by adding a new article 14 to read as follows:
3 ARTICLE 14
4 INTERACTIVE FANTASY SPORTS
5 Section 1400. Legislative findings and purpose.
6 1401. Definitions.
7 1402. Registration.
8 1403. Scope of registration review.
9 1404. Required safeguards, minimum standards.
10 1405. Powers and duties of the commission.
11 1406. Annual report.
12 1407. State tax.
13 § 1400. Legislative findings and purpose. 1. The legislature hereby
14 finds and declares that:
15 (a) Under the New York penal law a person engages in gambling when he
16 or she stakes or risks something of value upon the outcome of a contest
17 of chance or a future contingent event not under his or her control or
18 influence, upon an agreement or understanding that he or she will
19 receive something of value in the event of a certain outcome;
20 (b) Interactive fantasy sports in many instances have been defined as
21 a game of skill and were exempted from the definition of unlawful inter-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15598-05-6
A. 10473--A 2
1 net gambling under the Unlawful Internet Gambling Enforcement Act of
2 2006 (31 U.S.C. § 5362);
3 (c) Interactive fantasy sports are a game of skill because they
4 consist of fantasy or simulation sports games or contests in which the
5 fantasy or simulation sports teams are selected based upon the skill and
6 knowledge of the participants and not based on the current membership of
7 an actual team that is a member of an amateur or professional sports
8 organization;
9 (d) Interactive fantasy sports contests do not constitute a wager on a
10 future contingent event not under the contestant's control or influence.
11 Participants have control over which players they choose and the outcome
12 of each contest is not dependent upon the performance of any one player
13 or any one actual team. The outcome of any fantasy sports contest does
14 not correspond to the outcome of any one sporting event. Instead, the
15 outcome depends on how the performances of participants' fantasy roster
16 choices compare to the performance of others' roster choices.
17 2. Based on the findings in subdivision one of this section, the
18 legislature declares that interactive fantasy sports do not constitute
19 gambling and therefore are not prohibited by the penal law. Specif-
20 ically, as games of skill, and given the influence that participants
21 have over the outcome, interactive fantasy sports contests do not fall
22 under the definition of gambling in section 225.00 of the penal law.
23 3. The legislature further finds that as the internet has become an
24 integral part of society, and interactive fantasy sports a major form of
25 entertainment for many consumers, any interactive fantasy sports
26 enforcement and regulatory structure must begin from the bedrock premise
27 that participation in a lawful and licensed interactive fantasy sports
28 industry is a privilege and not a right, and that regulatory oversight
29 is intended to safeguard the integrity of the games and participants and
30 to ensure accountability and the public trust.
31 § 1401. Definitions. As used in this article, the following terms
32 shall have the following meanings:
33 1. "Authorized player" shall mean an individual located in New York
34 state, who is not a prohibited player, that participates in an interac-
35 tive fantasy sports contest offered by a registrant.
36 2. "Collegiate sport or athletic event" shall mean a sport or athletic
37 event offered or sponsored by or played in connection with a public or
38 private institution that offers education services beyond the secondary
39 level.
40 3. "Commission" shall mean the New York state gaming commission.
41 4. "Entry fee" shall mean cash or cash equivalent that is paid by an
42 authorized player to an operator or registrant to participate in an
43 interactive fantasy sports contest offered by such operator or regis-
44 trant.
45 5. "High school sport or athletic event" shall mean a sport or athlet-
46 ic event offered or sponsored by or played in connection with a public
47 or private institution that offers education services at the secondary
48 level.
49 6. "Highly experienced player" shall mean an authorized player who
50 has:
51 (a) entered more than one thousand contests offered by a single opera-
52 tor or registrant; or
53 (b) won more than three prizes valued at one thousand dollars or more
54 from a single operator or registrant; and
55 (c) once an authorized player is classified as a highly experienced
56 player, such player shall remain classified as such.
A. 10473--A 3
1 7. "Horse racing event" shall mean any sport or athletic event
2 conducted in New York state subject to the provisions of this chapter,
3 or any sport or athletic event conducted outside of New York state,
4 which if conducted in New York state would be subject to the provisions
5 of this chapter.
