A10736 Summary:
BILL NO | A10736 |
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SAME AS | SAME AS S08153 |
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SPONSOR | Pretlow |
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COSPNSR | Dinowitz, Zebrowski, Garbarino, Murray, Jean-Pierre, Ceretto, Lupinacci |
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MLTSPNSR | |
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Add Art 14 §§1400 - 1412, amd §104, RWB L | |
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Relates to the registration and regulation of interactive fantasy sports contests. |
A10736 Actions:
BILL NO | A10736 | |||||||||||||||||||||||||||||||||||||||||||||||||
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06/14/2016 | referred to racing and wagering | |||||||||||||||||||||||||||||||||||||||||||||||||
06/15/2016 | reported referred to codes | |||||||||||||||||||||||||||||||||||||||||||||||||
06/15/2016 | reported referred to ways and means | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | reported referred to rules | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | reported | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | rules report cal.511 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2016 | ordered to third reading rules cal.511 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2016 | passed assembly | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2016 | delivered to senate | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2016 | REFERRED TO RULES | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2016 | SUBSTITUTED FOR S8153 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2016 | 3RD READING CAL.2014 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2016 | PASSED SENATE | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2016 | RETURNED TO ASSEMBLY | |||||||||||||||||||||||||||||||||||||||||||||||||
08/02/2016 | delivered to governor | |||||||||||||||||||||||||||||||||||||||||||||||||
08/03/2016 | signed chap.237 |
A10736 Committee Votes:
Pretlow | Aye | Garbarino | Aye | ||||||
Markey | Aye | Tedisco | Nay | ||||||
Gunther | Aye | Lawrence | Aye | ||||||
Miller | Aye | ||||||||
Goldfeder | Aye | ||||||||
Solages | Aye | ||||||||
Woerner | Aye | ||||||||
Santabarbara | Nay | ||||||||
Lentol | Aye | Graf | Aye | ||||||
Schimminger | Aye | Giglio | Aye | ||||||
Weinstein | Nay | McKevitt | Aye | ||||||
Hevesi | Aye | Montesano | Aye | ||||||
Wright | Aye | Ra | Aye | ||||||
Pretlow | Aye | Tenney | Aye | ||||||
Cook | Aye | ||||||||
Cymbrowitz | Aye | ||||||||
Titus | Aye | ||||||||
O'Donnell | Nay | ||||||||
Lavine | Aye | ||||||||
Perry | Aye | ||||||||
Zebrowski | Aye | ||||||||
Abinanti | Nay | ||||||||
Weprin | Aye | ||||||||
Mosley | Aye | ||||||||
Farrell | Aye | Oaks | Aye | ||||||
Lentol | Aye | Crouch | Aye | ||||||
Schimminger | Aye | Barclay | Aye | ||||||
Gantt | Aye | Fitzpatrick | Nay | ||||||
Weinstein | Nay | Saladino | Aye | ||||||
Glick | Nay | Hawley | Aye | ||||||
Nolan | Aye | Duprey | Aye | ||||||
Pretlow | Aye | Corwin | Aye | ||||||
Perry | Aye | Malliotakis | Aye | ||||||
Colton | Aye | Walter | Aye | ||||||
Cook | Aye | ||||||||
Cahill | Nay | ||||||||
Aubry | Aye | ||||||||
Hooper | Aye | ||||||||
Thiele | Aye | ||||||||
Wright | Aye | ||||||||
Cusick | Aye | ||||||||
Ortiz | Aye | ||||||||
Benedetto | Aye | ||||||||
Markey | Aye | ||||||||
Moya | Nay | ||||||||
Weprin | Aye | ||||||||
Rodriguez | Aye | ||||||||
Ramos | Aye | ||||||||
Braunstein | Excused | ||||||||
Heastie | Aye | Kolb | Aye | ||||||
Gottfried | Aye | Tedisco | Nay | ||||||
Lentol | Aye | Oaks | Aye | ||||||
Farrell | Aye | Butler | Aye | ||||||
Gantt | Aye | Crouch | Aye | ||||||
Nolan | Aye | Finch | Excused | ||||||
Weinstein | Aye | Barclay | Aye | ||||||
Hooper | Aye | Raia | Aye | ||||||
Ortiz | Aye | Duprey | Aye | ||||||
Pretlow | Aye | ||||||||
Cook | Aye | ||||||||
Glick | Aye | ||||||||
Morelle | Aye | ||||||||
Aubry | Aye | ||||||||
