Bill Text: NY A10473 | 2015-2016 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relates to the registration and regulation of interactive fantasy sports contests; requires all operators to register in New York state.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2016-06-13 - print number 10473a [A10473 Detail]
Download: New_York-2015-A10473-Introduced.html
Bill Title: Relates to the registration and regulation of interactive fantasy sports contests; requires all operators to register in New York state.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2016-06-13 - print number 10473a [A10473 Detail]
Download: New_York-2015-A10473-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 10473 IN ASSEMBLY May 27, 2016 ___________ Introduced by M. of A. PRETLOW, DINOWITZ -- Multi-Sponsored by -- M. of A. COOK, GJONAJ, MURRAY, ORTIZ -- 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 1401. Definitions. 6 1402. Registration. 7 1403. Scope of registration review. 8 1404. Required safeguards, minimum standards. 9 1405. Powers and duties of the commission. 10 1406. Annual report. 11 1407. State tax. 12 § 1401. Definitions. As used in this article, the following terms shall 13 have the following meanings: 14 1. "Authorized player" shall mean an individual located in New York 15 state that participates in an interactive fantasy sports contest offered 16 by a registrant. 17 2. "Collegiate sport or athletic event" shall mean a sport or athletic 18 event offered or sponsored by or played in connection with a public or 19 private institution that offers education services beyond the secondary 20 level. 21 3. "Commission" shall mean the New York state gaming commission. 22 4. "Entry fee" shall mean cash or cash equivalent that is paid by an 23 authorized player to an operator or registrant to participate in an 24 interactive fantasy sports contest offered by such operator or regis- 25 trant. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15598-02-6A. 10473 2 1 5. "High school sport or athletic event" shall mean a sport or athlet- 2 ic event offered or sponsored by or played in connection with a public 3 or private institution that offers education services at the secondary 4 level. 5 6. "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 or more 10 from a single operator or registrant; and 11 (c) once an authorized player is classified as a highly experienced 12 player, such player shall remain classified as such. 13 7. "Horse racing event" shall mean any sport or athletic event 14 conducted in New York state subject to the provisions of this chapter, 15 or any sport or athletic event conducted outside of New York state, 16 which if conducted in New York state would be subject to the provisions 17 of this chapter. 18 8. "Interactive fantasy sports contest" or "contest" shall mean any 19 online fantasy or simulation sports game or contest offered by an opera- 20 tor or registrant in which an authorized player manages a fantasy or 21 simulation sports team composed of athletes from an amateur or profes- 22 sional sports organization and which meets the following conditions: 23 (a) the value of any prizes and awards offered to authorized players 24 shall be established and made known to such players in advance of the 25 contest, and such value shall not be determined by the number of author- 26 ized players or the amount of any entry fees paid by such players; 27 (b) no winning outcome shall be based on the score, point spread, or 28 performance of a single sports team, or any combination of such teams; 29 (c) no winning outcome shall be based solely on any single performance 30 of an individual athlete in a single sport or athletic event; and 31 (d) no game or contest shall be based on a prohibited sports event. 32 9. "Interactive fantasy sports gross revenue" shall mean the total of 33 all sums actually received by a registrant from interactive fantasy 34 sports operations in New York state, inclusive of any revenues received 35 as the result of any entry fees from authorized players located in New 36 York state and any sources of advertisement in connection with interac- 37 tive fantasy sports operations in New York state, less the total of all 38 sums paid out as winnings to authorized players located in New York 39 state; provided, however, that the total of all sums paid out as 40 winnings to authorized players shall not include the cash equivalent 41 value of any merchandise or thing of value awarded as a prize; provided 42 further, that the issuance to or participation by authorized players of 43 an interactive fantasy sports contest of any promotional gaming credit 44 shall not be taxable for the purposes of determining gross revenue. 45 10. "Interactive fantasy sports operator" or "operator" shall mean any 46 person or entity that offers any interactive fantasy sports contest to 47 any authorized player through any interactive fantasy sports platform. 