STATE OF NEW YORK ________________________________________________________________________ 4856 2023-2024 Regular Sessions IN SENATE February 15, 2023 ___________ 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 interactive gaming The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 1367-a of the racing, pari-mutuel wagering and 2 breeding law is amended by adding a new subdivision 8 to read as 3 follows: 4 8. No additional mobile sports wagering licenses shall be issued 5 pursuant to this section subsequent to the conversion of any mobile 6 sports wagering platform provider license to an interactive gaming 7 license, as set forth in subdivision two of section fifteen hundred 8 three of this chapter. 9 § 2. The racing, pari-mutuel wagering and breeding law is amended by 10 adding a new article 15 to read as follows: 11 ARTICLE 15 12 INTERACTIVE GAMING 13 Section 1500. Legislative intent and findings. 14 1501. Definitions. 15 1502. Eligibility to conduct interactive gaming. 16 1503. Entity licensing. 17 1504. Individual, enterprise and vendor licensing. 18 1505. Requirements for conduct and operation of interactive 19 gaming. 20 1506. Taxation and fees. 21 1507. Responsible gaming requirements. 22 § 1500. Legislative intent and findings. Section nine of article one 23 of the New York state constitution was recently amended and provides 24 "casino gambling at no more than seven facilities as authorized and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09618-02-3
S. 4856 2 1 prescribed by the legislature shall hereafter be authorized or allowed 2 within this state". It has been, and continues to be, the sense of the 3 legislature that this provision is not contravened by a statute that 4 authorizes the acceptance of a wager by an individual located in New 5 York state who is betting by virtual or electronic means and the wager 6 is accepted through equipment located within a licensed gaming facility; 7 provided that any such wager meets other safeguards ensuring that the 8 plain text of this provision is honored in such structure. Interactive 9 gaming is now legal in seven states, including the bordering states of 10 New Jersey, Pennsylvania, and Connecticut, while it is permitted only in 11 person in New York at four upstate commercial gaming facilities and 12 Native American class III gaming facilities. The legislature hereby 13 finds and declares that an interactive gaming wager that is made through 14 virtual or electronic means from a location within New York state and is 15 transmitted to and accepted by electronic equipment located at a 16 licensed gaming facility, including without limitation, a computer serv- 17 er located at such licensed gaming facility, is a wager made at such 18 licensed gaming facility, notwithstanding any provisions of the penal 19 law to the contrary. 20 § 1501. Definitions. For the purposes of this article, the following 21 terms shall have the following meanings: 22 1. "Authorized casino game" means any gambling game as set forth in 23 subdivision four, nineteen, thirty-eight, thirty-nine or forty-one of 24 section thirteen hundred one of this chapter and associated regulations. 25 An authorized casino game may include gaming tournaments in which play- 26 ers compete against one another in one or more of the games authorized 27 herein or by the commission or in approved variations or composites 28 thereof if such tournaments are authorized. 29 2. "Authorized participant" means an individual who is physically 30 present in the state of New York when placing an interactive gaming 31 wager, who is authorized to participate in gaming pursuant to article 32 thirteen of this chapter, and who participates in interactive gaming 33 offered by a casino or operator. All interactive gaming wagers placed in 34 accordance with this article shall be considered placed or otherwise 35 made when received by the casino or operator at the licensed gaming 36 facility, regardless of the authorized participant's physical location 37 at the time such wager is initiated. The intermediate routing of elec- 38 tronic data in connection with mobile wagering shall not determine the 39 location or locations in which a wager is initiated, received, or other- 40 wise made. 41 3. "Commission" means the New York state gaming commission. 42 4. "Gaming facility" means the premises approved under a gaming 43 license which includes a gaming area and any other non-gaming structure 44 related to the gaming area and may include, but shall not be limited to, 45 hotels, restaurants or other amenities. 46 5. "Interactive gaming" means wagering on authorized casino games 47 online by any system or method of wagering, including, but not limited 48 to, in-person communication and electronic communication through inter- 49 net websites accessed via a mobile device or computer, and mobile device 50 applications. 51 6. "Interactive gaming licensee" means a qualifying entity that has 52 been authorized by the New York state gaming commission to conduct 53 interactive gaming. 54 7. "Interactive gross gaming revenue" means the amount equal to the 55 total of all interactive gaming wagers that an interactive gaming licen- 56 see collects from all authorized participants, less the total of all