Englebright | Aye | ||||||||
Wright | Excused | ||||||||
Dinowitz | Aye | ||||||||
Colton | Aye | ||||||||
Magnarelli | Aye | ||||||||
Perry | Aye | ||||||||
Markey | Aye | ||||||||
Go to top
A10736 Floor Votes:
Yes
Abbate
Yes
Crespo
Yes
Gottfried
Yes
Lopez
ER
Palumbo
No
Simon
No
Abinanti
Yes
Crouch
Yes
Graf
Yes
Lupardo
Yes
Paulin
Yes
Simotas
Yes
Arroyo
ER
Curran
No
Gunther
Yes
Lupinacci
Yes
Peoples-Stokes
Yes
Skartados
No
Aubry
Yes
Cusick
Yes
Harris
Yes
Magee
Yes
Perry
Yes
Skoufis
Yes
Barclay
Yes
Cymbrowitz
Yes
Hawley
Yes
Magnarelli
Yes
Pichardo
Yes
Solages
NV
Barrett
Yes
Davila
Yes
Hevesi
Yes
Malliotakis
Yes
Pretlow
Yes
Stec
ER
Barron
Yes
DenDekker
ER
Hikind
Yes
Markey
Yes
Quart
Yes
Steck
Yes
Benedetto
Yes
Dilan
Yes
Hooper
Yes
Mayer
Yes
Ra
Yes
Stirpe
ER
Bichotte
Yes
Dinowitz
Yes
Hunter
Yes
McDonald
Yes
Raia
No
Tedisco
Yes
Blake
ER
DiPietro
Yes
Hyndman
Yes
McDonough
Yes
Ramos
ER
Tenney
Yes
Blankenbush
Yes
Duprey
ER
Jaffee
Yes
McKevitt
Yes
Richardson
Yes
Thiele
Yes
Brabenec
Yes
Englebright
Yes
Jean-Pierre
Yes
McLaughlin
Yes
Rivera
Yes
Titone
Yes
Braunstein
Yes
Fahy
No
Johns
Yes
Miller
No
Robinson
Yes
Titus
ER
Brennan
Yes
Farrell
Yes
Joyner
Yes
Montesano
Yes
Rodriguez
Yes
Walker
Yes
Brindisi
ER
Finch
ER
Katz
Yes
Morelle
Yes
Rosenthal
Yes
Walter
Yes
Bronson
No
Fitzpatrick
Yes
Kavanagh
Yes
Mosley
Yes
Rozic
No
Weinstein
No
Buchwald
No
Friend
Yes
Kearns
Yes
Moya
Yes
Russell
Yes
Weprin
Yes
Butler
No
Galef
ER
Kim
Yes
Murray
No
Ryan
Yes
Williams
No
Cahill
Yes
Gantt
Yes
Kolb
Yes
Nojay
Yes
Saladino
No
Woerner
Yes
Cancel
Yes
Garbarino
Yes
Lalor
No
Nolan
No
Santabarbara
ER
Wozniak
No
Castorina
Yes
Giglio
Yes
Lavine
Yes
Oaks
Yes
Schimel
ER
Wright
Yes
Ceretto
Yes
Gjonaj
Yes
Lawrence
No
O'Donnell
Yes
Schimminger
Yes
Zebrowski
Yes
Colton
No
Glick
Yes
Lentol
ER
Ortiz
Yes
Seawright
Yes
Mr. Speaker
Yes
Cook
Yes
Goldfeder
Yes
Lifton
Yes
Otis
Yes
Sepulveda
Yes
Corwin
No
Goodell
Yes
Linares
Yes
Palmesano
Yes
Simanowitz
‡ Indicates voting via videoconference
A10736 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)   BILL NUMBER: A10736 SPONSOR: Rules (Pretlow)
  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. Such operators would also receive a temporary permit to operate under the required safeguards and minimum standards until their application has been approved or denied. Registrations 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 assigns 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 gross revenue for the privilege of conducting interactive fantasy sports contests in New York State, as well as an additional 0.5% tax that is not to exceed $50,000 annually. Section 1408 allows the Commission to assess the actual costs necessary to regulate registrants pursuant to this article. Section 1409 requires the Commission to direct all taxes, interest, and penalties collected to the State Lottery Fund for education. Section 1410 authorizes the Commission to perform audits of the books and records of operators with permits and registrants, for the purpose of determining the sufficiency of tax payments. Section 1411 provides authorization for interactive fantasy sports contests registered and conducted pursuant to this chapter. Section 1412 prohibits the conduct of unregistered interactive fantasy sports contests. Section 2 of the bill would give the Commission the authority and responsibility of registering and regulating interactive fantasy sports in New York State. Section 3 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 "paid" 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 all interactive fantasy sports contests with an entry fee, including daily and season-long. 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 taxing interactive fantasy sports contests, and directing such funds to the State Lottery Fund, this bill will also bring about a new and abundant source of revenue for education in New York State.   LEGISLATIVE HISTORY: This is new legislation.   FISCAL IMPLICATION: To be determined.   EFFECTIVE DATE: This act would take effect immediately.