6 8. "Interactive fantasy sports contest" or "contest" shall mean any
7 online fantasy or simulation sports game or contest offered by an opera-
8 tor or registrant in which an authorized player pays an entry fee and
9 manages a fantasy or simulation sports team composed of athletes from an
10 amateur or professional sports organization and which meets the follow-
11 ing conditions:
12 (a) the value of any prizes and awards offered to authorized players
13 shall be established and made known to such players in advance of the
14 contest, and such value shall not be determined by the number of author-
15 ized players or the amount of any entry fees paid by such players;
16 (b) all winning outcomes reflect the relative knowledge and skill of
17 the authorized players and shall be determined predominantly by accumu-
18 lated statistical results of the performance of individuals, including
19 athletes in the case of sports events;
20 (c) no winning outcome shall be based on the score, point spread, or
21 performance of a single sports team, or any combination of such teams;
22 (d) no winning outcome shall be based solely on any single performance
23 of an individual athlete in a single sport or athletic event; and
24 (e) no game or contest shall be based on a prohibited sports event.
25 9. "Interactive fantasy sports revenue" shall mean the amount equal to
26 the total of all entry fees that a registrant collects from all players,
27 less the total of all sums paid out as winnings to all players, multi-
28 plied by the resident percentage for New York state; provided, however,
29 that the total of all sums paid out as winnings to players shall not
30 include the cash equivalent value of any merchandise or thing of value
31 awarded as a prize. The issuance to or participation by authorized play-
32 ers of an interactive fantasy sports contest of any promotional gaming
33 credit shall not be taxable for the purposes of determining interactive
34 fantasy sports revenue.
35 10. "Interactive fantasy sports operator" or "operator" shall mean any
36 person or entity that offers any interactive fantasy sports contest to
37 any authorized player through any interactive fantasy sports platform.
38 11. "Interactive fantasy sports platform" or "platform" shall mean the
39 combination of hardware, software, and data networks used to manage,
40 administer, or control contests and any associated entry fees.
41 12. "Interactive fantasy sports registrant" or "registrant" shall mean
42 an operator that is registered by the commission. A registrant may
43 utilize multiple interactive fantasy sports platforms and offer multiple
44 contests, provided that each platform and each contest has been reviewed
45 and approved by the commission.
46 13. "Minor" shall mean any person under the age of eighteen years.
47 14. "Prohibited player" shall mean:
48 (a) any member, officer, employee or agent of an operator or regis-
49 trant;
50 (b) any spouse, child, brother, sister or parent residing as a member
51 of the same household in the principal place of abode of any member,
52 officer, employee or agent of an operator or registrant;
53 (c) any individual with access to non-public confidential information
54 about contests;
55 (d) any amateur or professional athlete whose performance may be used
56 to determine the outcome of a contest;
A. 10473--A 4
1 (e) any sports agent, team employee, referee, or league official asso-
2 ciated with any sport or athletic event on which contests are based;
3 (f) any individual located in a state where the conduct of contests is
4 expressly prohibited; or
5 (g) any minor.
6 15. "Prohibited sports event" shall mean any collegiate sport or
7 athletic event, any high school sport or athletic event, or any horse
8 racing event.
9 16. "Resident percentage" shall mean, for each interactive fantasy
10 sports contest, the percentage, rounded to the nearest tenth of a
11 percent, of the total entry fees collected from players located in New
12 York state, divided by the total entry fees collected from all players
13 in the interactive fantasy sports contest.
14 17. "Season-long interactive fantasy sports contest" means any inter-
15 active fantasy sports contest offered by an operator or registrant that
16 is conducted over an entire sports season where any entry fees are paid
17 prior to the start of the season.
18 18. "Sports event" shall mean any amateur or professional sport or
19 athletic event, except a prohibited sports event.
20 § 1402. Registration. 1. (a) No operator shall administer, manage, or
21 otherwise make available an interactive fantasy sports platform to
22 persons located in New York state unless registered with the commission
23 pursuant to section fourteen hundred three of this article. A registrant
24 may utilize multiple interactive fantasy sports platforms and offer
25 multiple types of contests, provided that each platform and each type of
26 contest has been reviewed and approved by the commission. This article,
27 and any and all rules and regulations adopted under the authority of
28 this article, shall only apply to interactive fantasy sports contests
29 for which an authorized player pays an entry fee, and shall not apply to
30 season-long interactive fantasy sports contests.
31 (b) Any operator that was offering contests to persons located in New
32 York state prior to the tenth of November, two thousand fifteen, may
33 continue to offer contests to persons located in New York state until
34 such operator's application for registration has been approved or denied
35 in accordance with section fourteen hundred three of this article,
36 provided that such operator files an application for registration with
37 the commission within ninety days of the promulgation of regulations to
38 effectuate this article.
39 2. The commission shall provide a temporary permit to each operator
40 that was offering contests pursuant to paragraph (b) of subdivision one
41 of this section to allow such operator to continue to offer such
42 contests, on a provisional basis, until such operator's application for
43 registration has been approved or denied in accordance with section
44 fourteen hundred three of this article, provided that such operator
45 continues to meet all the requirements in section fourteen hundred four
46 of this article.