S. 4856 3 1 sums paid out as winnings to all authorized participants, provided, 2 however, that the total of all sums paid out as winnings to authorized 3 participants shall not include the following: (a) the cash equivalent 4 value of any merchandise or thing of value awarded as a prize; and (b) 5 the value of all bonuses or promotions provided to authorized partic- 6 ipants as an incentive to place or as a result of their having placed 7 interactive gaming wagers, not to exceed 1.75 percent of the total 8 amount of all interactive gaming wagers placed with the interactive 9 gaming licensee each month after the first twelve months of interactive 10 gaming wagering. 11 8. "Interactive gaming wager" means cash or cash equivalent that is 12 paid by an authorized sports bettor to a casino or operator to partic- 13 ipate in interactive gaming offered by such casino or operator. Any 14 wager through electronic communication shall be deemed to take place at 15 the physical location of the server or other equipment used by a casino 16 or operator to accept interactive gaming wagering, regardless of the 17 authorized participant's physical location within the state at the time 18 such wager is initiated. 19 9. "Live dealer games" means authorized casino games conducted by live 20 studio dealers or other physical gaming equipment, such as automated 21 roulette wheels, ball blowers or gaming devices, or both, in a live game 22 environment in which the authorized participants have the ability to 23 participate in game play and communicate game decisions through an 24 authorized interactive gaming wagering platform. Live dealer games 25 include, but are not limited to, live card games, live table games and 26 other live authorized casino games. 27 10. "Live gaming studio" means a physical location in New York state 28 that utilizes live video streaming technology to provide authorized 29 casino games to a player's interactive gaming device or multi-use 30 computing device. 31 11. "Live studio dealer" means natural persons, that lead table games, 32 including blackjack, craps, keno, poker, roulette and other authorized 33 casino games while assisting authorized participants with game-related 34 needs, that distribute cards, dice and other equipment to authorized 35 participants according to the table and other authorized games, and that 36 monitor game pace and play. 37 12. "Prohibited participant" means: (a) any officer or employee of the 38 commission; (b) any principal or key employee of a casino, interactive 39 gaming licensee, and its affiliates, except as may be permitted by the 40 commission; (c) any casino gaming or non-gaming employee at the casino 41 that employs such person and any gaming or non-gaming employee of the 42 interactive gaming licensee that employs such person; (d) any contrac- 43 tor, subcontractor, or consultant, or officer or employee of a contrac- 44 tor, subcontractor, or consultant, of a casino or an interactive gaming 45 licensee if such person is directly involved in the operation or obser- 46 vation of interactive gaming, or the processing of interactive gaming 47 claims or payments; (e) any person subject to a contract with the 48 commission if such contract contains a provision prohibiting such person 49 from participating in interactive gaming; (f) any spouse, child, sibling 50 or parent residing in the principal place of abode of any of the forego- 51 ing persons at the same casino or interactive gaming licensee where the 52 foregoing person is prohibited from participating in interactive gaming; 53 (g) any individual placing a wager as an agent or proxy for another 54 person known to be a prohibited participant; or (h) any minor. 55 13. "Qualifying entity" means (a) a destination resort casino licensed 56 under article thirteen of this chapter; (b) a video lottery terminal