A10736 Text:
Go to top STATE OF NEW YORK ________________________________________________________________________ 10736 IN ASSEMBLY June 14, 2016 ___________ Introduced by COMMITTEE ON RULES -- (at request of M. of A. Pretlow) -- read once and referred to the Committee on Racing and Wagering 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 1408. Additional regulatory costs. 14 1409. Disposition of taxes. 15 1410. Determination of tax liability. 16 1411. Contests authorized. 17 1412. Contests prohibited. 18 § 1400. Legislative findings and purpose. 1. The legislature hereby 19 finds and declares that: 20 (a) Interactive fantasy sports are not games of chance because they 21 consist of fantasy or simulation sports games or contests in which the 22 fantasy or simulation sports teams are selected based upon the skill and 23 knowledge of the participants and not based on the current membership of 24 an actual team that is a member of an amateur or professional sports 25 organization; 26 (b) Interactive fantasy sports contests are not wagers on future 27 contingent events not under the contestants' control or influence 28 because contestants have control over which players they choose and the 29 outcome of each contest is not dependent upon the performance of any one 30 player or any one actual team. The outcome of any fantasy sports contest EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15896-03-6A. 10736 2 1 does not correspond to the outcome of any one sporting event. Instead, 2 the outcome depends on how the performances of participants' fantasy 3 roster choices compare to the performance of others' roster choices. 4 2. Based on the findings in subdivision one of this section, the 5 legislature declares that interactive fantasy sports do not constitute 6 gambling in New York state as defined in article two hundred twenty-five 7 of the penal law. 8 3. The legislature further finds that as the internet has become an 9 integral part of society, and interactive fantasy sports a major form of 10 entertainment for many consumers, any interactive fantasy sports 11 enforcement and regulatory structure must begin from the bedrock premise 12 that participation in a lawful and licensed interactive fantasy sports 13 industry is a privilege and not a right, and that regulatory oversight 14 is intended to safeguard the integrity of the games and participants and 15 to ensure accountability and the public trust. 16 § 1401. Definitions. As used in this article, the following terms 17 shall have the following meanings: 18 1. "Authorized player" shall mean an individual located in New York 19 state, who is not a prohibited player, that participates in an interac- 20 tive fantasy sports contest offered by a registrant. 21 2. "Collegiate sport or athletic event" shall mean a sport or athletic 22 event offered or sponsored by or played in connection with a public or 23 private institution that offers education services beyond the secondary 24 level. 25 3. "Commission" shall mean the New York state gaming commission. 26 4. "Entry fee" shall mean cash or cash equivalent that is paid by an 27 authorized player to an operator or registrant to participate in an 28 interactive fantasy sports contest offered by such operator or regis- 29 trant. 30 5. "High school sport or athletic event" shall mean a sport or athlet- 31 ic event offered or sponsored by or played in connection with a public 32 or private institution that offers education services at the secondary 33 level. 34 6. "Highly experienced player" shall mean an authorized player who 35 has: 36 (a) entered more than one thousand contests offered by a single opera- 37 tor or registrant; or 38 (b) won more than three prizes valued at one thousand dollars each or 39 more from a single operator or registrant. 40 7. "Horse racing event" shall mean any sport or athletic event 41 conducted in New York state subject to the provisions of articles two, 42 three, four, five, six, nine, ten and eleven of this chapter, or any 43 sport or athletic event conducted outside of New York state, which if 44 conducted in New York state would be subject to the provisions of this 45 chapter. 46 8. "Interactive fantasy sports contest" or "contest" shall mean a game 47 of skill wherein one or more contestants compete against each other by 48 using their knowledge and understanding of athletic events and athletes 49 to select and manage rosters of simulated players whose performance 50 directly corresponds with the actual performance of human competitors on 51 sports teams and in sports events. 52 9. "Interactive fantasy sports gross revenue" shall mean the amount 53 equal to the total of all entry fees not attributable to New York state 54 prohibited sports events that a registrant collects from all players, 55 less the total of all sums not attributable to New York state prohibited 56 sports events paid out as winnings to all players, multiplied by theA. 10736 3 1 resident percentage for New York state; provided, however, that the 2 total of all sums paid out as winnings to players shall not include the 3 cash equivalent value of any merchandise or thing of value awarded as a 4 prize. 