47 3. The commission shall require each approved registrant to pay an
48 initial registration fee equal to the lesser of one hundred fifty thou-
49 sand dollars or one and one-half percent of the interactive fantasy
50 sports revenue generated by such registrant in the preceding fiscal
51 year; provided, however, if such approved registrant did not generate
52 any interactive fantasy sports revenue in the preceding fiscal year,
53 such registrant shall not be required to pay an initial registration fee
54 pursuant to this subdivision.
55 4. Registrations issued by the commission shall remain in effect for
56 three years. The commission shall establish a process for renewal, and
A. 10473--A 5
1 each registrant shall pay a renewal fee equal to the lesser of one
2 hundred fifty thousand dollars or one and one-half percent of the inter-
3 active fantasy sports revenue generated by such registrant in the
4 preceding fiscal year; provided, however, if such approved registrant
5 did not generate any interactive fantasy sports revenue in the preceding
6 fiscal year, such registrant shall not be required to pay a renewal fee
7 pursuant to this subdivision.
8 5. All registration and renewal fees received by the commission pursu-
9 ant to this section shall be deposited into the general fund.
10 6. The commission shall publish a list of all operators registered in
11 New York state pursuant to this section on the commission's website for
12 public use.
13 7. The commission shall promulgate regulations to implement the
14 provisions of this article, including the development of the initial
15 form of the application for registration. Such regulations shall
16 provide for the registration and operation of contests in New York state
17 and shall include, but not be limited to, responsible protections with
18 regard to compulsive play and safeguards for fair play.
19 § 1403. Scope of registration review. 1. The commission shall
20 prescribe the initial form of the application for registration which
21 shall require, but not be limited to:
22 (a) the full name and principal address of the operator;
23 (b) if a corporation, the name of the state in which incorporated and
24 the full names and addresses of any partner, officer, director, share-
25 holder holding ten percent or more equity, and ultimate equitable
26 owners;
27 (c) if a business entity other than a corporation, the full names and
28 addresses of the principals, partners, shareholders holding five percent
29 or more equity, and ultimate equitable owners;
30 (d) whether such corporation or entity files information and reports
31 with the United States Securities and Exchange Commission as required by
32 section thirteen of the Securities Exchange Act of 1934, 15 U.S.C. §§
33 78a-78kk; or whether the securities of the corporation or entity are
34 regularly traded on an established securities market in the United
35 States;
36 (e) the type and estimated number of contests to be conducted annual-
37 ly;
38 (f) a statement of the assets and liabilities of the operator.
39 2. The commission may require the full names and addresses of the
40 officers and directors of any creditor of the operator, and of those
41 stockholders who hold more than ten percent of the stock of the credi-
42 tor.
43 3. Upon receipt of an application for registration for each individual
44 listed on such application as an officer or director, the commission
45 shall submit to the division of criminal justice services a set of fing-
46 erprints, and the division of criminal justice services processing fee
47 imposed pursuant to subdivision eight-a of section eight hundred thir-
48 ty-seven of the executive law and any fee imposed by the federal bureau
49 of investigation. Upon receipt of the fingerprints, the division of
50 criminal justice services shall promptly forward a set of the individ-
51 ual's fingerprints to the federal bureau of investigation for the
52 purpose of a nationwide criminal history record check to determine
53 whether such individual has been convicted of a criminal offense in any
54 state other than New York or in a federal jurisdiction. The division of
55 criminal justice services shall promptly provide the requested criminal
56 history information to the commission. For the purposes of this section,
A. 10473--A 6
1 the term "criminal history information" shall mean a record of all
2 convictions of crimes and any pending criminal charges maintained on an
3 individual by the division of criminal justice services and the federal
4 bureau of investigation. All such criminal history information sent to
5 the commission pursuant to this subdivision shall be confidential and
6 shall not be published or in any way disclosed to persons other than the
7 commission, unless otherwise authorized by law.
8 4. Upon receipt of criminal history information pursuant to subdivi-
9 sion three of this section, the commission shall make a determination to
10 approve or deny an application for registration; provided, however, that
11 before making a determination on such application, the commission shall
12 provide the subject of the record with a copy of such criminal history
13 information and a copy of article twenty-three-A of the correction law
14 and inform such prospective applicant seeking to be credentialed of his
15 or her right to seek correction of any incorrect information contained
16 in such criminal history information pursuant to the regulations and
17 procedures established by the division of criminal justice services.
