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S08412 Summary:

BILL NOS08412
 
SAME ASSAME AS A09436
 
SPONSORADDABBO
 
COSPNSR
 
MLTSPNSR
 
Add Art 15 §§1500 - 1504, RWB L
 
Authorizes interactive gaming in the state of New York.
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S08412 Actions:

BILL NOS08412
 
02/24/2022REFERRED TO RACING, GAMING AND WAGERING
04/25/2022REPORTED AND COMMITTED TO FINANCE
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S08412 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8412
 
                    IN SENATE
 
                                    February 24, 2022
                                       ___________
 
        Introduced  by  Sen. ADDABBO -- read twice and ordered printed, and when
          printed to be committed to the Committee on Racing, Gaming and  Wager-
          ing
 
        AN  ACT  to  amend the racing, pari-mutuel wagering and breeding law, in
          relation to authorizing interactive gaming
 
          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 15 to read as follows:
     3                                  ARTICLE 15
     4                             INTERACTIVE GAMING
     5  Section 1500. Legislative intent and findings.
     6          1501. Definitions.
     7          1502. Authorization.
     8          1503. Required safeguards.
     9          1504. State taxes.
    10    § 1500. Legislative intent and findings. Section nine of  article  one
    11  of  the  New  York  state constitution was recently amended and provides
    12  "casino gambling at no more than  seven  facilities  as  authorized  and
    13  prescribed  by  the legislature shall hereafter be authorized or allowed
    14  within this state." It has been, and continues to be, the sense  of  the
    15  legislature  that  this  provision  is not contravened by a statute that
    16  authorizes the acceptance of a wager by an individual who is betting  by
    17  virtual  or electronic means and the wager is accepted through equipment
    18  located within a licensed gaming facility; provided that any such  wager
    19  meets other safeguards ensuring that the plain text of this provision is
    20  honored  in  such  structure.  Interactive gaming is now legal online in
    21  seven states, including the bordering states of New Jersey, Pennsylvania
    22  and Connecticut, while it is permitted only in person  in  New  York  at
    23  four  upstate commercial gaming facilities and Native American class III
    24  gaming facilities. The legislature hereby finds  and  declares  that  an
    25  interactive  gaming  wager  that  is  made through virtual or electronic
    26  means from a location within New York state and is  transmitted  to  and
    27  accepted  by electronic equipment located at a licensed gaming facility,
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14834-01-2

        S. 8412                             2
 
     1  including without limitation, a computer server located at such licensed
     2  gaming facility, is a wager  made  at  such  licensed  gaming  facility,
     3  notwithstanding any provisions of the penal law to the contrary.
     4    §  1501.  Definitions.  As  used  in this article, the following terms
     5  shall have the following meanings:
     6    1. "Authorized game" means any casino slot or table game determined by
     7  the commission to be compatible with the public interest and to be suit-
     8  able for online use after an appropriate test or experimental period  as
     9  the  commission  may  deem  appropriate.  An authorized game may include
    10  gaming tournaments in which players compete against one another  in  one
    11  or  more  of  the  games  authorized  herein  or by the commission or in
    12  approved variations  or  composites  thereof  if  such  tournaments  are
    13  authorized.
    14    2.  "Authorized  participant"  means  an  individual who is physically
    15  present in the state of New York  when  placing  an  interactive  gaming
    16  wager,  who  is  authorized to participate in gaming pursuant to article
    17  thirteen of this chapter, and who  participates  in  interactive  gaming
    18  offered by a casino or operator. All interactive gaming wagers placed in
    19  accordance  with  this  article  shall be considered placed or otherwise
    20  made when received by the casino or  operator  at  the  licensed  gaming
    21  facility,  regardless  of the authorized participant's physical location
    22  at the time such wager is initiated. The intermediate routing  of  elec-
    23  tronic  data  in connection with mobile wagering shall not determine the
    24  location or locations in which a wager is initiated, received or  other-
    25  wise made.
    26    3. "Commission" means the New York state gaming commission.
    27    4.  "Interactive  gaming  wager" means cash or cash equivalent that is
    28  paid by an authorized sports bettor to a casino or operator  to  partic-
    29  ipate  in  interactive  gaming  offered  by such casino or operator. Any
    30  wager through electronic communication shall be deemed to take place  at
    31  the  physical location of the server or other equipment used by a casino
    32  or operator to accept interactive gaming  wagering,  regardless  of  the
    33  authorized  participant's physical location within the state at the time
    34  such wager is initiated.
    35    5. "Interactive gaming" means  wagering  on  authorized  casino  games
    36  online  by  any system or method of wagering, including, but not limited
    37  to, in-person communication and electronic communication through  inter-
    38  net websites accessed via a mobile device or computer, and mobile device
    39  applications.
    40    6.  "Interactive  gaming  gross revenue" means the amount equal to the
    41  total of all  interactive  gaming  wagers  that  a  casino  or  operator
    42  collects  from  all  authorized  participants less the total of all sums
    43  paid out as winnings to all participants,  provided  however,  that  the
    44  total of all sums paid out as winnings shall not include the cash equiv-
    45  alent value of any merchandise or thing of value awarded as a prize. The
    46  issuance  to  or  wagering by authorized participants of any promotional
    47  gaming credit shall not be  taxable  for  the  purposes  of  determining
    48  interactive gaming gross revenue.
    49    7.  "Interactive  gaming  wagering  platform" means the combination of
    50  hardware, software, and data networks used  to  manage,  administer,  or
    51  control interactive gaming wagering and any associated wagers accessible
    52  by  any  electronic  means,  including  mobile applications and internet
    53  websites accessed via a mobile device or computer.
    54    8. "Operator" means a casino or an Indian tribe that has entered  into
    55  a tribal-state gaming compact in accordance with the Indian Gaming Regu-
    56  latory  Act  that is in effect and has been ratified by the state of New