48 11. "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. "Interactive fantasy sports registrant" or "registrant" shall mean 52 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.A. 10473 3 1 14. "Prohibited players" shall mean: 2 (a) any member, officer, employee or agent of an operator or regis- 3 trant; 4 (b) any spouse, child, brother, sister or parent residing as a member 5 of the same household in the principal place of abode of any member, 6 officer, employee or agent of an operator or registrant; 7 (c) any individual with access to non-public confidential information 8 about contests; 9 (d) any amateur or professional athlete whose performance may be used 10 to determine the outcome of a contest; 11 (e) any sports agent, team employee, referee, or league official asso- 12 ciated with any sport or athletic event on which contests are based; 13 (f) any individual located in a state where the conduct of contests is 14 not authorized or is prohibited; or 15 (g) any person under the age of eighteen years. 16 15. "Prohibited sports event" shall mean any collegiate sport or 17 athletic event, any high school sport or athletic event, or any horse 18 racing event. 19 16. "Sports event" shall mean any amateur or professional sport or 20 athletic event, except a prohibited sports event. 21 § 1402. Registration. 1. (a) No operator shall administer, manage, or 22 otherwise make available an interactive fantasy sports platform to 23 persons located in New York state unless registered with the commission 24 pursuant to this article. A registrant may utilize multiple interactive 25 fantasy sports platforms and offer multiple contests, provided that each 26 platform and each contest has been reviewed and approved by the commis- 27 sion. 28 (b) Any operator that was offering contests to persons located in New 29 York state prior to the tenth of November, two thousand fifteen, and 30 that files an application for registration with the commission within 31 ninety days of the promulgation of regulations to effectuate this arti- 32 cle, may continue to offer contests to persons located in New York state 33 until such application for registration has been approved or denied. 34 2. The commission shall deny any application for registration as 35 authorized by this section to conduct contests in New York state upon 36 the finding that the operator, or any partner, officer, director, or 37 shareholder: 38 (a) has knowingly made a false statement of material fact or has 39 deliberately failed to disclose any information required by the commis- 40 sion; 41 (b) has had a registration or license to offer or conduct contests 42 denied, suspended, or revoked in any other state or country for just 43 cause; 44 (c) has legally defaulted in the payment of any obligation or debt due 45 to any state or political subdivision; or 46 (d) has at any time knowingly failed to comply with any requirement 47 outlined in section fourteen hundred four of this article, any other 48 provision of this article, any regulations promulgated by the commission 49 to effectuate this article, or any additional requirements of the 50 commission. 51 3. Registration fees shall be used solely by the commission for the 52 administration and regulation of this article. The commission shall 53 require each approved registrant to pay an initial registration fee as 54 follows: 55 (a) if such approved registrant's interactive fantasy sports gross 56 revenue was greater than two hundred thousand dollars in the precedingA. 10473 4 1 fiscal year, such registrant shall pay an initial registration fee of 2 one hundred thousand dollars; 3 (b) if such approved registrant's interactive fantasy sports gross 4 revenue was greater than one hundred thousand dollars but not more than 5 two hundred thousand dollars in the preceding fiscal year, such regis- 6 trant shall pay an initial registration fee of twenty-five thousand 7 dollars; and 8 (c) if such approved registrant's interactive fantasy sports gross 9 revenue was one hundred thousand dollars or less in the preceding fiscal 10 year, such registrant shall pay an initial registration fee of five 11 thousand dollars. 12 4. Registrations issued by the commission shall remain in effect for 13 three years. The commission shall establish a process for renewal, and 14 each registrant shall pay a renewal fee as follows: 15 (a) if such approved registrant's interactive fantasy sports gross 16 revenue was greater than two hundred thousand dollars in the preceding 17 fiscal year, such registrant shall pay a renewal fee of one hundred 18 thousand dollars; 19 (b) if such approved registrant's interactive fantasy sports gross 20 revenue was greater than one hundred thousand dollars but not more than 21 two hundred thousand dollars in the preceding fiscal year, such regis- 22 trant shall pay a renewal fee of twenty-five thousand dollars; and 23 (c) if such approved registrant's interactive fantasy sports gross 24 revenue was one hundred thousand dollars or less in the preceding fiscal 25 year, such registrant shall pay a renewal fee of five thousand dollars. 