Provides for regulation of sports betting and mobile sports wagering; defines terms; implements a tax equivalent to eight and one-half percent of sports wagering gross revenue; requires reporting; provides for civil penalties for violations; makes related provisions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1257
SPONSOR: Pretlow (MS) TITLE OF BILL:
An act to amend the racing, pari-mutuel wagering and breeding law, in
relation to regulation of sports betting
PURPOSE:
To update the existing provisions of law which allow the four upstate
casino gaming resorts to conduct sports betting in the event of a change
in the federal law which currently prohibits it.
SUMMARY OF PROVISIONS:
Section 1: Amends section 1367 of the Racing, Pari-Mutuel Wagering and
Breeding Law as follows:
*Expands and clarifies definitions;
*Prohibits sports betting on high school athletic events;
*Provides a listing of the individuals who are prohibited from partic-
ipating in sports betting;
*Clarifies that mobile sports wagers are made and take place upon
acceptance at the location of the server, regardless of the physical
location of the individual placing a wager;
*Clarifies the ability of casinos to place layoff bets and the authority
of the Gaming Commission to regulate how they are placed;
*Requires registration and reporting of mobile sports wagering licen-
sees.
*Requires license fee of $12 million for each agent authorized to
conduct mobile sports wagering.
*Requires the casinos to pay a royalty fee of .n of handle to the state
for sports governing bodies;
*Requires the casinos to pay a state tax of 8.5%, of gross sports wager-
ing revenue, not including mobile sports wagering revenue, which will be
subject to a 12% tax on gross revenue from mobile sports wagers;
*Clarifies that interactive fantasy sports are not included in the
provisions regulating sports betting conducted by casinos;
*Provides the ability for sports governing bodies to petition the Gaming
Commission to restrict certain wagers on sports events;
*Requires sports body governing authorities to have procedures with
respect to the protection of players;
*Requires the Gaming Commission to promulgate rules mandating that oper-
ators implement responsible gaming programs, including programs to
address potential problem gambling for individuals under the age of
Thirty;
*Establishes a third party integrity monitoring provider to assist in
investigations of unusual betting activity and suspicious betting activ-
ity;
*Provides a structure for investigations and data sharing between the
casinos, Gaming Commission, third party integrity monitor, and sports
governing bodies, and creates provisions to protect the private or
personally identifiable information shared in the course of such inves-
tigations, also preventing the use of such data for commercial purposes;
*provides authority for Gaming Commission to enter into agreements with
other states to share information for integrity monitoring purposes;
*Provides Gaming Commission to implement grievance procedure regulations
for sports bettors who allege a casino has not properly paid their bet;
*Provides the ability for sports governing bodies to require the use of
official league data for certain wagers on sports events; and
*provides for a civil penalty for violations of this section.
Section 2: Amends the Racing, Pari-Mutuel Wagering and Breeding Law by
adding a new section 1367-a which authorizes and regulates mobile sports
wagering as follows: * Allows casinos to have up to two mobile sports
wagering platforms and brands, and to contract with up to two independ-
ent operators to provide such platforms.
*Requires a casino offering a mobile sports betting platform to register
with the Gaming Commission;
*Requires any outside vendor offering a mobile sports betting platform
for a casino to be licensed as a casino vendor enterprise;
*Requires any sports bettor to be located in the State of New York when
placing a sports wager;
*Requires mobile sports betting platform operators to conform to a
series of safeguards similar to those required of interactive fantasy
sports operators;
* Authorizes sports bettors to sign up for their mobile sports betting
account in person at a casino or online;
*Requires that the Gaming Commission promulgate regulations with respect
to compulsive play safeguards for fair play;
*Requires certain minimum information to be included in an initial form
of application for registration;
*Requires the server used by a mobile sports wagering operator to be
located in the casino;
*Clarifies that mobile sports wagers are made and take place upon
acceptance at the location of the server, regardless of the physical
location of the individual placing a wager;
* Allows Native American Nations to voluntarily opt-in to participate in
mobile sports wagering, with such opt-in subject to a limited waiver of
sovereign immunity solely with respect to mobile sports wagering. Such
mobile sports wagering revenues will be subject to New York State taxa-
tion at the same rate as the State's licensed casinos. Native American
Nations can still conduct sports wagering for individuals physically
present at a Native American casino, if such Native American Nation does
not opt-in to a mobile sports wagering platform;
* Allows affiliates to enter into agreements with casinos to host mobile
sports wagering kiosks at their affiliate facilities.
Section 3: Clarifies the authority of the Gaming Commission to regulate
sports wagering.
Section 4: Severability clause. Section 5: Effective date.
JUSTIFICATION:
As part of the 2013 Upstate New York Gaming Economic Development Act,
the four upstate casino gaming resorts were granted the ability to
conduct sports betting should there be a change in federal law prohibit-
ing sports betting outside of certain states. On May 14, 2018 the United
States Supreme Court ruled the Professional and Amateur Sports
Protection act unconstitutional in Murphy v. National Collegiate Athlet-
ic Association which resulted in the federal prohibition being over-
turned. In preparation for such a situation, the Senate Committee on
Racing, Gaming and Wagering held a hearing in January on the topic of
sports betting which has led to the introduction of this legislation to
address a number of outstanding issues that are not addressed by the
current statute.
LEGISLATIVE HISTORY:
2019-2020 A6113C referred to Racing and Wagering
2018-2019 - A11144A was referred to Racing and Wagering
FISCAL IMPLICATIONS:
Around $79 million annually in betting revenues to New York State for
education based upon conservative market estimates. New York State could
receive a one-time increase in State revenue of $84 million in licensing
fees from operators.
EFFECTIVE DATE:
This act shall take effect immediately.
