Bill Text: NY S08471 | 2021-2022 | General Assembly | Introduced

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Bill Title: Amends the definition of sports wager to include other things of value; changes the licensing requirement for mobile sports wagering operators; provides the state shall by no later than January 31, 2023 have fourteen operators and by January 31, 2024 have sixteen operators; provides tax rates shall be determined based on the number of operators.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-04-25 - REPORTED AND COMMITTED TO FINANCE [S08471 Detail]

Download: New_York-2021-S08471-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          8471

                    IN SENATE

                                      March 4, 2022
                                       ___________

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

        AN  ACT  to  amend the racing, pari-mutuel wagering and breeding law, in
          relation to the definition of wager and the licensing of mobile sports
          wagering operators

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Paragraph  (w)  of  subdivision  1 of section 1367 of the
     2  racing, pari-mutuel wagering and breeding law, as amended by  section  3
     3  of  part  Y  of  chapter  59  of the laws of 2021, is amended to read as
     4  follows:
     5    (w) "Sports wager" means cash [or], cash equivalent or thing of  value
     6  that  is  paid  by  an  authorized sports bettor to a casino or a mobile
     7  sports wagering licensee to participate in sports  wagering  offered  by
     8  such casino or mobile sports wagering licensee;
     9    §  2.  Paragraph  (y)  of subdivision 1 of section 1367 of the racing,
    10  pari-mutuel wagering and breeding law, as amended by section 3 of part Y
    11  of chapter 59 of the laws of 2021, is amended to read as follows:
    12    (y) "Sports wagering gross revenue" means: [(i)] the amount  equal  to
    13  the  total  of  all  sports wagers not attributable to prohibited sports
    14  events that a casino or mobile sports wagering  licensee  collects  from
    15  all  sports  bettors,  excluding wagers placed with promotional wagering
    16  credits or other things of value, less the total of all sums not attrib-
    17  utable to prohibited sports events paid out as winnings  to  all  sports
    18  bettors,  however,  that  the  total of all sums paid out as winnings to
    19  sports bettors shall not  include  the  cash  equivalent  value  of  any
    20  merchandise  or  thing  of value awarded as a prize, and less all excise
    21  taxes on sports wagers not attributable to prohibited sports events paid
    22  pursuant to federal law;
    23    § 3. Subdivision 7 of section 1367 of the racing, pari-mutuel wagering
    24  and breeding law, as added by section 3 of part Y of chapter 59  of  the
    25  laws of 2021, is amended to read as follows:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14112-03-2
        S. 8471                             2

     1    7. For the privilege of conducting sports wagering in the state, casi-
     2  nos  shall  pay a tax equivalent to ten percent of their sports wagering
     3  gross gaming revenue, excluding sports  wagering  gross  gaming  revenue
     4  attributed  to  mobile sports wagering offered pursuant to section thir-
     5  teen hundred sixty-seven-a of this title. Platform providers shall pay a
     6  tax  constituting  a  certain  percentage  of  the sports wagering gross
     7  gaming revenue attributed to mobile sports wagering offered through such
     8  platform  provider's  platform  pursuant  to  section  thirteen  hundred
     9  sixty-seven-a  of  this  title;  provided  however, that such percentage
    10  shall be determined [pursuant to a competitive bidding process conducted
    11  by the commission] as outlined in subdivision seven of section  thirteen
    12  hundred  sixty-seven-a  of  this  title; and provided further, that such
    13  percentage shall be no lower  than  twelve  percent.  [When  awarding  a
    14  license  pursuant  to  section  thirteen  hundred  sixty-seven-a of this
    15  title, the commission may set graduated  tax  rates;  provided  however,
    16  that  any  such  tax rates may not be lower than the minimum rate estab-
    17  lished in this subdivision.] This tax shall be  in  lieu  of  all  other
    18  state  and  local  taxes  and  fees  imposed on the operation of, or the
    19  proceeds from, the operation of sports wagering, except as  provided  in
    20  this section and section thirteen hundred sixty-seven-a of this title.
    21    § 4. Subdivision 8 of section 1367 of the racing, pari-mutuel wagering
    22  and  breeding  law, as added by section 3 of part Y of chapter 59 of the
    23  laws of 2021, is amended to read as follows:
    24    8. Notwithstanding section thirteen hundred fifty-one of this article,
    25  mobile sports wagering gross gaming revenue and  tax  revenue  shall  be
    26  excluded  from  sports  wagering  gross  gaming revenue and tax revenue.
    27  Mobile sports wagering tax revenue shall be  separately  maintained  and
    28  returned to the state for deposit into the state lottery fund for educa-
    29  tion  aid except as otherwise provided in this subdivision. Any interest
    30  and penalties imposed by the commission relating  to  those  taxes,  all
    31  penalties  levied  and  collected by the commission, and the appropriate
    32  funds, cash or prizes forfeited from sports wagering shall be  deposited
    33  into  the  state lottery fund for education. In the first fiscal year in
    34  which mobile sports wagering licensees commence  operations  and  accept
    35  mobile  sports wagers pursuant to this section, the commission shall pay
    36  into the commercial gaming fund one percent of the state tax imposed  on
    37  mobile  sports  wagering  by  this section to be distributed for problem
    38  gambling education and treatment purposes pursuant  to  paragraph  a  of
    39  subdivision  four of section ninety-seven-nnnn of the state finance law;
    40  provided however, that such amount shall be equal to six million dollars
    41  for each fiscal year thereafter. In  the  first  fiscal  year  in  which
    42  mobile  sports  wagering licensees commence operations and accept mobile
    43  sports wagers pursuant to this section, the  commission  shall  pay  one
    44  percent  of  the  state  tax  imposed  on mobile sports wagering by this
    45  section to the general fund, a program to be administered by the  office
    46  of  children and family services for a statewide youth sports activities
    47  and education grant program for the purpose of providing  annual  awards
    48  to  sports  programs  for  underserved  youth  under the age of eighteen
    49  years; provided however, that such amount shall be equal to five million
    50  dollars for each fiscal year thereafter. The commission shall require at
    51  least monthly deposits by a platform provider of any  payments  pursuant
    52  to  subdivision  seven of this section, at such times, under such condi-
    53  tions, and in such depositories as shall  be  prescribed  by  the  state
    54  comptroller.  In a month when the amount of sports wagering gross reven-
    55  ue  for a platform provider is a negative number, such platform provider
    56  may carry over the negative amount to the return filed  for  the  subse-
        S. 8471                             3

