Bill Text: NY A10040 | 2023-2024 | General Assembly | Amended

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Bill Title: Includes contests wherein participants select whether athletes, in the case of sporting events, shall accumulate more or less than a target score set by an operator, as an interactive fantasy sports contest; provides a definition for interactive fantasy sports gross revenue; makes related provisions.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2024-05-08 - print number 10040a [A10040 Detail]

Download: New_York-2023-A10040-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                        10040--A

                   IN ASSEMBLY

                                       May 2, 2024
                                       ___________

        Introduced  by M. of A. PRETLOW -- read once and referred to the Commit-
          tee on Racing and Wagering  --  committee  discharged,  bill  amended,
          ordered reprinted as amended and recommitted to said committee

        AN  ACT  to  amend the racing, pari-mutuel wagering and breeding law, in
          relation to interactive fantasy sports

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. Section 1401 of the racing, pari-mutuel wagering and breed-
     2  ing law, as added by chapter 237 of the laws of 2016, is amended to read
     3  as follows:
     4    §  1401.  Definitions.  As  used  in this article, the following terms
     5  shall have the following meanings:
     6    1. ["Authorized player" shall mean an individual located in  New  York
     7  state,  who is not a prohibited player, that participates in an interac-
     8  tive fantasy sports contest offered by a registrant.
     9    2. "Collegiate sport or athletic event" shall mean a sport or athletic
    10  event offered or sponsored by or played in connection with a  public  or
    11  private  institution that offers education services beyond the secondary
    12  level.
    13    3.] "Commission" shall mean the New York state gaming commission.
    14    [4. "Entry fee" shall mean cash or cash equivalent that is paid by  an
    15  authorized  player  to  an  operator  or registrant to participate in an
    16  interactive fantasy sports contest offered by such  operator  or  regis-
    17  trant.
    18    5. "High school sport or athletic event" shall mean a sport or athlet-
    19  ic  event  offered or sponsored by or played in connection with a public
    20  or private institution that offers education services at  the  secondary
    21  level.
    22    6.  "Highly  experienced  player"  shall mean an authorized player who
    23  has:
    24    (a) entered more than one thousand contests offered by a single opera-
    25  tor or registrant; or
    26    (b) won more than three prizes valued at one thousand dollars each  or
    27  more from a single operator or registrant.
    28    7.  "Horse  racing  event"  shall  mean  any  sport  or athletic event
    29  conducted in New York state subject to the provisions of  articles  two,
    30  three,  four,  five,  six,  nine, ten and eleven of this chapter, or any

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14896-04-4
        A. 10040--A                         2