S. 4856 4 1 facility authorized under paragraphs one and two of subdivision a of 2 section sixteen hundred seventeen-a of the tax law, when such video 3 lottery terminal facility conducts racing, as defined in subdivision 4 three of section three hundred one of this chapter, or authorized under 5 paragraph five of subdivision a of section sixteen hundred seventeen-a 6 of the tax law; (c) a federally recognized Indian tribe that has entered 7 into a tribal-state gaming compact in accordance with the Indian Gaming 8 Regulatory Act that is in effect and has been ratified by the state of 9 New York; or (d) a mobile sports wagering platform provider, inclusive 10 of the sports wagering operators the platform utilizes, selected by the 11 commission to conduct mobile sports wagering pursuant to subdivision 12 seven of section thirteen hundred sixty-seven-a of this chapter and 13 section fifteen hundred three of this article. An unlicensed entity 14 offering games or contests that require a license or temporary permit 15 issued by the commission under article thirteen or fourteen of this 16 chapter within the previous three years of the effective date of this 17 article shall be ineligible to receive an interactive gaming license. 18 § 1502. Eligibility to conduct interactive gaming. 1. Only a qualify- 19 ing entity in good standing with the commission or, if the qualifying 20 entity is an Indian tribe, those executive agencies with which it other- 21 wise interacts, shall be eligible to conduct interactive gaming in the 22 state. 23 2. No qualifying entity shall administer, manage, or otherwise make 24 available an interactive gaming platform to persons located in New York 25 state unless it has provided notice of intent to offer interactive 26 gaming to the commission pursuant to this section. Additionally, no 27 entity shall advertise or promote an unlicensed interactive gaming plat- 28 form to persons located in the state of New York. 29 3. (a) Prior to the commission approving an interactive gaming licen- 30 see under section fifteen hundred three of this article to commence 31 operations, the commission shall conduct a comprehensive investigation 32 of the applicant to determine whether the applicant or any of its affil- 33 iates, including entities under common control, is knowingly (i) accept- 34 ing revenue, directly or indirectly, derived from any jurisdiction sanc- 35 tioned by the office of foreign assets control (OFAC) of the United 36 States treasury department, or (ii) accepting or assisting, directly or 37 indirectly, in the acceptance of online wagers or consideration related 38 to online wagering from any country in which such online gambling is 39 prohibited or illegal. 40 (b) The commission shall not approve an interactive gaming licensee to 41 commence operations if the commission determines that the applicant or 42 any of its affiliates, including entities under common control, is know- 43 ingly (i) accepting revenue, directly or indirectly, derived from any 44 jurisdiction sanctioned by the OFAC of the United States treasury 45 department, or (ii) accepting or assisting, directly or indirectly, in 46 the acceptance of online wagers or other consideration related to online 47 wagering from any country in which such online gambling is prohibited or 48 illegal. 49 (c) If at any time during licensure the commission determines that the 50 licensee or any of its affiliates, including entities under common 51 control, is knowingly accepting revenue, directly or indirectly, derived 52 from any jurisdiction sanctioned by the OFAC of the United States treas- 53 ury department, or accepting or assisting, directly or indirectly, in 54 the acceptance of online wagers or other consideration related to online 55 wagering from any country in which such online gambling is prohibited or 56 illegal, the commission shall impose a penalty of license revocation if
S. 4856 5 1 the commission determines, after notice and an opportunity for hearing, 2 that it would further the public interest to discontinue such operations 3 of the interactive gaming licensee. 4 4. Licenses authorized under this article shall remain in effect for 5 ten years from the date issued. The commission shall establish a process 6 for renewal. 7 5. The commission shall publish a list of all licensees authorized to 8 offer interactive gaming in New York state pursuant to this section on 9 the commission's website for public use. 10 6. Each interactive gaming licensee shall offer no more than one indi- 11 vidually branded skin. 12 7. Notices of intent to offer interactive gaming sent to the commis- 13 sion by a qualified entity shall be acted upon by the commission prompt- 14 ly, with authorization to commence operations being issued no more than 15 thirty days of receipt of the petition. 