        S. 8412                             3
 
     1  York, and has entered into an interactive gaming wagering agreement with
     2  the commission pursuant to section one thousand five hundred two of this
     3  article.
     4    §  1502. Authorization. 1. (a) No casino or operator shall administer,
     5  manage or otherwise make available an interactive gaming wagering  plat-
     6  form  to  persons  located  in  New  York state unless authorized by and
     7  registered with the commission pursuant to this  section.  A  casino  or
     8  operator  may use up to two mobile interactive gaming wagering platforms
     9  and brands for authorized games, provided that such platform and  brands
    10  have  been reviewed and approved by the commission. A casino or operator
    11  may contract with up to  two  independent  contractors  to  provide  its
    12  mobile  interactive gaming wagering platforms. An independent contractor
    13  may display its brand on the platform in addition to the casino or oper-
    14  ator brand.
    15    (b) As a condition of registration, the commission shall require  that
    16  each  casino or operator authorized to conduct mobile interactive gaming
    17  wagering pay a one-time fee of two million dollars. As  a  condition  of
    18  approval  of  any independent contractor to provide an operator's mobile
    19  interactive gaming waging platform and display its brand, the commission
    20  shall require that such independent contractor pay a one-time fee of ten
    21  million dollars.
    22    (c) Registrations issued by the commission shall remain in effect  for
    23  ten  years.  The  commission shall establish and implement a process for
    24  renewal.
    25    (d) The commission shall publish a list of all casinos  and  operators
    26  registered to offer mobile interactive gaming wagering in New York state
    27  pursuant to this section on the commission's website for public use.
    28    (e) The commission shall prescribe the form and manner of the applica-
    29  tion for registration, which shall contain all information deemed neces-
    30  sary  and  relevant  by the commission to determine whether an applicant
    31  should be authorized to conduct interactive gaming wagering.
    32    2. (a) As a condition of registration  as  an  operator,  each  casino
    33  shall  agree,  upon request of an Indian tribe that has not entered into
    34  an agreement for mobile interactive gaming wagering with another casino,
    35  to provide a site for a mobile interactive gaming  wagering  server  and
    36  related  equipment  for such Indian tribe as directed by the commission,
    37  at no cost to such Indian tribe except the direct  and  actual  cost  of
    38  hosting  the  server  or  other  equipment used by such Indian tribe, as
    39  determined by the commission.
    40    (b) As a condition of registration as an operator in New  York  state,
    41  an  Indian  tribe shall enter into an agreement with the commission with
    42  respect to mobile interactive gaming wagering:
    43    (i) to follow the requirements imposed on casinos and operators  under
    44  this  section  with  respect  to  such Indian tribe's mobile interactive
    45  gaming wagering, to adhere to the regulations promulgated by the commis-
    46  sion pursuant to this section with respect to mobile interactive  gaming
    47  wagering,  and to submit to the commission's enforcement of this section
    48  and regulations promulgated  thereunder,  including  by  waiving  tribal
    49  sovereign immunity for the sole and limited purpose of such enforcement;
    50    (ii) to waiver such Indian tribe's exclusive geographic right to offer
    51  and conduct mobile interactive gaming wagering, but not otherwise;
    52    (iii) to remit payment to the state equal to tax on interactive gaming
    53  wagering  revenue  imposed pursuant to section one thousand five hundred
    54  four of this article;
    55    (iv) not to offer or to conduct any other mobile  gaming  unless  such
    56  mobile gaming is otherwise authorized by state or federal law; and