5 10. "Interactive fantasy sports operator" or "operator" shall mean any 6 person or entity that offers any interactive fantasy sports contest to 7 any authorized player through any interactive fantasy sports platform. 8 11. "Interactive fantasy sports platform" or "platform" shall mean the 9 combination of hardware, software, and data networks used to manage, 10 administer, or control contests and any associated entry fees. 11 12. "Interactive fantasy sports registrant" or "registrant" shall mean 12 an operator that is registered by the commission. A registrant may 13 utilize multiple interactive fantasy sports platforms and offer multiple 14 contests, provided that each platform and each contest has been reviewed 15 and approved by the commission. 16 13. "Minor" shall mean any person under the age of eighteen years. 17 14. "Prohibited player" shall mean: 18 (a) any member, officer, employee or agent of an operator or regis- 19 trant; 20 (b) any spouse, child, brother, sister or parent residing as a member 21 of the same household in the principal place of abode of any member, 22 officer, employee or agent of an operator or registrant; 23 (c) any individual with access to non-public confidential information 24 about contests; 25 (d) any amateur or professional athlete whose performance may be used 26 to determine the outcome of a contest; 27 (e) any sports agent, team employee, referee, or league official asso- 28 ciated with any sport or athletic event on which contests are based; 29 (f) any individual located in a state where the conduct of contests is 30 expressly prohibited; or 31 (g) any minor. 32 15. "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. "Resident percentage" shall mean, for each interactive fantasy 36 sports contest, the percentage, rounded to the nearest tenth of a 37 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 § 1402. Registration. 1. (a) No operator shall administer, manage, or 43 otherwise make available an interactive fantasy sports platform to 44 persons located in New York state unless registered with the commission 45 pursuant to section fourteen hundred three of this article. A registrant 46 may use multiple interactive fantasy sports platforms and offer multiple 47 types of contests, provided that each platform and each type of contest 48 has been reviewed and approved by the commission. This article, and any 49 and all rules and regulations adopted under the authority of this arti- 50 cle, shall apply only to interactive fantasy sports contests for which 51 an authorized player pays an entry fee. 52 (b) Any operator that was offering contests to persons located in New 53 York state prior to the tenth of November, two thousand fifteen, may 54 continue to offer contests to persons located in New York state until 55 such operator's application for registration has been approved or denied 56 in accordance with section fourteen hundred three of this article,A. 10736 4 1 provided that such operator receives a temporary permit pursuant to 2 subdivision two of this section and files an application for registra- 3 tion with the commission within ninety days of the promulgation of regu- 4 lations to effectuate this article. 5 2. The commission shall provide a temporary permit to each operator 6 that was offering contests pursuant to paragraph (b) of subdivision one 7 of this section to allow such operator to continue to offer such 8 contests, on a provisional basis, until such operator's application for 9 registration has been approved or denied in accordance with section 10 fourteen hundred three of this article, provided that such operator 11 meets all the requirements in section fourteen hundred four of this 12 article. 13 3. Registrations issued by the commission shall remain in effect for 14 three years. The commission shall establish a process for renewal. 15 4. Interactive fantasy sports contests offered by a registrant in 16 accordance with the provisions of this article shall not constitute 17 gambling as defined in article two hundred twenty-five of the penal law. 18 5. The commission shall publish a list of all operators registered in 19 New York state pursuant to this section on the commission's website for 20 public use. 21 6. The commission shall promulgate regulations to implement the 22 provisions of this article, including the development of the initial 23 form of the application for registration. Such regulations shall 24 provide for the registration and operation of contests in New York state 25 and shall include, but not be limited to, responsible protections with 26 regard to compulsive play and safeguards for fair play. 27 § 1403. Scope of registration review. 