16 8. To meet the definition of a qualifying entity, an Indian Tribe 17 shall enter into an agreement with the commission with respect to inter- 18 active gaming: 19 (a) to follow the requirements imposed on interactive gaming licensees 20 under this section and section thirteen hundred sixty-seven-a of this 21 chapter with respect to the Indian Tribe's interactive gaming; to adhere 22 to the regulations promulgated by the commission pursuant to this 23 section with respect to interactive gaming, and to submit to the commis- 24 sion's enforcement of this section and section thirteen hundred sixty- 25 seven-a of this chapter and regulations promulgated thereunder with 26 respect to interactive gaming, including by waiving tribal sovereign 27 immunity for the sole and limited purpose of such enforcement. Nothing 28 herein shall be construed as requiring an Indian Tribe's agreement to 29 adhere to the requirements of section thirteen hundred sixty-seven of 30 this chapter for gaming conducted on tribal lands as a condition of 31 offering interactive gaming under this section; 32 (b) to waive the Indian Tribe's exclusive geographic right to offer 33 and conduct interactive gaming, but not otherwise; 34 (c) to remit payment to the state equal to tax on interactive gaming 35 revenue imposed under section fifteen hundred six of this article with 36 respect to interactive gaming; 37 (d) not to offer or to conduct mobile gaming other than interactive 38 gaming pursuant to this section unless such mobile gaming is otherwise 39 authorized by state or federal law; and 40 (e) to locate the server or other equipment used by the Indian Tribe 41 or its agent to accept interactive gaming at a casino that has applied 42 for and is eligible to register as an interactive gaming licensee and to 43 pay the actual cost of hosting the server or other equipment as deter- 44 mined by the commission. 45 9. No interactive gaming may be conducted within an Indian Tribe's 46 exclusive geographic area unless such Indian Tribe with exclusive 47 geographic right to that area is registered as an interactive gaming 48 licensee. Interactive gaming licensees shall use geo-location and geo- 49 fencing technology to ensure that interactive gaming is not available to 50 persons who are physically located in an Indian Tribe's exclusive 51 geographic area, unless such Indian Tribe with exclusive geographic 52 right to that area is registered as an interactive gaming licensee under 53 this section. 54 § 1503. Entity licensing. 1. A qualifying entity shall receive an 55 interactive gaming license upon the effective date of this article. An 56 interactive gaming licensee shall not commence interactive gaming until
S. 4856 6 1 such time that the commission has promulgated a regulatory scheme and 2 provided approval to commence operations. Such regulations shall be 3 promulgated, and approval issued in a timely manner, but no later than 4 one hundred twenty days following the effective date of this article. 5 2. A qualifying entity shall not incur any additional licensing or 6 administrative fees, or additional expenses outside of those set forth 7 in this section. 8 3. (a) Up to three interactive wagering licenses shall be awarded by a 9 competitive bidding process conducted by the commission. Eligible appli- 10 cants for the competitive bidding process must have at least five 11 percent in the applicant owned, through either a direct or indirect 12 economic interest, by members of a minority group as defined in subdivi- 13 sion eight of section three hundred ten of the executive law. 14 (b) The commission shall issue a request for applications no later 15 than July first, two thousand twenty-three, provided, however, that the 16 deadline for submission of applications shall be no later than thirty 17 days after the date upon which the commission issues such request for 18 applications. 19 (c) The commission shall make determinations to award a license or 20 disqualify an applicant on a rolling basis to expedite issuance of addi- 21 tional licenses and maximize revenue to the state. 22 (d) The commission shall determine the form of application and scoring 23 criteria and make both available on its website. 24 (e) Mobile sports wagering licensees awarded a license by the process 25 set forth in paragraphs (a) through (d) of this subdivision may apply 26 for an interactive gaming licensee upon selection by the commission, 27 allowing such licensees to offer both mobile sports wagering and inter- 28 active gaming. 29 4. As a condition of licensing, the commission shall require that each 30 casino or operator authorized to conduct mobile interactive gaming 31 wagering pay a one-time fee of two million dollars. As a condition of 32 approval of any independent contractor to provide an operator's mobile 33 interactive gaming waging platform and display its brand, the commission 34 shall require that such independent contractor pay a one-time fee of ten 35 million dollars. 36 § 1504. Individual, enterprise and vendor licensing. Each interactive 37 gaming licensee may contract with an entity to conduct interactive 38 gaming, in accordance with the regulations of the commission. Such enti- 39 ty shall obtain a license as a casino vendor enterprise prior to 40 execution of any such contract, and such license shall be issued pursu- 41 ant to the provisions of section thirteen hundred twenty-seven of this 42 chapter and in accordance with the regulations promulgated by the 43 commission. 44 § 1505. Requirements for conduct and operation of interactive gaming. 