Add Art 15 §§1500 - 1506, RWB L; amd §225.00, add §225.36, Pen L
Allows certain interactive poker games be considered games of skill rather than games of luck; includes definitions, authorization, required safeguards and minimum standards, the scope of licensing review and state tax implications; makes corresponding penal law amendments.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5250
SPONSOR: Pretlow TITLE OF BILL:
An act to amend the racing, pari-mutuel wagering and breeding law and
the penal law, in relation to allowing certain interactive poker games
PURPOSE:
To authorize the New York State Gaming Commission to license certain
entities to offer for play to the public certain variants of internet
poker which require a significant degree of skill, specifically "Omaha
Hold'em" and "Texas Hold'em."
SUMMARY OF PROVISIONS:
Section 1: Amends the Racing, Pari-Mutuel Wagering and Breeding Law to
create a new Article 15 which authorizes the New York State Gaming
Commission to license certain entities to offer online poker as provided
below:
Section 1500. Legislative findings and purpose. Provides for legislative
findings.
Section 1501. Definitions. Provides definitions.
Section 1502. Authorization. Authorizes the New York State Gaming
Commission promulgate regulations in order to implement interactive
gaming and to offer up to 11 licenses to operate interactive gaming.
Licensees shall be required to be licensed by the state to offer either
video lottery gaming pursuant to Section 1617-a of the Tax Law or oper-
ate a Class III gaming facility pursuant to Article 13 of the Pari-Mutu-
el Wagering and Breeding Law. Each license fee shall be in the amount of
$10,000,000 and the license shall be in effect for 10 years. This
license fee shall be applied as an offset against the taxes paid over
the first sixty months of operation.
Section 1503. Required Safeguards/minimum standards. Provides that the
New York State Gaming Commission shall require licensees to implement
certain standards to protect the public against underage gaming, fraud
and compulsive gambling.
Section 1504. Scope of licensing review. Provides that the New York
State Gaming Commission shall thoroughly review the background of any
applicant seeking a license to provide interactive gaming to the public.
Section 1505. State tax. This section provides that internet poker
licensees shall pay a tax of 15% of their interactive gaming gross
revenue to the state.
Section 1506. Disposition of taxes. This section provides that all tax
revenue received by the state shall be paid into the state lottery fund
for education.
Section 2: Amends Penal Law section 225.00(1) as to the definition of a
contest of chance.
Section 3: Amends the Penal Law by adding a new section 225.36 known as
the Interactive gaming offenses and exceptions.
Section 4: Effective date.
EXISTING LAW:
Under New York penal law a person engages in gambling when he or she
stakes or risks something of value upon the outcome of a contest of
chance or a future contingent event not under his or her control or
influence, upon an agreement or understanding that he or she will
receive something of value in the event of a certain outcome. Games of
skill are not considered games of chance under the current penal law
definitions.
JUSTIFICATION:
Presently, numerous New York residents are participating in illegal,
unregulated and unsafe gaming operations which offer games of chance
over the Internet. This bill will allow the state to license operators
that meet the high standards set by the state and offer limited games of
poker which require a high level of skill. This bill will require such
operators to take steps to protect consumers, combat compulsive gaming,
and prevent minors from accessing online gaming sites. In addition, this
legislation would create additional revenue for the State of New York by
clearly defining certain variants of poker, "Omaha Hold'em" and Texas
"Hold'em," as games of skill and thus allowing licensed interactive
gaming operators to offer these games to the public. Thus, not only this
will help New York regulate an industry that is present operating with-
out oversight in New York State, but also generate additional revenue
from taxes and licenses fees associated with a licensed online poker
system in New York State.
LEGISLATIVE HISTORY:
A.9049B 15-16: Referred to Racing & Wagering
A.9591A 14-15: Referred to Racing & Wagering
FISCAL IMPLICATIONS:
Increased tax revenue to the state through taxing interactive gaming as
well as up to $110,000,000 generated from the licensing of up to 11
interactive gaming operators.
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.