1. The commission shall 28 prescribe the initial form of the application for registration which 29 shall require, but not be limited to: 30 (a) the full name and principal address of the operator; 31 (b) if a corporation, the name of the state in which incorporated and 32 the full names and addresses of any partner, officer, director, share- 33 holder holding ten percent or more equity, and ultimate equitable 34 owners; 35 (c) if a business entity other than a corporation, the full names and 36 addresses of the principals, partners, shareholders holding five percent 37 or more equity, and ultimate equitable owners; 38 (d) whether such corporation or entity files information and reports 39 with the United States Securities and Exchange Commission as required by 40 section thirteen of the Securities Exchange Act of 1934, 15 U.S.C. §§ 41 78a-78kk; or whether the securities of the corporation or entity are 42 regularly traded on an established securities market in the United 43 States; 44 (e) the type and estimated number of contests to be conducted annual- 45 ly; 46 (f) a statement of the assets and liabilities of the operator. 47 2. The commission may require the full names and addresses of the 48 officers and directors of any creditor of the operator, and of those 49 stockholders who hold more than ten percent of the stock of the credi- 50 tor. 51 3. Upon receipt of an application for registration for each individual 52 listed on such application as an officer or director, the commission 53 shall submit to the division of criminal justice services a set of fing- 54 erprints, and the division of criminal justice services processing fee 55 imposed pursuant to subdivision eight-a of section eight hundred thir- 56 ty-seven of the executive law and any fee imposed by the federal bureauA. 10736 5 1 of investigation. Upon receipt of the fingerprints, the division of 2 criminal justice services shall promptly forward a set of the individ- 3 ual's fingerprints to the federal bureau of investigation for the 4 purpose of a nationwide criminal history record check to determine 5 whether such individual has been convicted of a criminal offense in any 6 state other than New York or in a federal jurisdiction. The division of 7 criminal justice services shall promptly provide the requested criminal 8 history information to the commission. For the purposes of this section, 9 the term "criminal history information" shall mean a record of all 10 convictions of crimes and any pending criminal charges maintained on an 11 individual by the division of criminal justice services and the federal 12 bureau of investigation. All such criminal history information sent to 13 the commission pursuant to this subdivision shall be confidential and 14 shall not be published or in any way disclosed to persons other than the 15 commission, unless otherwise authorized by law. 16 4. Upon receipt of criminal history information pursuant to subdivi- 17 sion three of this section, the commission shall make a determination to 18 approve or deny an application for registration; provided, however, that 19 before making a determination on such application, the commission shall 20 provide the subject of the record with a copy of such criminal history 21 information and a copy of article twenty-three-A of the correction law 22 and inform such prospective applicant seeking to be credentialed of his 23 or her right to seek correction of any incorrect information contained 24 in such criminal history information pursuant to the regulations and 25 procedures established by the division of criminal justice services. 26 The commission shall deny any application for registration, or suspend, 27 refuse to renew, or revoke any existing registration issued pursuant to 28 this article, upon the finding that the operator or registrant, or any 29 partner, officer, director, or shareholder: 30 (a) has knowingly made a false statement of material fact or has 31 deliberately failed to disclose any information required by the commis- 32 sion; 33 (b) has had a registration or license to offer or conduct contests 34 denied, suspended, or revoked in any other state or country for just 35 cause; 36 (c) has legally defaulted in the payment of any obligation or debt due 37 to any state or political subdivision; or 38 (d) has at any time knowingly failed to comply with any requirement 39 outlined in section fourteen hundred four of this article, any other 40 provision of this article, any regulations promulgated by the commission 41 or any additional requirements of the commission. 42 5. All determinations to approve or deny an application pursuant to 43 this article shall be performed in a manner consistent with subdivision 44 sixteen of section two hundred ninety-six of the executive law and arti- 45 cle twenty-three-A of the correction law. When the commission denies an 46 application, the operator shall be afforded notice and the right to be 47 heard and offer proof in opposition to such determination in accordance 48 with the regulations of the commission. 