     1  sport or athletic event conducted outside of New York  state,  which  if
     2  conducted  in  New York state would be subject to the provisions of this
     3  chapter.
     4    8.]  2. "Interactive fantasy sports contest" or "contest" shall mean a
     5  game of skill wherein [one] two or more contestants compete against each
     6  other, including contests wherein participants select whether  athletes,
     7  in  the  case  of  sporting events, shall accumulate more or less than a
     8  target score set by an operator, by  using  [their]  such  participant's
     9  knowledge  and  understanding  of athletic events and athletes to select
    10  and manage rosters  of  simulated  players  whose  performance  directly
    11  corresponds  with  the actual performance of human competitors on sports
    12  teams and in sports events.
    13    [9. "Interactive fantasy sports gross revenue" shall mean  the  amount
    14  equal  to the total of all entry fees not attributable to New York state
    15  prohibited sports events that a registrant collects  from  all  players,
    16  less the total of all sums not attributable to New York state prohibited
    17  sports  events  paid  out  as winnings to all players, multiplied by the
    18  resident percentage for New York  state;  provided,  however,  that  the
    19  total  of all sums paid out as winnings to players shall not include the
    20  cash equivalent value of any merchandise or thing of value awarded as  a
    21  prize.
    22    10.] 3. "Target score" shall mean a numerical figure established by an
    23  operator that is derived from a single athlete's accumulated statistics,
    24  multiple  statistics  or  a  fantasy  score,  and for which a contestant
    25  chooses whether an identified instance or statistical achievement  shall
    26  or  shall  not occur, shall be achieved, or shall be surpassed. Use of a
    27  target score shall be an interactive fantasy sports  contest  that  does
    28  not render such a contest as sports wagering, as such term is defined in
    29  paragraph (x) of subdivision one of section thirteen hundred sixty-seven
    30  of  this  chapter,  provided the scoring criteria is offered by a regis-
    31  trant as part of a peer-to-peer interactive fantasy sports contest.
    32    4. (a) "Interactive fantasy sports operator" or "operator" shall  mean
    33  any  person or entity that offers any interactive fantasy sports contest
    34  to any authorized player through any interactive  fantasy  sports  plat-
    35  form.
    36    [11.]  (b)  An operator shall not be considered an interactive fantasy
    37  sports contest contestant by virtue of doing any of the following:
    38    (i) setting house rules for a contest;
    39    (ii) assigning a salary or target score to  any  eligible  athlete  or
    40  player;
    41    (iii) accepting an entry fee from a fantasy contest participant; or
    42    (iv) awarding or disbursing prizes.
    43    5.  "Interactive fantasy sports platform" or "platform" shall mean the
    44  combination of hardware, software, and data  networks  used  to  manage,
    45  administer, or control contests and any associated entry fees.
    46    [12.] 6. "Interactive fantasy sports registrant" or "registrant" shall
    47  mean  an operator that is registered by the commission. A registrant may
    48  utilize multiple interactive fantasy sports platforms and offer multiple
    49  contests, provided that each platform and each contest has been reviewed
    50  and approved by the commission.
    51    [13. "Minor" shall mean any person under the age of eighteen years.
    52    14.] 7. "Authorized player" or "contestant" shall mean  an  individual
    53  located  in  the state of New York, who is not a prohibited player, that
    54  participates in an interactive  fantasy  sports  contest  offered  by  a
    55  registrant and is at least twenty-one years of age.
        A. 10040--A                         3

     1    8.  "Entry  fee" shall mean cash or cash equivalent that is paid by an
     2  authorized player to an operator or  registrant  to  participate  in  an
     3  interactive  fantasy  sports  contest offered by such operator or regis-
     4  trant.
     5    9.  "Highly  experienced  player"  shall mean an authorized player who
     6  has:
     7    (a) entered more than one thousand contests offered by a single opera-
     8  tor or registrant; or
     9    (b) won more than three prizes valued at one thousand dollars each  or
    10  more from a single operator or registrant.
    11    10. "Prohibited player" shall mean:
    12    (a)  any  member,  officer, employee or agent of an operator or regis-
    13  trant;
    14    (b) any spouse, child, brother, sister or parent residing as a  member
    15  of  the  same  household  in the principal place of abode of any member,
    16  officer, employee or agent of an operator or registrant;
    17    (c) any individual with access to non-public confidential  information
    18  about contests;
    19    (d)  any amateur or professional athlete whose performance may be used
    20  to determine the outcome of a contest;
    21    (e) any sports agent, team employee, referee, or league official asso-
    22  ciated with any sport or athletic event on which contests are based;
    23    (f) any individual located in a state where the conduct of contests is
    24  expressly prohibited; or
    25    (g) any minor.
    26    [15.] 11. "Minor" shall mean any person under the  age  of  twenty-one
    27  years.
    28    12.  "Prohibited  sports  event"  shall  mean  any collegiate sport or
    29  athletic event, any high school sport or athletic  event  or  any  horse
    30  racing event.
    31    [16.]  13.  "Resident  percentage"  shall  mean,  for each interactive
    32  fantasy sports contest, the percentage, rounded to the nearest tenth  of
    33  a percent, of the total entry fees collected from players located in New
    34  York  state,  divided by the total entry fees collected from all players
    35  in interactive fantasy sports contests not prohibited in New York state.
    36    [17. "Sports event" shall mean any amateur or  professional  sport  or
    37  athletic event, except a prohibited sports event.]
    38    14.  "Interactive  fantasy sports gross revenue" shall mean the amount
    39  equal to the total of all entry fees not attributable to New York  state
    40  prohibited  sports  events  that a registrant collects from all players,
    41  less the total of all sums not attributable to New York state prohibited
    42  sports events paid out as winnings to all  players,  multiplied  by  the
    43  resident  percentage  for  New  York  state; provided, however, that the
    44  total of all sums paid out as winnings to players shall not include  the
    45  cash  equivalent  value of any merchandise or item of value awarded as a
    46  prize.
    47    § 2. Section 1402 of the racing,  pari-mutuel  wagering  and  breeding
    48  law,  as added by chapter 237 of the laws of 2016, is amended to read as
    49  follows:
    50    § 1402. Registration. 1. [(a)] No operator shall  administer,  manage,
    51  or  otherwise  make  available an interactive fantasy sports platform to
    52  persons located in New York state unless registered with the  commission
    53  pursuant to section fourteen hundred three of this article. A registrant
    54  may use multiple interactive fantasy sports platforms and offer multiple
    55  types  of contests, provided that each platform and each type of contest
    56  has been reviewed and approved by the commission. This article, and  any
        A. 10040--A                         4