45 1. The live gaming studio used to conduct live dealer games shall not 46 be required to be located within the premises of a gaming facility, as 47 defined in subdivision twenty-three of section thirteen hundred one of 48 this chapter, but must be located within the state of New York. 49 2. An applicant for an interactive gaming license that has not yet 50 entered into a labor peace agreement shall produce an affidavit stating 51 it shall enter into a labor peace agreement with labor organizations 52 that are actively engaged in representing or attempting to represent 53 gaming or hospitality industry workers in the state as a mandatory 54 component of its application for an interactive gaming license. In order 55 for the commission to issue an interactive gaming license and for any 56 operations involving live studio dealers to commence, the applicant for
S. 4856 7 1 an interactive gaming license must produce documentation that it has 2 entered into a labor peace agreement with each labor organization that 3 is actively engaged in representing and attempting to represent gaming 4 and hospitality industry workers in the state. The commission shall make 5 the maintenance of such a labor peace agreement an ongoing material 6 condition of licensure as long as the interactive gaming licensee makes 7 use of live studio dealers. A license holder shall, as a condition of 8 its license, ensure that operations at a live gaming studio that involve 9 gaming or hospitality industry employees or are conducted by contrac- 10 tors, subcontractors, licensees, assignees, tenants or subtenants shall 11 be done under a labor peace agreement containing the same provisions as 12 specified in this subdivision. 13 3. Advertisements for contests and prizes offered by an interactive 14 gaming licensee shall not target prohibited participants, minors, or 15 self-excluded persons. 16 4. Interactive gaming licensees shall develop and prominently display 17 procedures on the main page of such interactive gaming licensee's plat- 18 form for the filing of a complaint by an authorized participant against 19 such interactive gaming licensee. An initial response shall be given by 20 such interactive gaming licensee to such authorized participant filing 21 the complaint within forty-eight hours of receipt. A complete response 22 shall be given by such interactive gaming licensee to such authorized 23 participant filing the complaint within ten business days of receipt. An 24 authorized participant may file a complaint alleging a violation of the 25 provisions of this article with the commission. 26 5. Interactive gaming licensees shall maintain records of all accounts 27 belonging to authorized participants and retain such records of all 28 transactions in such accounts for the preceding five years, provided, 29 however, that such records belonging to an authorized participant shall 30 be readily accessible and downloadable, without cost, by such authorized 31 participant. 32 6. The server or other equipment which is used by an interactive 33 gaming licensee to accept interactive gaming shall be physically located 34 in the licensed gaming facility and be limited to interactive gaming 35 related activities in accordance with regulations promulgated by the 36 commission. 37 7. All interactive gaming initiated in this state shall be deemed to 38 take place at the licensed gaming facility where the server or other 39 equipment used by an interactive gaming licensee to accept interactive 40 gaming is located, regardless of the authorized participant's physical 41 location within this state. 42 8. Subject to regulations promulgated by the commission, an interac- 43 tive gaming licensee may allow for authorized participants to sign up to 44 create and fund accounts on its interactive gaming platform. An interac- 45 tive gaming licensee shall adopt reasonable procedures to ensure that 46 authorized participants have no more than one interactive gaming account 47 with the interactive gaming licensee. However, nothing in this article 48 shall prohibit the use of a single account for a mobile sports wagering 49 account under section thirteen hundred sixty-seven of this chapter and 50 an interactive gaming account set forth pursuant to this article. 51 9. Authorized participants may deposit and withdraw funds to and from 52 their account on an interactive gaming platform through electronically 53 recognized payment methods, including but not limited to credit cards 54 and debit cards, or via any other means approved by the commission, 55 provided, however, that in the case of credit card payments, each 56 authorized participant's account per licensee shall be limited to a