     1  quent  month.   However, no amount shall be carried over for a period of
     2  more than twelve months after the month in which the amount carried over
     3  was originally due. The deposits shall be deposited to the credit of the
     4  state  commercial  gaming  revenue  fund. The commission shall require a
     5  monthly report and reconciliation statement to be filed with  it  on  or
     6  before  the  tenth day of each month, with respect to gross revenues and
     7  deposits received and made, respectively, during the preceding month.
     8    § 5. Subdivision 7 of section 1367-a of the racing, pari-mutuel wager-
     9  ing and breeding law, as added by section 4 of part Y of chapter  59  of
    10  the  laws of 2021, is amended and two new subdivisions 8 and 9 are added
    11  to read as follows:
    12    7. A platform provider may be licensed by the  commission  only  after
    13  having been selected for potential licensure by the commission following
    14  a  competitive  bidding  process  in  which the commission shall issue a
    15  request for applications no later than July first, two thousand  twenty-
    16  one;  provided however, that the deadline for submission of applications
    17  shall be no later than thirty days after the date upon which the commis-
    18  sion issues such request for applications.
    19    (a) The commission shall select  platform  providers  based  upon  the
    20  criteria set forth in this section no later than one hundred fifty days,
    21  to  the extent practicable, after the final application is received. The
    22  commission may disqualify applicants from licensure consideration if the
    23  applicant or the mobile sports wagering operator or  operators  included
    24  in their bid have not satisfied provision of required application infor-
    25  mation,  fail  to  meet any platform provider and mobile sports wagering
    26  operator eligibility criteria established pursuant to  the  request  for
    27  applications,  or are deemed by the commission to have not satisfied the
    28  criteria pursuant to subdivision five of this section.
    29    (a-1) The commission shall publish on its website  the  criteria  that
    30  will  be used to score applications based upon the criteria set forth in
    31  paragraph (c) of this subdivision; provided however, that  such  scoring
    32  methodology  shall  award  additional  points  to  an applicant that has
    33  entered into an agreement that includes revenue sharing related to  such
    34  mobile  sports  wagering  with  compacted  Native  American  tribe(s) or
    35  nation(s).
    36    (b) The  commission  shall  determine  the  form  of  application  for
    37  bidders, which shall require, at a minimum, the following information:
    38    (i)  Different  scenarios  for  the  number  of platform providers and
    39  number of mobile sports wagering operators licensed by  the  commission.
    40  For  each scenario, this shall include estimates of mobile sports wager-
    41  ing gross gaming revenue and the bases for such estimates[, the percent-
    42  age of gross revenue from mobile sports wagering the applicant will  pay
    43  to the state for the privilege of licensure if chosen], and the percent-
    44  age  of overall mobile sports wagering gross gaming revenue estimated to
    45  be generated;
    46    (ii) The number of mobile sports wagering operators the applicant will
    47  host on its  mobile  sports  wagering  platform,  if  the  applicant  is
    48  licensed as a platform provider;
    49    (iii) A description of how the applicant will use technology to ensure
    50  all  bettors  are physically within approved locations within the state,
    51  that any wager is accepted through equipment  physically  located  at  a
    52  licensed  gaming  facility  and that necessary safeguards against abuses
    53  and addictions are in place;
    54    (iv)  The  applicant  and  any  associated  operators  such  applicant
    55  proposes in its application possess the qualifications, capabilities and
    56  experience to provide a mobile sports wagering platform;
        S. 8471                             4