     1  and  all rules and regulations adopted under the authority of this arti-
     2  cle, shall apply only to interactive fantasy sports contests  for  which
     3  an authorized player pays an entry fee.
     4    [(b) Any operator that was offering contests to persons located in New
     5  York  state  prior  to  the tenth of November, two thousand fifteen, may
     6  continue to offer contests to persons located in New  York  state  until
     7  such operator's application for registration has been approved or denied
     8  in  accordance  with  section  fourteen  hundred  three of this article,
     9  provided that such operator receives  a  temporary  permit  pursuant  to
    10  subdivision  two  of this section and files an application for registra-
    11  tion with the commission within ninety days of the promulgation of regu-
    12  lations to effectuate this article.]
    13    2. [The commission shall provide a temporary permit to  each  operator
    14  that  was offering contests pursuant to paragraph (b) of subdivision one
    15  of this section to  allow  such  operator  to  continue  to  offer  such
    16  contests,  on a provisional basis, until such operator's application for
    17  registration has been approved or  denied  in  accordance  with  section
    18  fourteen  hundred  three  of  this  article, provided that such operator
    19  meets all the requirements in section  fourteen  hundred  four  of  this
    20  article.
    21    3.]  Registrations issued by the commission shall remain in effect for
    22  [three] five  years.  The  commission  shall  establish  a  process  for
    23  renewal.  The renewal fee for all interactive fantasy sports registrants
    24  shall be one percent of interactive fantasy sports  gross  revenues  for
    25  the preceding period of registration.
    26    3.  The  initial  registration  fee  for an interactive fantasy sports
    27  operator shall be five million dollars.
    28    4. Interactive fantasy sports contests  offered  by  a  registrant  in
    29  accordance  with  the  provisions  of  this article shall not constitute
    30  gambling as defined in article two hundred twenty-five of the penal law.
    31    5. The commission shall publish a list of all operators registered  in
    32  New  York state pursuant to this section on the commission's website for
    33  public use.
    34    [6. The commission  shall  promulgate  regulations  to  implement  the
    35  provisions  of  this  article,  including the development of the initial
    36  form of the application for registration. Such regulations shall provide
    37  for the registration and operation of contests in  New  York  state  and
    38  shall  include,  but  not  be  limited  to, responsible protections with
    39  regard to compulsive play and safeguards for fair play.]
    40    § 3. The opening paragraph of subdivision 4 of  section  1403  of  the
    41  racing,  pari-mutuel  wagering and breeding law, as added by chapter 237
    42  of the laws of 2016, is amended to read as follows:
    43    Upon receipt of criminal history information pursuant  to  subdivision
    44  three  of  this  section,  the  commission shall make a determination to
    45  approve or deny an application for registration; provided, however, that
    46  before making a determination on such application, the commission  shall
    47  provide  the  subject of the record with a copy of such criminal history
    48  information and a copy of article twenty-three-A of the  correction  law
    49  and  inform such prospective applicant seeking to be credentialed of his
    50  or her right to seek correction of any incorrect  information  contained
    51  in  such  criminal  history  information pursuant to the regulations and
    52  procedures established by the division of criminal justice services. The
    53  commission  [shall]  may  deny  any  application  for  registration,  or
    54  suspend,  refuse  to  renew,  or revoke any existing registration issued
    55  pursuant to this article, upon the finding that the operator  or  regis-
    56  trant, or any partner, officer, director, or shareholder:
        A. 10040--A                         5