18 The commission shall deny any application for registration, or suspend,
19 refuse to renew, or revoke any existing registration issued pursuant to
20 this article, upon the finding that the operator or registrant, or any
21 partner, officer, director, or shareholder:
22 (a) has knowingly made a false statement of material fact or has
23 deliberately failed to disclose any information required by the commis-
24 sion;
25 (b) has had a registration or license to offer or conduct contests
26 denied, suspended, or revoked in any other state or country for just
27 cause;
28 (c) has legally defaulted in the payment of any obligation or debt due
29 to any state or political subdivision; or
30 (d) has at any time knowingly failed to comply with any requirement
31 outlined in section fourteen hundred four of this article, any other
32 provision of this article, any regulations promulgated by the commission
33 to effectuate this article, or any additional requirements of the
34 commission.
35 5. All determinations to approve or deny an application pursuant to
36 this article shall be performed in a manner consistent with subdivision
37 sixteen of section two hundred ninety-six of the executive law and arti-
38 cle twenty-three-A of the correction law. When the commission denies an
39 application, the operator shall be afforded notice and the right to be
40 heard and offer proof in opposition to such determination in accordance
41 with the regulations of the commission.
42 § 1404. Required safeguards, minimum standards. 1. As a condition of
43 registration in New York state, each operator and registrant shall
44 implement the following measures:
45 (a) limit each authorized player to one active and continuously used
46 account, and prevent prohibited players from maintaining accounts or
47 participating in any contest offered by such operator or registrant;
48 (b) prohibit minors from participating in any contest, which includes:
49 (i) if a registrant becomes or is made aware that a minor has partic-
50 ipated in one of its contests, such registrant shall promptly, within no
51 more than two business days, refund any deposit received from the minor,
52 whether or not the minor has engaged in or attempted to engage in a
53 contest; provided, however, that any refund may be offset by any prizes
54 already awarded;
55 (ii) each registrant shall publish and facilitate parental control
56 procedures to allow parents or guardians to exclude minors from access
A. 10473--A 7
1 to any contest or platform. Such procedures shall include a toll-free
2 number to call for help in establishing such parental controls; and
3 (iii) each registrant shall take appropriate steps to confirm that an
4 individual opening an account is not a minor.
5 (c) when referencing the chances or likelihood of winning in adver-
6 tisements or upon contest entry, make clear and conspicuous statements
7 that are not inaccurate or misleading concerning the chances of winning
8 and the number of winners;
9 (d) enable authorized players to exclude themselves from contests and
10 take reasonable steps to prevent such players from entering a contest
11 from which they have excluded themselves;
12 (e) permit any authorized player to permanently close an account
13 registered to such player, on any and all platforms supported by such
14 operator or registrant, at any time and for any reason;
15 (f) offer introductory procedures for authorized players, that shall
16 be prominently displayed on the main page of such operator or regis-
17 trant's platform, that explain contest play and how to identify a highly
18 experienced player;
19 (g) identify all highly experienced players in any contest by a symbol
20 attached to such players' usernames, or by other easily visible means,
21 on all platforms supported by such operator or registrant;
22 (h) disclose the number of entries a single authorized player may
23 submit to each contest;
24 (i) disclose the maximum number of total entries allowed for each
25 contest;
26 (j) implement measures to protect the privacy and online security of
27 authorized players and their accounts;
28 (k) offer all authorized players access to his or her account history
29 and account details;
30 (l) ensure authorized players' funds are protected upon deposit and
31 segregated from the operating funds of such operator or registrant and
32 otherwise protected from corporate insolvency, financial risk, or crimi-
33 nal or civil actions against such operator or registrant;
34 (m) list on each website, in a prominent place, information concerning
35 assistance for compulsive play in New York state, including a toll-free
36 number directing callers to reputable resources containing further
37 information, which shall be free of charge.
38 2. Each registrant shall restrict the number of entries submitted by a
39 single authorized player for any contest to a maximum of one hundred
40 fifty entries per player per contest, or a maximum of three percent of
41 the total number of entries by all players for any contest, whichever is
42 less. Registrants shall take reasonable steps to prevent authorized
43 players from submitting more than the allowable number of entries per
44 contest.
45 3. (a) Operators shall not directly or indirectly operate, promote, or
46 advertise any platform or contest to persons located in New York state
47 unless registered pursuant to this article.
48 (b) Unless otherwise approved by regulation of the commission, opera-
49 tors and registrants shall not directly or indirectly promote or adver-
50 tise any online fantasy or simulation sports games or contests with an
51 entry fee during the conduct of any online fantasy or simulation sports
52 games or contests without an entry fee. This paragraph shall not apply
53 to any operator or registrant that prohibits prohibited players from
54 participating in online fantasy or simulation sports games or contests
55 without an entry fee.