26 5. The commission shall suspend, refuse to renew, or revoke any regis- 27 tration issued to a registrant under this article upon the finding that 28 such registrant, or any partner, officer, director, or shareholder: 29 (a) has knowingly made a false statement of material fact or has 30 deliberately failed to disclose any information required by the commis- 31 sion; 32 (b) has had a registration or license to offer or conduct contests 33 denied, suspended, or revoked in any other state or country for just 34 cause; 35 (c) has legally defaulted in the payment of any obligation or debt due 36 to any state or political subdivision; or 37 (d) has at any time knowingly failed to comply with any requirement 38 outlined in section fourteen hundred four of this article, any other 39 provision of this article, any regulations promulgated by the commission 40 to effectuate this article, or any additional requirements of the 41 commission. 42 6. The commission shall publish a list of all operators registered in 43 New York state pursuant to this section on the commission's website for 44 public use. 45 7. The commission shall promulgate regulations to implement the 46 provisions of this article including the development of the form neces- 47 sary for registration. Such regulations shall provide for the registra- 48 tion and operation of contests in New York state and shall include, but 49 not be limited to, responsible protections with regard to compulsive 50 play and safeguards for fair play. 51 § 1403. Scope of registration review. 1. The commission shall require 52 each operator seeking to offer contests in New York state to submit an 53 application for registration setting forth: 54 (a) the full name and principal address of the operator; 55 (b) if a corporation, the name of the state in which incorporated and 56 the full names and addresses of any partner, officer, director, share-A. 10473 5 1 holder holding ten percent or more equity, and ultimate equitable 2 owners; 3 (c) if a business entity other than a corporation, the full names and 4 addresses of the principals, partners, shareholders holding five percent 5 or more equity, and ultimate equitable owners; 6 (d) whether such corporation or entity files information and reports 7 with the United States Securities and Exchange Commission as required by 8 section thirteen of the Securities Exchange Act of 1934, 15 U.S.C. §§ 9 78a-78kk; or whether the securities of the corporation or entity are 10 regularly traded on an established securities market in the United 11 States; 12 (e) the type and estimated number of contests to be conducted annual- 13 ly; 14 (f) a statement of the assets and liabilities of the operator. 15 2. The commission may require the full names and addresses of the 16 officers and directors of any creditor of the operator, and of those 17 stockholders who hold more than ten percent of the stock of the credi- 18 tor. 19 3. For each individual listed in the application as an officer or 20 director, the commission shall submit to the division of criminal 21 justice services a set of fingerprints, and the division of criminal 22 justice services processing fee imposed pursuant to subdivision eight-a 23 of section eight hundred thirty-seven of the executive law and any fee 24 imposed by the federal bureau of investigation. Upon receipt of the 25 fingerprints, the division of criminal justice services shall promptly 26 forward a set of the individual's fingerprints to the federal bureau of 27 investigation for the purpose of a nationwide criminal history record 28 check to determine whether such individual has been convicted of a crim- 29 inal offense in any state other than New York or in a federal jurisdic- 30 tion. The division of criminal justice services shall promptly provide 31 the requested criminal history information to the commission. For the 32 purposes of this section, the term "criminal history information" shall 33 mean a record of all convictions of crimes and any pending criminal 34 charges maintained on an individual by the division of criminal justice 35 services and the federal bureau of investigation. All such criminal 36 history information sent to the commission pursuant to this subdivision 37 shall be confidential and shall not be published or in any way disclosed 38 to persons other than the commission, unless otherwise authorized by 39 law. 40 4. Upon receipt of criminal history information pursuant to subdivi- 41 sion three of this section and before making a determination on the 42 application, the commission shall provide the subject of the record with 43 a copy of such criminal history information and a copy of article twen- 44 ty-three-A of the correction law and inform such prospective applicant 45 seeking to be credentialed of his or her right to seek correction of any 46 incorrect information contained in such criminal history information 47 pursuant to the regulations and procedures established by the division 48 of criminal justice services. 