Bill Text: NY S09044 | 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 1-0)

Status: (Introduced - Dead) 2024-05-14 - REPORTED AND COMMITTED TO FINANCE [S09044 Detail]

Download: New_York-2023-S09044-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         9044--A

                    IN SENATE

                                     April 11, 2024
                                       ___________

        Introduced  by  Sen. ADDABBO -- read twice and ordered printed, and when
          printed to be committed to the Committee on Racing, Gaming and  Wager-
          ing  --  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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14896-03-4
        S. 9044--A                          2

     1    (b)  won more than three prizes valued at one thousand dollars each or
     2  more from a single operator or registrant.
     3    7.  "Horse  racing  event"  shall  mean  any  sport  or athletic event
     4  conducted in New York state subject to the provisions of  articles  two,
     5  three,  four,  five,  six,  nine, ten and eleven of this chapter, or any
     6  sport or athletic event conducted outside of New York  state,  which  if
     7  conducted  in  New York state would be subject to the provisions of this
     8  chapter.
     9    8.] 2. "Interactive fantasy sports contest" or "contest" shall mean  a
    10  game of skill wherein [one] two or more contestants compete against each
    11  other,  including contests wherein participants select whether athletes,
    12  in the case of sporting events, shall accumulate more  or  less  than  a
    13  target  score  set  by  an operator, by using [their] such participant's
    14  knowledge and understanding of athletic events and  athletes  to  select
    15  and  manage  rosters  of  simulated  players  whose performance directly
    16  corresponds with the actual performance of human competitors  on  sports
    17  teams and in sports events.
    18    [9.  "Interactive  fantasy sports gross revenue" shall mean the amount
    19  equal to the total of all entry fees not attributable to New York  state
    20  prohibited  sports  events  that a registrant collects from all players,
    21  less the total of all sums not attributable to New York state prohibited
    22  sports events paid out as winnings to all  players,  multiplied  by  the
    23  resident  percentage  for  New  York  state; provided, however, that the
    24  total of all sums paid out as winnings to players shall not include  the
    25  cash  equivalent value of any merchandise or thing of value awarded as a
    26  prize.
    27    10.] 3. "Target score" shall mean a numerical figure established by an
    28  operator that is derived from a single athlete's accumulated statistics,
    29  multiple statistics or a fantasy  score,  and  for  which  a  contestant
    30  chooses  whether an identified instance or statistical achievement shall
    31  or shall not occur, shall be achieved, or shall be surpassed. Use  of  a
    32  target  score  shall  be an interactive fantasy sports contest that does
    33  not render such a contest as sports wagering, as such term is defined in
    34  paragraph (x) of subdivision one of section thirteen hundred sixty-seven
    35  of this chapter, provided the scoring criteria is offered  by  a  regis-
    36  trant as part of a peer-to-peer interactive fantasy sports contest.
    37    4.  (a) "Interactive fantasy sports operator" or "operator" shall mean
    38  any person or entity that offers any interactive fantasy sports  contest
    39  to  any  authorized  player through any interactive fantasy sports plat-
    40  form.
    41    [11.] (b) An operator shall not be considered an  interactive  fantasy
    42  sports contest contestant by virtue of doing any of the following:
    43    (i) setting house rules for a contest;
    44    (ii)  assigning  a  salary  or target score to any eligible athlete or
    45  player;
    46    (iii) accepting an entry fee from a fantasy contest participant; or
    47    (iv) awarding or disbursing prizes.
    48    5. "Interactive fantasy sports platform" or "platform" shall mean  the
    49  combination  of  hardware,  software,  and data networks used to manage,
    50  administer, or control contests and any associated entry fees.
    51    [12.] 6. "Interactive fantasy sports registrant" or "registrant" shall
    52  mean an operator that is registered by the commission. A registrant  may
    53  utilize multiple interactive fantasy sports platforms and offer multiple
    54  contests, provided that each platform and each contest has been reviewed
    55  and approved by the commission.
    56    [13. "Minor" shall mean any person under the age of eighteen years.
        S. 9044--A                          3