49 § 1404. Required safeguards, minimum standards. 1. As a condition of 50 registration in New York state, each operator and registrant shall 51 implement the following measures: 52 (a) limit each authorized player to one active and continuously used 53 account, and prevent prohibited players from maintaining accounts or 54 participating in any contest offered by such operator or registrant; 55 (b) prohibit minors from participating in any contest, which includes:A. 10736 6 1 (i) if a registrant becomes or is made aware that a minor has partic- 2 ipated in one of its contests, such registrant shall promptly, within no 3 more than two business days, refund any deposit received from the minor, 4 whether or not the minor has engaged in or attempted to engage in a 5 contest; provided, however, that any refund may be offset by any prizes 6 already awarded; 7 (ii) each registrant shall publish and facilitate parental control 8 procedures to allow parents or guardians to exclude minors from access 9 to any contest or platform. Such procedures shall include a toll-free 10 number to call for help in establishing such parental controls; and 11 (iii) each registrant shall take appropriate steps to confirm that an 12 individual opening an account is not a minor. 13 (c) when referencing the chances or likelihood of winning in adver- 14 tisements or upon contest entry, make clear and conspicuous statements 15 that are not inaccurate or misleading concerning the chances of winning 16 and the number of winners; 17 (d) enable authorized players to exclude themselves from contests and 18 take reasonable steps to prevent such players from entering a contest 19 from which they have excluded themselves; 20 (e) permit any authorized player to permanently close an account 21 registered to such player, on any and all platforms supported by such 22 operator or registrant, at any time and for any reason; 23 (f) offer introductory procedures for authorized players, that shall 24 be prominently displayed on the main page of such operator or regis- 25 trant's platform, that explain contest play and how to identify a highly 26 experienced player; 27 (g) identify all highly experienced players in any contest by a symbol 28 attached to such players' usernames, or by other easily visible means, 29 on all platforms supported by such operator or registrant; 30 (h) disclose the number of entries a single authorized player may 31 submit to each contest; 32 (i) disclose the maximum number of total entries allowed for each 33 contest; 34 (j) implement measures to protect the privacy and online security of 35 authorized players and their accounts; 36 (k) offer all authorized players access to his or her account history 37 and account details; 38 (l) ensure authorized players' funds are protected upon deposit and 39 segregated from the operating funds of such operator or registrant and 40 otherwise protected from corporate insolvency, financial risk, or crimi- 41 nal or civil actions against such operator or registrant; 42 (m) list on each website, in a prominent place, information concerning 43 assistance for compulsive play in New York state, including a toll-free 44 number directing callers to reputable resources containing further 45 information, which shall be free of charge; 46 (n) ensure the value of any prizes and awards offered to authorized 47 players shall be established and made known to such players in advance 48 of the contest, and such value shall not be determined by the number of 49 authorized players or the amount of any entry fees paid by such players; 50 (o) ensure all winning outcomes reflect the relative knowledge and 51 skill of the authorized players and shall be determined predominantly by 52 accumulated statistical results of the performance of individuals in 53 sports events; 54 (p) ensure no winning outcome shall be based on the score, point 55 spread, or performance of a single sports team, or any combination of 56 such teams;A. 10736 7 1 (q) ensure no winning outcome shall be based solely on any single 2 performance of an individual athlete in a single sport or athletic 3 event; and 4 (r) ensure no game or contest shall be based on a prohibited sports 5 event. 6 2. Each registrant shall restrict the number of entries submitted by a 7 single authorized player for any contest to a maximum of one hundred 8 fifty entries per player per contest, or a maximum of three percent of 9 the total number of entries by all players for any contest, whichever is 10 less, or as determined by the commission. Registrants shall take reason- 11 able steps to prevent authorized players from submitting more than the 12 allowable number of entries per contest. The commission shall promul- 13 gate regulations to further effectuate this subdivision to ensure that 14 the number of entries submitted by a single authorized player for any 15 contest will lead to a fair and equitable distribution of number of 16 entries. 