49 5. All determinations to approve or deny an application pursuant to 50 this article shall be performed in a manner consistent with subdivision 51 sixteen of section two hundred ninety-six of the executive law and arti- 52 cle twenty-three-A of the correction law. When the commission denies an 53 application, the operator shall be afforded notice and the right to be 54 heard and offer proof in opposition to such determination in accordance 55 with the regulations of the commission.A. 10473 6 1 6. Each operator shall provide evidence of a surety bond in the amount 2 of one million dollars, payable to the state, furnished by a corporate 3 surety authorized to do business in the state in such a form as estab- 4 lished by commission rule. Such bond shall be kept in full force and 5 effect by the operator during the term of the registration, and any 6 renewal thereof. 7 § 1404. Required safeguards, minimum standards. 1. As a condition of 8 registration in New York state, each operator and registrant shall 9 implement the following measures: 10 (a) limit each authorized player to one active and continuously used 11 account, and prevent prohibited players from maintaining accounts or 12 participating in any contest offered by such operator or registrant; 13 (b) prohibit minors from participating in any contest, which includes: 14 (i) if a registrant becomes or is made aware that a minor has partic- 15 ipated in one of its contests, such registrant shall promptly, within no 16 more than two business days, refund any deposit received from the minor, 17 whether or not the minor has engaged in or attempted to engage in a 18 contest; provided, however, that any refund may be offset by any prizes 19 already awarded; 20 (ii) each registrant shall publish and facilitate parental control 21 procedures to allow parents or guardians to exclude minors from access 22 to any contest or platform. Such procedures shall include a toll-free 23 number to call for help in establishing such parental controls; and 24 (iii) each registrant shall take all appropriate steps to confirm that 25 an individual opening an account is not a minor. 26 (c) clearly and conspicuously depict accurate representations concern- 27 ing the chances of winning, and the number of winners, in all advertise- 28 ments and upon contest entry; 29 (d) enable authorized players to exclude themselves from contests and 30 take reasonable steps to prevent such players from entering a contest 31 from which they have excluded themselves; 32 (e) permit any authorized player to permanently close an account 33 registered to such player, on any and all platforms supported by such 34 operator or registrant, at any time and for any reason; 35 (f) offer introductory procedures for authorized players, that shall 36 be prominently displayed on the main page of such operator or regis- 37 trant's platform, that explain contest play and how to identify a highly 38 experienced player; 39 (g) identify all highly experienced players in any contest by a symbol 40 attached to such players' usernames, or by other easily visible means, 41 on all platforms supported by such operator or registrant; 42 (h) disclose the number of entries a single authorized player may 43 submit to each contest; 44 (i) disclose the maximum number of authorized players allowed for each 45 contest; 46 (j) implement measures to protect the privacy and online security of 47 authorized players and their accounts; 48 (k) offer all authorized players access to his or her account history 49 and account details; 50 (l) ensure authorized players' funds are protected upon deposit and 51 segregated from the operating funds of such operator or registrant and 52 otherwise protected from corporate insolvency, financial risk, or crimi- 53 nal or civil actions against such operator or registrant; 54 (m) list on each website, in a prominent place, information concerning 55 assistance for compulsive play in New York state, including a toll-freeA. 10473 7 1 number directing callers to reputable resources containing further 2 information, which shall be free of charge. 3 2. Each registrant shall restrict the number of entries submitted by a 4 single authorized player for any contest to a maximum of one hundred and 5 fifty entries per player per contest, or a maximum of one percent of the 6 total number of entries by all players for any contest, whichever is 7 less. Registrants shall take reasonable steps to prevent authorized 8 players from submitting more than the allowable number of entries per 9 contest. 10 3. Operators shall not directly or indirectly operate, promote, or 11 advertise any platform or contest to persons located in New York state 12 unless registered pursuant to this article. 13 4. Registrants shall not offer any contest based on any prohibited 14 sports event. 15 5. Registrants shall not offer or permit any contest to a minor or to 16 a prohibited participant. 