     1    (v)  A list of all jurisdictions where the applicant and parent compa-
     2  ny, and mobile sports wagering operator or operators and parent  company
     3  or  companies  have been licensed or otherwise authorized by contract or
     4  otherwise to conduct sports wagering operations. This shall include  the
     5  applicant  and its mobile sports wagering operator or operators' experi-
     6  ence in such other markets;
     7    (vi) Player acquisition model, advertising and affiliate programs  and
     8  marketing  budget, including details on how the applicant and its mobile
     9  sports wagering operator or operators will convert customers from wager-
    10  ing through illegal channels to wagering legally in the state;
    11    (vii) Timeframe to implement mobile  sports  wagering  from  award  of
    12  license;
    13    (viii) The applicant and mobile sports wagering operator or operators'
    14  capacity  to  bring  authorized  sports bettors into their mobile sports
    15  wagering platform; and
    16    (ix) Integrity monitoring and reporting including any  current  affil-
    17  iations related to integrity monitoring.
    18    (c)  In determining whether an applicant shall be eligible for a plat-
    19  form provider license, the commission shall evaluate how each  applicant
    20  proposes  to  maximize  sustainable,  long-term revenue for the state by
    21  evaluating the following factors:
    22    (i) A market analysis detailing the benefits of the applicant's bid as
    23  it relates to maximizing revenue to the state;
    24    (ii) Estimates of mobile sports wagering gross gaming  revenue  gener-
    25  ated by the applicant under different scenarios;
    26    (iii) The percentage of mobile sports wagering gross gaming revenue to
    27  be paid to the state under different scenarios pursuant to paragraph (d)
    28  of this subdivision;
    29    (iv) The potential market share of the mobile sports wagering operator
    30  or operators under different scenarios;
    31    (v)  Advertising  and  promotional plans of the mobile sports wagering
    32  operator or operators;
    33    (vi) Past experience and expertise in the market of the applicant  and
    34  any  mobile sports wagering operator or operators which are part of such
    35  applicant's application;
    36    (vii) The  applicant's  capacity  to  rapidly  and  effectively  bring
    37  authorized sports bettors into its platform;
    38    (viii) A demonstration of how and to what degree the applicant fosters
    39  racial, ethnic, and gender diversity in its workforce;
    40    (ix)  Timeframe  to  implement  mobile  sports  wagering from award of
    41  license;
    42    (x) Any other factors that could impact the integrity,  sustainability
    43  or safety of the mobile sports wagering system; and
    44    (xi) Any other factors that could impact revenue to the state.
    45    (d)  The  commission  shall  award  a license to [each of the two] the
    46  highest scoring platform providers that  submit  applications;  provided
    47  however,  that  such  awards  shall require that [both] winning platform
    48  providers pay the same tax rate; and provided further, that the  commis-
    49  sion  shall  require  that  no  less  than [four] fourteen mobile sports
    50  wagering operators will be operating in the  state  by  January  thirty-
    51  first,  two  thousand  twenty-three and sixteen by January thirty-first,
    52  two thousand twenty-four. In the event  that  the  commission  fails  to
    53  approve  the  required  number of operators by these deadlines, it shall
    54  not interfere with the ability of previously licensed platforms or oper-
    55  ators from continuing to operate in the state. The commission may  award
    56  additional  licenses if it determines that such additional awards are in
        S. 8471                             5