17 3. (a) Operators shall not directly or indirectly operate, promote, or 18 advertise any platform or contest to persons located in New York state 19 unless registered pursuant to this article. 20 (b) Unless otherwise approved by regulation of the commission, opera- 21 tors and registrants shall not directly or indirectly promote or adver- 22 tise any online fantasy or simulation sports games or contests with an 23 entry fee during the conduct of any online fantasy or simulation sports 24 games or contests without an entry fee. This paragraph shall not apply 25 to any operator or registrant that prohibits prohibited players from 26 participating in online fantasy or simulation sports games or contests 27 without an entry fee. 28 4. Registrants shall not offer any contest based on any prohibited 29 sports event. 30 5. Registrants shall not permit any minor or prohibited participant to 31 enter any contest. 32 6. Advertisements for contests and prizes offered by a registrant 33 shall not target prohibited participants, minors, or self-excluded 34 persons. Representations or implications about average winnings from 35 contests shall not be unfair or misleading. Such representations shall 36 include, at a minimum: 37 (a) the median and mean net winnings of all authorized players partic- 38 ipating in contests offered by such registrant; and 39 (b) the percentage of winnings awarded by the registrant to highly 40 experienced players participating in contests offered by such registrant 41 within the preceding calendar year. 42 7. Registrants shall prohibit the use of third-party scripts or 43 scripting programs for any contest and ensure that measures are in place 44 to deter, detect and, to the extent reasonably possible, prevent cheat- 45 ing, including collusion, and the use of cheating devices, including use 46 of software programs that submit entry fees or adjust the athletes 47 selected by an authorized player. 48 8. Operators and registrants shall develop and prominently display 49 procedures on the main page of such operator's or registrant's platform 50 for the filing of a complaint by the authorized player against such 51 registrant. An initial response shall be given by such registrant to 52 such player filing the complaint within forty-eight hours. A complete 53 response shall be given by such registrant to such player filing the 54 complaint within ten business days. An authorized player may file a 55 complaint alleging a violation of the provisions of this article with 56 the commission.A. 10736 8 1 9. Registrants shall maintain records of all accounts belonging to 2 authorized players and retain such records for five years from the date 3 an account was created. 4 § 1405. Powers and duties of the commission. 1. The commission shall 5 promulgate regulations to implement the provisions of and effectuate the 6 policy and objectives of this article as the commission may deem neces- 7 sary or advisable, including the development of the initial form of the 8 application for registration. Such regulations shall provide for the 9 registration and operation of contests in New York state and shall 10 include, without limitation, responsible protections with regard to 11 compulsive play and safeguards for fair play. Such regulations may regu- 12 late the conduct and operation of contests and platforms, protect 13 contestants and promote the fairness, honesty and integrity of contests. 14 2. The commission shall have the following powers and duties for 15 purposes of administering, regulating, and enforcing the provisions of 16 this article: 17 (a) all powers and duties assigned by this article, as well as all 18 powers necessary and proper to fully and effectively execute this arti- 19 cle; 20 (b) to approve and deny applications for registration to conduct 21 contests in New York state, and to suspend, refuse or renew, or revoke 22 any registration issued to a registrant under this article; 23 (c) to review and approve each platform and each contest offered by an 24 operator or registrant; 25 (d) to accept and investigate complaints of any kind from an author- 26 ized player and attempt to mediate such complaints where appropriate; 27 (e) to investigate alleged violations of this article; 28 (f) to initiate proper enforcement proceedings where such action is 29 deemed by the commission to be necessary or appropriate; and 30 (g) all powers and duties assigned by this chapter. 31 § 1406. Annual report. 