S. 4856 8 1 credit card spending amount of two thousand five hundred dollars per 2 year. Provided further, such limitation shall not apply to other payment 3 methods or to debit cards. No interactive gaming licensee shall be 4 authorized to provide a line of credit to any authorized participant. 5 § 1506. Taxation and fees. 1. For the privilege of conducting interac- 6 tive gaming in the state, interactive gaming licensees shall pay a tax 7 equivalent to thirty and one-half percent of base taxable gross gaming 8 revenue derived from interactive gaming. Interactive gaming tax revenue 9 shall be separately maintained and returned to the state for deposit 10 into the state lottery fund for education aid. 11 2. From the state tax collected, the commission shall distribute, in 12 conjunction with the office of addiction services and supports, eleven 13 million dollars annually for problem gambling education and treatment 14 purposes. 15 § 1507. Responsible gaming requirements. As a condition of licensure, 16 each operator shall implement the following measures: 17 1. limit each authorized participant to one active and continuously 18 used account on their platform, and prevent anyone they know, or should 19 have known to be a prohibited bettor from maintaining accounts or 20 participating in any interactive gaming wagering offered by such opera- 21 tor; 22 2. adopt appropriate safeguards to ensure, to a reasonable degree of 23 certainty, that authorized participants are physically located within 24 the state when engaging in mobile interactive gaming wagering; 25 3. prohibit minors from participating in any mobile interactive gaming 26 wagering; 27 4. enable authorized participants to exclude themselves from interac- 28 tive gaming wagering and take reasonable steps to prevent such bettors 29 from engaging in wagering from which they have excluded themselves; 30 5. permit any authorized participant to permanently close an account 31 registered to such bettor, on any and all platforms supported by such 32 operator, at any time and for any reason; 33 6. implement measures to protect the privacy and online security of 34 authorized participants and their accounts; 35 7. list on each website, in a prominent place, information concerning 36 assistance for compulsive play in New York state, including a toll-free 37 number directing callers to reputable resources containing further 38 information, which shall be free of charge; 39 8. permit account holders to establish self-exclusion gaming limits on 40 a daily, weekly, and monthly basis that enable the account holder to 41 identify the maximum amount of money an account holder may deposit 42 during such period of time; 43 9. maintain a publicly accessible internet page dedicated to responsi- 44 ble play, a link to which shall appear on the operator's website and in 45 any mobile application or electronic platform on which an authorized 46 participant may place wagers. Such responsible play page shall include 47 (a) a statement of the interactive gaming licensee's policy and commit- 48 ment to responsible gaming, information regarding, or links to informa- 49 tion regarding, the risks associated with gambling and the potential 50 signs of problem gaming; (b) the availability of self-imposed responsi- 51 ble gaming limits; (c) a link to a problem gaming webpage maintained by 52 the office of addiction services and supports; and (d) such other infor- 53 mation or statements as the commission may require by rule; 54 10. submit annually a responsible gaming plan to the commission. The 55 commission shall publish the requirements for the plan;
S. 4856 9 1 11. ensure no wagering shall be based on game types not approved by 2 the commission; 3 12. when an account holder's lifetime deposits exceed two thousand 4 five hundred dollars, the interactive gaming licensee shall prevent any 5 wagering until the patron immediately acknowledges that the account 6 holder has met the deposit threshold and may elect to establish respon- 7 sible gaming limits or close the account, and the account holder has 8 received disclosures from the mobile sports wagering operator concerning 9 problem gambling resources. Once a patron has reached their lifetime 10 deposit, such patron shall annually make the acknowledgement required by 11 this subdivision; and 12 13. submit annually a problem gaming plan that was approved by the 13 commission in consultation with the office of addiction services and 14 supports that includes (a) the objectives of and timetables for imple- 15 menting such plan; (b) identification of the persons responsible for 16 implementing and maintaining such plan; (c) procedures for identifying 17 users with suspected or known problem gaming behavior; (d) procedures 18 for providing information to users concerning problem gaming identifica- 19 tion and resources; (e) procedures to prevent gaming by minors and self- 20 excluded persons; and (f) such other problem gaming information as the 21 commission may require by rule. 22 § 3. This act shall take effect immediately.