     1    14.]  7.  "Authorized player" or "contestant" shall mean an individual
     2  located in the state of New York, who is not a prohibited  player,  that
     3  participates  in  an  interactive  fantasy  sports  contest offered by a
     4  registrant and is at least twenty-one years of age.
     5    8.  "Entry  fee" shall mean cash or cash equivalent that is paid by an
     6  authorized player to an operator or  registrant  to  participate  in  an
     7  interactive  fantasy  sports  contest offered by such operator or regis-
     8  trant.
     9    9. "Highly experienced player" shall mean  an  authorized  player  who
    10  has:
    11    (a) entered more than one thousand contests offered by a single opera-
    12  tor or registrant; or
    13    (b)  won more than three prizes valued at one thousand dollars each or
    14  more from a single operator or registrant.
    15    10. "Prohibited player" shall mean:
    16    (a) any member, officer, employee or agent of an  operator  or  regis-
    17  trant;
    18    (b)  any spouse, child, brother, sister or parent residing as a member
    19  of the same household in the principal place of  abode  of  any  member,
    20  officer, employee or agent of an operator or registrant;
    21    (c)  any individual with access to non-public confidential information
    22  about contests;
    23    (d) any amateur or professional athlete whose performance may be  used
    24  to determine the outcome of a contest;
    25    (e) any sports agent, team employee, referee, or league official asso-
    26  ciated with any sport or athletic event on which contests are based;
    27    (f) any individual located in a state where the conduct of contests is
    28  expressly prohibited; or
    29    (g) any minor.
    30    [15.]  11.  "Minor"  shall mean any person under the age of twenty-one
    31  years.
    32    12. "Prohibited sports event"  shall  mean  any  collegiate  sport  or
    33  athletic  event,  any  high  school sport or athletic event or any horse
    34  racing event.
    35    [16.] 13. "Resident  percentage"  shall  mean,  for  each  interactive
    36  fantasy  sports contest, the percentage, rounded to the nearest tenth of
    37  a percent, of the total entry fees collected from players located in New
    38  York state, divided by the total entry fees collected from  all  players
    39  in interactive fantasy sports contests not prohibited in New York state.
    40    [17.  "Sports  event"  shall mean any amateur or professional sport or
    41  athletic event, except a prohibited sports event.]
    42    14. "Interactive fantasy sports gross revenue" shall mean  the  amount
    43  equal  to the total of all entry fees not attributable to New York state
    44  prohibited sports events that a registrant collects  from  all  players,
    45  less the total of all sums not attributable to New York state prohibited
    46  sports  events  paid  out  as winnings to all players, multiplied by the
    47  resident percentage for New York  state;  provided,  however,  that  the
    48  total  of all sums paid out as winnings to players shall not include the
    49  cash equivalent value of any merchandise or item of value awarded  as  a
    50  prize.
    51    §  2.  Section  1402  of the racing, pari-mutuel wagering and breeding
    52  law, as added by chapter 237 of the laws of 2016, is amended to read  as
    53  follows:
    54    §  1402.  Registration. 1. [(a)] No operator shall administer, manage,
    55  or otherwise make available an interactive fantasy  sports  platform  to
    56  persons  located in New York state unless registered with the commission
        S. 9044--A                          4

     1  pursuant to section fourteen hundred three of this article. A registrant
     2  may use multiple interactive fantasy sports platforms and offer multiple
     3  types of contests, provided that each platform and each type of  contest
     4  has  been reviewed and approved by the commission. This article, and any
     5  and all rules and regulations adopted under the authority of this  arti-
     6  cle,  shall  apply only to interactive fantasy sports contests for which
     7  an authorized player pays an entry fee.
     8    [(b) Any operator that was offering contests to persons located in New
     9  York state prior to the tenth of November,  two  thousand  fifteen,  may
    10  continue  to  offer  contests to persons located in New York state until
    11  such operator's application for registration has been approved or denied
    12  in accordance with section  fourteen  hundred  three  of  this  article,
    13  provided  that  such  operator  receives  a temporary permit pursuant to
    14  subdivision two of this section and files an application  for  registra-
    15  tion with the commission within ninety days of the promulgation of regu-
    16  lations to effectuate this article.]
    17    2.  [The  commission shall provide a temporary permit to each operator
    18  that was offering contests pursuant to paragraph (b) of subdivision  one
    19  of  this  section  to  allow  such  operator  to  continue to offer such
    20  contests, on a provisional basis, until such operator's application  for
    21  registration  has  been  approved  or  denied in accordance with section
    22  fourteen hundred three of this  article,  provided  that  such  operator
    23  meets  all  the  requirements  in  section fourteen hundred four of this
    24  article.
    25    3.] Registrations issued by the commission shall remain in effect  for
    26  [three]  five  years.  The  commission  shall  establish  a  process for
    27  renewal. The renewal fee for all interactive fantasy sports  registrants
    28  shall  be  one  percent of interactive fantasy sports gross revenues for
    29  the preceding period of registration.
    30    3. The initial registration fee  for  an  interactive  fantasy  sports
    31  operator shall be five million dollars.
    32    4.  Interactive  fantasy  sports  contests  offered by a registrant in
    33  accordance with the provisions of  this  article  shall  not  constitute
    34  gambling as defined in article two hundred twenty-five of the penal law.
    35    5.  The commission shall publish a list of all operators registered in
    36  New York state pursuant to this section on the commission's website  for
    37  public use.
    38    [6.  The  commission  shall  promulgate  regulations  to implement the
    39  provisions of this article, including the  development  of  the  initial
    40  form of the application for registration. Such regulations shall provide
    41  for  the  registration  and  operation of contests in New York state and
    42  shall include, but not  be  limited  to,  responsible  protections  with
    43  regard to compulsive play and safeguards for fair play.]
    44    §  3.  The  opening  paragraph of subdivision 4 of section 1403 of the
    45  racing, pari-mutuel wagering and breeding law, as added by  chapter  237
    46  of the laws of 2016, is amended to read as follows:
    47    Upon  receipt  of criminal history information pursuant to subdivision
    48  three of this section, the commission  shall  make  a  determination  to
    49  approve or deny an application for registration; provided, however, that
    50  before  making a determination on such application, the commission shall
    51  provide the subject of the record with a copy of such  criminal  history
    52  information  and  a copy of article twenty-three-A of the correction law
    53  and inform such prospective applicant seeking to be credentialed of  his
    54  or  her  right to seek correction of any incorrect information contained
    55  in such criminal history information pursuant  to  the  regulations  and
    56  procedures established by the division of criminal justice services. The
        S. 9044--A                          5