1. Each registrant shall annually submit a 32 report to the commission no later than the thirtieth of June of each 33 year, which shall include the following information as it shall apply to 34 accounts held by authorized players located in New York state: 35 (a) the number of accounts held by authorized players on all platforms 36 offered by the registrant, and the number of accounts held by highly 37 experienced players on all platforms offered by the registrant; 38 (b) the total number of new accounts established in the preceding 39 year, as well as the total number of accounts permanently closed in the 40 preceding year; 41 (c) the total amount of entry fees received from authorized players; 42 (d) the total amount of prizes awarded to authorized players; 43 (e) the total amount of interactive fantasy sports revenue received by 44 the registrant; 45 (f) the total number of authorized players that requested to exclude 46 themselves from contests; 47 (g) any additional information that the commission deems necessary to 48 carry out the provisions of this article. 49 2. Upon the submission of such annual report, to such extent that the 50 commission deems it to be in the public interest, the commission shall 51 be authorized to conduct a financial audit of any registrant, at any 52 time, to ensure compliance with this article. 53 3. The commission shall annually publish a report based on the aggre- 54 gate information provided by all registrants pursuant to subdivision one 55 of this section, which shall be published on the commission's website noA. 10736 9 1 later than one hundred eighty days after the deadline for the submission 2 of individual reports as specified in subdivision one of this section. 3 § 1407. State tax. For the privilege of conducting interactive fanta- 4 sy sports contests in the state, registrants shall pay a tax equivalent 5 to fifteen percent of their interactive fantasy sports gross revenue 6 generated within the state; in addition, registrants shall pay a tax 7 equal to one-half of one percent, but not to exceed fifty thousand 8 dollars annually. 9 § 1408. Additional regulatory costs. The commission may assess annual- 10 ly, in arrears, on each registrant proportional to the interactive 11 fantasy sports gross revenue of such registrant in the preceding year 12 compared to the aggregate interactive fantasy sports gross revenue of 13 all registrants in the preceding year actual costs necessary to regulate 14 in accordance with the provisions of this article. Such assessments 15 shall be made only within amounts appropriated therefor. 16 § 1409. Disposition of taxes. 1. The commission shall pay into the 17 state lottery fund all taxes imposed by this article; any interest and 18 penalties imposed by the commission relating to those taxes; all penal- 19 ties levied and collected by the commission; and the appropriate funds, 20 cash or prizes forfeited from interactive fantasy sports. 21 2. The commission shall require at least monthly deposits by the 22 interactive fantasy sports operator of any payments pursuant to section 23 fourteen hundred seven of this article, at such times, under such condi- 24 tions, and in such depositories as shall be prescribed by the state 25 comptroller. The deposits shall be deposited to the credit of the state 26 lottery fund. The commission shall require a monthly report and recon- 27 ciliation statement to be filed with it on or before the tenth day of 28 each month, with respect to gross revenues and deposits received and 29 made, respectively, during the preceding month. 30 § 1410. Determination of tax liability. The commission may perform 31 audits of the books and records of an interactive fantasy sports opera- 32 tor with a permit or registrant, at such times and intervals as it deems 33 appropriate, for the purpose of determining the sufficiency of tax 34 payments. If a return required with regard to obligations imposed is not 35 filed, or if a return when filed or is determined by the commission to 36 be incorrect or insufficient with or without an audit, the amount of tax 37 due shall be determined by the commission. Notice of such determination 38 shall be given to the interactive fantasy sports operator liable for the 39 payment of the tax. Such determination shall finally and irrevocably fix 40 the tax unless the person against whom it is assessed, within thirty 41 days after receiving notice of such determination, shall apply to the 42 commission for a hearing in accordance with the regulations of the 43 commission. 44 § 1411. Contests authorized. Interactive fantasy sports contests 45 registered and conducted pursuant to the provisions of this chapter are 46 hereby authorized. 47 § 1412. Contests prohibited. The conduct of unregistered interactive 48 fantasy sports contests is prohibited. 49 § 2. Section 104 of the racing, pari-mutuel wagering and breeding law 50 is amended by adding a new subdivision 23 to read as follows: 51 23. To register and regulate interactive fantasy sports in New York 52 state. 53 § 3. This act shall take effect immediately.