        S. 8412                             4
 
     1    (v)  to locate the server or other equipment used by such Indian tribe
     2  to accept mobile interactive  gaming  wagering  at  a  casino  that  has
     3  applied  for  and  is eligible to register as an operator of interactive
     4  gaming wagering pursuant to this section and to pay the actual  cost  of
     5  hosting the server or other equipment as determined by the commission.
     6    (c)  All  agreements  entered  into  by casinos and Indian tribes with
     7  respect to hosting mobile interactive gaming wagering platforms  for  an
     8  Indian tribe:
     9    (i)  shall  be  approved  by the commission prior to taking effect and
    10  before registration of such casino or Indian tribe as an operator pursu-
    11  ant to this section;
    12    (ii) shall provide that the Indian tribe may, at its sole  discretion,
    13  terminate  such  agreement  with  six  months'  notice, unless otherwise
    14  agreed to in writing with such casino, and all commitments, undertakings
    15  and waivers made by such Indian tribe thereunder, except that such Indi-
    16  an tribe's waiver of its exclusive geographic right to offer and conduct
    17  mobile interactive gaming wagering shall survive the termination of such
    18  agreement;
    19    (iii) shall be limited in applicability solely to such Indian  tribe's
    20  operation  of mobile interactive gaming wagering and shall not extend to
    21  any other operation or activity of such Indian tribe; and
    22    (iv) shall not create any rights or privileges to any third party  who
    23  is  not a party to such agreement, except that the commission shall have
    24  the power to enforce such agreement, including by revoking or suspending
    25  the registration of a party that fails to comply  with  its  obligations
    26  under such agreement.
    27    (d)  No  mobile interactive gaming wagering may be conducted within an
    28  Indian tribe's exclusive geographic area unless such Indian  tribe  with
    29  exclusive  geographic  right  to  such area is registered as an operator
    30  pursuant to this section. Operators shall use geo-location and geo-fenc-
    31  ing technology to ensure that mobile interactive gaming wagering is  not
    32  available  to  persons  who  are physically located in an Indian tribe's
    33  exclusive geographic area,  unless  such  Indian  tribe  with  exclusive
    34  geographic  right  to that area is registered as an operator pursuant to
    35  this section.
    36    § 1503. Required safeguards. 1. As a condition of  registration,  each
    37  operator shall implement the following measures:
    38    (a)  limit  each authorized participant to one active and continuously
    39  used account on their platform, and prevent anyone they know, or  should
    40  have  known  to  be  a  prohibited  bettor  from maintaining accounts or
    41  participating in any interactive gaming wagering offered by such  opera-
    42  tor;
    43    (b)  adopt appropriate safeguards to ensure, to a reasonable degree of
    44  certainty, that authorized participants are  physically  located  within
    45  the state when engaging in mobile interactive gaming wagering;
    46    (c)  prohibit  minors  from  participating  in  any mobile interactive
    47  gaming wagering, which includes:
    48    (i) if an operator becomes or is made aware that a minor  has  created
    49  an  account,  or  accessed  the  account of another, such operator shall
    50  promptly, within no more than two  business  days,  refund  any  deposit
    51  received  from  the  minor,  whether  or not the minor has engaged in or
    52  attempted to engage in interactive gaming  wagering,  provided  however,
    53  that any refund may be offset by any prizes already awarded;
    54    (ii)  each operator shall provide parental control procedures to allow
    55  parents or guardians to exclude minors from access  to  any  interactive