     1  commission  [shall]  may  deny  any  application  for  registration,  or
     2  suspend, refuse to renew, or revoke  any  existing  registration  issued
     3  pursuant  to  this article, upon the finding that the operator or regis-
     4  trant, or any partner, officer, director, or shareholder:
     5    §  4.  Paragraphs  (o) and (q) of subdivision 1 of section 1404 of the
     6  racing, pari-mutuel wagering and breeding law, as added by  chapter  237
     7  of the laws of 2016, are amended to read as follows:
     8    (o)  ensure  all  winning  outcomes reflect the relative knowledge and
     9  skill of the authorized [players] contestants and  shall  be  determined
    10  predominantly  by  one  or  more  accumulated statistical results of the
    11  performance of individuals in sports events;
    12    (q) ensure no winning outcome shall be based solely on [any] a  single
    13  performance  of  an  individual  athlete  in  a single sport or athletic
    14  event; and
    15    § 5. Section 1405 of the racing, pari-mutuel wagering and breeding law
    16  is amended by adding four new subdivisions 3, 4, 5  and  6  to  read  as
    17  follows:
    18    3.  The  provisions  of  this  chapter shall be construed liberally to
    19  promote the general welfare of the public and integrity of  the  fantasy
    20  sports industry. However, the commission may not adopt rules limiting or
    21  regulating  the  rules  or  administration  of an individual interactive
    22  fantasy contest, the statistical makeup of a  fantasy  contest,  or  the
    23  digital  platform of a fantasy contest operator. Further, the commission
    24  may not in any way limit or  restrict  the  types  of  fantasy  contests
    25  allowed  pursuant  to  this  article,  by  labeling any such contests as
    26  sports wagering as such term is defined in paragraph (x) of  subdivision
    27  one of section thirteen hundred sixty-seven of this chapter.
    28    4.  The  commission  shall  verify  that operators deploy identity and
    29  geolocation verification procedures, which may  require  the  use  of  a
    30  reputable,  independent third-party that is in the business of verifying
    31  an individual's  personally  identifiable  information  and  can  detect
    32  potential prohibited participants.
    33    5.  The  commission  shall  verify that operators employ mechanisms on
    34  such operator's platform that are designed to detect and  prevent  unau-
    35  thorized  accounts,  and  to detect and prevent fraud, money laundering,
    36  and collusion.
    37    6. Within one hundred twenty days of the effective date of this subdi-
    38  vision, the commission shall  review  and  revise  its  current  fantasy
    39  sports  rules  and  regulations, as set forth in 9 NYCRR §§ 5600-5613.4,
    40  and promulgate any needed new rules in order to effectuate  and  enforce
    41  all provisions of this article.
    42    §  6.  The  opening  paragraph of subdivision 1 of section 1406 of the
    43  racing, pari-mutuel wagering and breeding law, as added by  chapter  237
    44  of the laws of 2016, is amended to read as follows:
    45    Each  [registrant]  operator  shall  annually  submit  a report to the
    46  commission no later than the thirtieth of June of each year, which shall
    47  include the following information as it shall apply to accounts held  by
    48  authorized players located in New York state:
    49    §  7.  Section  1408  of the racing, pari-mutuel wagering and breeding
    50  law, as added by chapter 237 of the laws of 2016, is amended to read  as
    51  follows:
    52    § 1408. Additional regulatory costs. The commission may assess annual-
    53  ly, in arrears, on each [registrant] operator proportional to the inter-
    54  active  fantasy sports gross revenue of such registrant in the preceding
    55  year compared to the aggregate interactive fantasy sports gross  revenue
    56  of all registrants in the preceding year actual costs necessary to regu-
        S. 9044--A                          6

     1  late in accordance with the provisions of this article. Such assessments
     2  shall be made only within amounts appropriated therefor.
     3    § 8. This act shall take effect immediately.