A. 10473--A 8
1 4. Registrants shall not offer any contest based on any prohibited
2 sports event.
3 5. Registrants shall not permit any minor or prohibited participant to
4 enter any contest.
5 6. Advertisements for contests and prizes offered by a registrant
6 shall not target prohibited participants, minors, or self-excluded
7 persons. Representations or implications about average winnings from
8 contests shall not be unfair or misleading. Such representations shall
9 include, at a minimum:
10 (a) the median and mean net winnings of all authorized players partic-
11 ipating in contests offered by such registrant; and
12 (b) the percentage of winnings awarded by the registrant to highly
13 experienced players participating in contests offered by such registrant
14 within the preceding calendar year.
15 7. Registrants shall prohibit the use of third-party scripts or
16 scripting programs for any contest and ensure that measures are in place
17 to deter, detect and, to the extent reasonably possible, prevent cheat-
18 ing, including collusion, and the use of cheating devices, including use
19 of software programs that submit entry fees or adjust the athletes
20 selected by an authorized player.
21 8. Operators and registrants shall develop and prominently display
22 procedures on the main page of such operator's or registrant's platform
23 for the filing of a complaint by the authorized player against such
24 registrant. An initial response shall be given by such registrant to
25 such player filing the complaint within forty-eight hours. A complete
26 response shall be given by such registrant to such player filing the
27 complaint within ten business days. An authorized player may file a
28 complaint alleging a violation of the provisions of this article with
29 the commission.
30 9. Registrants shall maintain records of all accounts belonging to
31 authorized players and retain such records for five years from the date
32 an account was created.
33 § 1405. Powers and duties of the commission. 1. The commission shall
34 promulgate regulations to implement the provisions of this article. Such
35 regulations shall provide for the registration and operation of contests
36 in New York state and shall include, but not be limited to, responsible
37 protections with regard to compulsive play and safeguards for fair play.
38 2. The commission shall have the following powers and duties for
39 purposes of administering, regulating, and enforcing the provisions of
40 this article:
41 (a) all powers and duties assigned by this article, as well as all
42 powers necessary and proper to fully and effectively execute this arti-
43 cle;
44 (b) to approve and deny applications for registration to conduct
45 contests in New York state, and to suspend, refuse or renew, or revoke
46 any registration issued to a registrant under this article;
47 (c) to review and approve each platform and each contest offered by an
48 operator or registrant;
49 (d) to accept and investigate complaints of any kind from an author-
50 ized player and attempt to mediate such complaints where appropriate;
51 (e) to investigate alleged violations of this article;
52 (f) to initiate proper enforcement proceedings where such action is
53 deemed by the commission to be necessary or appropriate; and
54 (g) all powers and duties assigned by this chapter.
55 § 1406. Annual report. 1. Each registrant shall annually submit a
56 report to the commission no later than the thirtieth of June of each
A. 10473--A 9
1 year, which shall include the following information as it shall apply to
2 accounts held by authorized players located in New York state:
3 (a) the number of accounts held by authorized players on all platforms
4 offered by the registrant, and the number of accounts held by highly
5 experienced players on all platforms offered by the registrant;
6 (b) the total number of new accounts established in the preceding
7 year, as well as the total number of accounts permanently closed in the
8 preceding year;
9 (c) the total amount of entry fees received from authorized players;
10 (d) the total amount of prizes awarded to authorized players;
11 (e) the total amount of interactive fantasy sports revenue received by
12 the registrant;
13 (f) the total number of authorized players that requested to exclude
14 themselves from contests;
15 (g) any additional information that the commission deems necessary to
16 carry out the provisions of this article.
17 2. Upon the submission of such annual report, to such extent that the
18 commission deems it to be in the public interest, the commission shall
19 be authorized to conduct a financial audit of any registrant, at any
20 time, to ensure compliance with this article.
21 3. The commission shall annually publish a report based on the aggre-
22 gate information provided by all registrants pursuant to subdivision one
23 of this section, which shall be published on the commission's website no
24 later than one hundred eighty days after the deadline for the submission
25 of individual reports as specified in subdivision one of this section.
26 § 1407. State tax. For the privilege of conducting interactive fanta-
27 sy sports contests in the state, registrants shall pay a tax equivalent
28 to fifteen percent of their interactive fantasy sports gross revenue
29 generated within the state.
30 § 2. Section 104 of the racing, pari-mutuel wagering and breeding law
31 is amended by adding a new subdivision 23 to read as follows:
32 23. To register and regulate interactive fantasy sports in New York
33 state.
34 § 3. This act shall take effect immediately.