        S. 8412                             5
 
     1  gaming  wagering  or platform. Such procedures shall include a toll-free
     2  number to call for help in establishing such parental controls; and
     3    (iii)  each  operator  shall take appropriate steps to confirm that an
     4  individual opening an account is not a minor;
     5    (d) when referencing the chances or likelihood of  winning  in  adver-
     6  tisements  or  upon placement of an interactive gaming wager, make clear
     7  and  conspicuous  statements  that  are  not  inaccurate  or  misleading
     8  concerning the chances of winning and the number of winners;
     9    (e) enable authorized participants to exclude themselves from interac-
    10  tive  gaming  wagering and take reasonable steps to prevent such bettors
    11  from engaging in wagering from which they have excluded themselves;
    12    (f) permit any authorized participant to permanently close an  account
    13  registered  to  such  bettor, on any and all platforms supported by such
    14  operator, at any time and for any reason;
    15    (g) offer introductory procedures  for  authorized  participants  that
    16  explain   interactive   gaming  wagering,  which  shall  be  prominently
    17  displayed on the main page of such operator platform;
    18    (h) implement measures to protect the privacy and online  security  of
    19  authorized participants and their accounts;
    20    (i)  offer  all  authorized  participants access to his or her account
    21  history and account details;
    22    (j) ensure authorized participants' funds are protected  upon  deposit
    23  and  segregated  from the operating funds of such operator and otherwise
    24  protected from corporate insolvency,  financial  risk,  or  criminal  or
    25  civil actions against such operator;
    26    (k) list on each website, in a prominent place, information concerning
    27  assistance  for compulsive play in New York state, including a toll-free
    28  number directing  callers  to  reputable  resources  containing  further
    29  information, which shall be free of charge;
    30    (l)  permit  account holders to establish self-exclusion gaming limits
    31  on a daily, weekly, and monthly basis that enable the account holder  to
    32  identify  the  maximum  amount  of  money  an account holder may deposit
    33  during such period of time;
    34    (m) when an account holder's lifetime  deposits  exceed  two  thousand
    35  five hundred dollars, the operator shall prevent any wagering until such
    36  account  holder  immediately  acknowledges,  and  acknowledges each year
    37  thereafter, that he or she has met the deposit threshold and  may  elect
    38  to  establish  responsible  gaming limits or close the account, and such
    39  account holder has received disclosures  from  the  operator  concerning
    40  problem gambling resources;
    41    (n)  maintain a publicly accessible internet page dedicated to respon-
    42  sible play, a link to which shall appear on the operator's  website  and
    43  in  any  mobile application or electronic platform on which a bettor may
    44  place wagers. The responsible play page shall include (i) a statement of
    45  the operator's policy and commitment to responsible gaming; (ii)  infor-
    46  mation  regarding,  or links to information regarding, the risks associ-
    47  ated with gambling and the potential signs of problem gaming; (iii)  the
    48  availability  of  self-imposed  gaming  limits; (iv) a link to a problem
    49  gaming webpage maintained  by  the  office  of  addiction  services  and
    50  supports; and (v) such other information or statements as the commission
    51  may require by rule; and
    52    (o)  submit  annually  a  problem  gaming  plan to the commission that
    53  includes: (i) the objectives of and  timetables  for  implementing  such
    54  plan;  (ii)  identification  of the persons responsible for implementing
    55  and maintaining such plan; (iii) procedures for identifying  users  with
    56  suspected  or known problem gaming behavior; (iv) procedures for provid-

        S. 8412                             6
 
     1  ing information to users concerning problem  gaming  identification  and
     2  resources;  (v) procedures to prevent gaming by minors and self-excluded
     3  persons; and (vi) such other problem gaming information as  the  commis-
     4  sion may require by rule.
     5    2.  The  commission shall annually require a report to be prepared and
     6  distributed to the governor and the legislature on the impact of  mobile
     7  interactive  gaming wagering on problem gamblers in New York state. Such
     8  report shall include an assessment of problem gaming among persons under
     9  the age of thirty. Such report shall be prepared by  a  non-governmental
    10  organization  or  entity  with expertise in serving the needs of persons
    11  with gambling addictions. Such report shall be prepared and  distributed
    12  under  the  supervision  of and in coordination with the commission. The
    13  costs associated with the preparation and distribution  of  such  report
    14  shall  be  borne  by operators and the commission shall be authorized to
    15  assess a fee against operators for such purposes. The  commission  shall
    16  also  report  periodically to the governor and legislature on the effec-
    17  tiveness of the statutory and regulatory controls in place to ensure the
    18  integrity of mobile interactive gaming operations.
    19    § 1504. State taxes. 1. For the privilege of conducting mobile  inter-
    20  active  gaming  wagering in the state, casinos and operators shall pay a
    21  tax equivalent to twenty-five percent of interactive gaming gross reven-
    22  ue attributed to interactive gaming wagering  pursuant  to  section  one
    23  thousand five hundred two of this article. Mobile interactive gaming tax
    24  revenue  shall  be  separately  maintained and returned to the state for
    25  deposit into the  state  lottery  fund  for  education  aid,  except  as
    26  provided for in subdivision two of this section. Any interest and penal-
    27  ties  imposed  by  the  commission relating to such taxes, all penalties
    28  levied and collected by the commission, and the appropriate funds,  cash
    29  or  prizes forfeited from interactive gaming wagering shall be deposited
    30  into the state lottery fund for education.
    31    2. From the state tax collected pursuant to subdivision  one  of  this
    32  section, the commission shall distribute, in conjunction with the office
    33  of  addiction services and supports, eleven million dollars annually for
    34  problem gambling education and treatment purposes.
    35    § 2. This act shall take effect immediately.
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