     1    §  4.  Paragraphs  (o) and (q) of subdivision 1 of section 1404 of the
     2  racing, pari-mutuel wagering and breeding law, as added by  chapter  237
     3  of the laws of 2016, are amended to read as follows:
     4    (o)  ensure  all  winning  outcomes reflect the relative knowledge and
     5  skill of the authorized [players] contestants and  shall  be  determined
     6  predominantly  by  one  or  more  accumulated statistical results of the
     7  performance of individuals in sports events;
     8    (q) ensure no winning outcome shall be based solely on [any] a  single
     9  performance  of  an  individual  athlete  in  a single sport or athletic
    10  event; and
    11    § 5. Section 1405 of the racing, pari-mutuel wagering and breeding law
    12  is amended by adding four new subdivisions 3, 4, 5  and  6  to  read  as
    13  follows:
    14    3.  The  provisions  of  this  chapter shall be construed liberally to
    15  promote the general welfare of the public and integrity of  the  fantasy
    16  sports industry. However, the commission may not adopt rules limiting or
    17  regulating  the  rules  or  administration  of an individual interactive
    18  fantasy contest, the statistical makeup of a  fantasy  contest,  or  the
    19  digital  platform of a fantasy contest operator. Further, the commission
    20  may not in any way limit or  restrict  the  types  of  fantasy  contests
    21  allowed  pursuant  to  this  article,  by  labeling any such contests as
    22  sports wagering as such term is defined in paragraph (x) of  subdivision
    23  one of section thirteen hundred sixty-seven of this chapter.
    24    4.  The  commission  shall  verify  that operators deploy identity and
    25  geolocation verification procedures, which may  require  the  use  of  a
    26  reputable,  independent third-party that is in the business of verifying
    27  an individual's  personally  identifiable  information  and  can  detect
    28  potential prohibited participants.
    29    5.  The  commission  shall  verify that operators employ mechanisms on
    30  such operator's platform that are designed to detect and  prevent  unau-
    31  thorized  accounts,  and  to detect and prevent fraud, money laundering,
    32  and collusion.
    33    6. Within one hundred twenty days of the effective date of this subdi-
    34  vision, the commission shall  review  and  revise  its  current  fantasy
    35  sports  rules  and  regulations, as set forth in 9 NYCRR §§ 5600-5613.4,
    36  and promulgate any needed new rules in order to effectuate  and  enforce
    37  all provisions of this article.
    38    §  6.  The  opening  paragraph of subdivision 1 of section 1406 of the
    39  racing, pari-mutuel wagering and breeding law, as added by  chapter  237
    40  of the laws of 2016, is amended to read as follows:
    41    Each  [registrant]  operator  shall  annually  submit  a report to the
    42  commission no later than the thirtieth of June of each year, which shall
    43  include the following information as it shall apply to accounts held  by
    44  authorized players located in New York state:
    45    §  7.  Section  1408  of the racing, pari-mutuel wagering and breeding
    46  law, as added by chapter 237 of the laws of 2016, is amended to read  as
    47  follows:
    48    § 1408. Additional regulatory costs. The commission may assess annual-
    49  ly, in arrears, on each [registrant] operator proportional to the inter-
    50  active  fantasy sports gross revenue of such registrant in the preceding
    51  year compared to the aggregate interactive fantasy sports gross  revenue
    52  of all registrants in the preceding year actual costs necessary to regu-
    53  late in accordance with the provisions of this article. Such assessments
    54  shall be made only within amounts appropriated therefor.
    55    § 8. This act shall take effect immediately.