     1  the best interests of the state[; provided however, that any  additional
     2  platform  providers awarded licenses must also agree to pay the same tax
     3  rate as those platform providers that were initially awarded licenses by
     4  the commission]. The award of any such license shall require each appli-
     5  cant  to  remit  the  [highest]  percentage of gross gaming revenue from
     6  mobile sports wagering [contained in an applicant's bid selected by  the
     7  commission  considered  for  licensure.  A  qualified applicant shall be
     8  afforded the ability to revise its bid in any such manner in  order  for
     9  such  bid  to  meet  the  percentage of gross gaming revenue from mobile
    10  sports wagering  as  required  by  the  commission  for  license  award,
    11  provided  that the bid does not incorporate any additional operators not
    12  already included in the bid; and provided however that it is not  deter-
    13  mined  by  the  commission  that  the  revised  bid  no longer meets all
    14  requirements and criteria established pursuant to this section  and  the
    15  request  for applications. Any applicant that does not revise its bid to
    16  meet the percentage of gross gaming revenue from mobile sports  wagering
    17  required  by  the  commission  for  license award shall not be awarded a
    18  license.] based on the number of licensed mobile sports wagering  opera-
    19  tors as listed below:
    20    4-5 operators.......................sixty-four percent (64%)
    21    6 operators..........................sixty-two percent (62%)
    22    7 operators.......................sixty percent (60%)
    23    8 operators.......................fifty-eight percent (58%)
    24    9 operators..........................fifty-one percent (51%)
    25    10-12 operators.........................fifty percent (50%)
    26    13-14 operators........................thirty-five percent (35%)
    27    15 or more operators...................twenty-five percent (25%)
    28    8. Pursuant to subdivision seven of this section, the commission shall
    29  award  no fewer than fourteen mobile sports wagering licenses by January
    30  thirty-first, two thousand twenty-three and no  fewer  than  sixteen  by
    31  January thirty-first, two thousand twenty-four.
    32    (a)  The commission shall accept applications for mobile sports wager-
    33  ing licenses issued pursuant to this subdivision at the earlier of thir-
    34  ty days after all mobile sports wagering  licensees  awarded  a  license
    35  pursuant  to  subdivision  seven  of this section commence operations or
    36  September first, two thousand twenty-two.
    37    (b) Applicants that participated in the request  for  proposal  issued
    38  pursuant  to  subdivision seven of this section and not awarded a mobile
    39  sports wagering license shall automatically be eligible to  reapply  for
    40  consideration  pursuant  to  this subdivision. The commission shall only
    41  accept such applications electronically and will give  priority  to  the
    42  review and scoring of reapplying applicants.
    43    (i)  Nothing  herein  shall  prohibit a platform provider that did not
    44  previously respond to the request for  application  from  applying.  New
    45  applicants shall submit applications demonstrating the criteria outlined
    46  in paragraphs (a-1), (b), and (c) of subdivision seven of this section.
    47    (ii)  Any  applicant  for a mobile sports wagering license pursuant to
    48  this subdivision shall satisfy  any  requirements  in  the  request  for
    49  application concerning possessing qualifications, capabilities and expe-
    50  rience to provide a mobile sports wagering platform, pursuant to subpar-
    51  agraphs (iv) and (v) of paragraph (b) and subparagraph (vi) of paragraph
    52  (c)  of  subdivision  seven  of  this  section,  if  there  is an entity
    53  comprised of no more than six individuals  qualified  as  members  of  a
    54  minority  group as defined by subdivision eight of section three hundred
    55  ten of the executive law with a direct or indirect economic interest  of
    56  at least five percent in the applicant. The commission shall advance for
        S. 8471                             6

     1  licensure at least two applicants having such qualified minority invest-
     2  ment.
     3    (c)  The  commission  shall  make determinations to award a license or
     4  disqualify the applicant on a rolling  basis  to  expedite  issuance  of
     5  additional licenses and maximize revenue to the state.
     6    (d)  As  a  condition  of  licensure pursuant to this subdivision, the
     7  commission shall require  that  each  platform  provider  authorized  to
     8  conduct mobile sports wagering pay a one-time fee of twenty-five million
     9  dollars  and  each operator authorized to conduct mobile sports wagering
    10  on a platform licensed pursuant to subdivision  seven  of  this  section
    11  shall  pay a fee of fifty million dollars. Such fee shall be paid within
    12  thirty days of commission approval prior to license issuance and  depos-
    13  ited into the state lottery fund for education aid.
    14    9.  (a) An authorized sports bettor may make use of promotional wager-
    15  ing credits for purposes of placing a sports wager. Promotional wagering
    16  credit may include, but is not limited to, free plays,  deposit  matches
    17  and  any  other  bonus  that a mobile sports wagering operator offers or
    18  gives to a patron as an incentive.
    19    (b) A mobile sports wagering operator may exclude sports  wagers  that
    20  were  placed  using promotional wagering credit from its sports wagering
    21  gross revenue.
    22    § 6. This act shall take effect immediately.