17 6. Advertisements for contests and prizes offered by a registrant 18 shall not target prohibited participants, minors, or self-excluded 19 persons. Representations or implications about average winnings from 20 contests shall not be unfair or misleading. Such representations shall 21 include, at a minimum: 22 (a) the median and mean net winnings of all authorized players partic- 23 ipating in contests offered by such registrant; and 24 (b) the percentage of winnings awarded by the registrant to highly 25 experienced players participating in contests offered by such registrant 26 within the preceding calendar year. 27 7. Registrants shall prohibit the use of scripts or scripting programs 28 for any contest and ensure that measures are in place to deter, detect 29 and, to the extent reasonably possible, prevent cheating, including 30 collusion, and the use of cheating devices, including use of software 31 programs that submit entry fees or adjust the athletes selected by an 32 authorized player. 33 8. Registrants shall develop and prominently display procedures for 34 the filing of a complaint by the authorized player against such regis- 35 trant. An initial response shall be given by such registrant to such 36 player filing the complaint within forty-eight hours. A complete 37 response shall be given by such registrant to such player filing the 38 complaint within seven days. An authorized player may file a complaint 39 alleging a violation of the provisions of this article with the commis- 40 sion. 41 9. Registrants shall maintain records of all accounts belonging to 42 authorized players and retain such records for five years from the date 43 an account was created. 44 § 1405. Powers and duties of the commission. 1. The commission shall 45 promulgate regulations to implement the provisions of this article. Such 46 regulations shall provide for the registration and operation of contests 47 in New York state and shall include, but not be limited to, responsible 48 protections with regard to compulsive play and safeguards for fair play. 49 2. The commission shall have the following powers and duties for 50 purposes of administering, regulating, and enforcing the provisions of 51 this article: 52 (a) all powers and duties assigned by this article, as well as all 53 powers necessary and proper to fully and effectively execute this arti- 54 cle;A. 10473 8 1 (b) to approve and deny applications for registration to conduct 2 contests in New York state, and to suspend, refuse or renew, or revoke 3 any registration issued to a registrant under this article; 4 (c) to review and approve each platform and each contest offered by an 5 operator or registrant; 6 (d) to accept and investigate complaints of any kind from an author- 7 ized player and attempt to mediate such complaints where appropriate; 8 (e) to investigate alleged violations of this article; 9 (f) to initiate proper enforcement proceedings where such action is 10 deemed by the commission to be necessary or appropriate; and 11 (g) all powers and duties assigned by this chapter. 12 § 1406. Annual report. 1. Each registrant shall annually submit a 13 report to the commission no later than the thirtieth of September of 14 each year, which shall include the following information as it shall 15 apply to accounts held by authorized players located in New York state: 16 (a) the number of accounts held by authorized players on all platforms 17 offered by the registrant, and the number of accounts held by highly 18 experienced players on all platforms offered by the registrant; 19 (b) the total number of new accounts established in the preceding 20 year, as well as the total number of accounts permanently closed in the 21 preceding year; 22 (c) the total amount of entry fees received from authorized players; 23 (d) the total amount of prizes awarded to authorized players; 24 (e) the total amount of interactive fantasy sports revenue received by 25 the registrant; 26 (f) the total number of authorized players that requested to exclude 27 themselves from contests; 28 (g) any additional information that the commission deems necessary to 29 carry out the provisions of this article. 30 2. Upon the submission of such annual report, to such extent that the 31 commission deems it to be in the public interest, the commission shall 32 be authorized to conduct a financial audit of any registrant, at any 33 time, to ensure compliance with this article. 34 3. The commission shall annually publish a report based on the aggre- 35 gate information provided by all registrants pursuant to subdivision one 36 of this section, which shall be published on the commission's website no 37 later than one hundred eighty days after the deadline for the submission 38 of individual reports as specified in subdivision one of this section. 39 § 1407. State tax. For the privilege of conducting interactive fanta- 40 sy sports contests in the state, registrants shall pay a tax equivalent 41 to fifteen percent of their interactive fantasy sports gross revenue 42 generated within the state. 43 § 2. Section 104 of the racing, pari-mutuel wagering and breeding law 44 is amended by adding a new subdivision 23 to read as follows: 45 23. To register and regulate interactive fantasy sports in New York 46 state. 47 § 3. This act shall take effect immediately.
