BILL NUMBER: S940A

SPONSOR: FUNKE
 
TITLE OF BILL:  An act to amend the general municipal law, in relation
to allowing alcoholic beverages as prizes in any game of chance

 
PURPOSE:

The purpose of this bill is to allow bona fide charitable organizations
participating in games of chance such as raffles, etc., to offer alco-
holic beverages as a prize.

 
SUMMARY OF SPECIFIC PROVISIONS:

Sections 1: Strikes the last line of section 195-d of the general munic-
ipal law that states "No alcoholic beverage shall be offered or given as
a prize in any game of chance".

Section 2: Creates restrictions for raffles that award prizes containing
alcohol.

              

Section 3: Sets the effective date immediately.

 
JUSTIFICATION:

This legislation looks to cut unnecessary, over burdensome and outdated
bureaucracy around prizes offered for charitable gaming, while promoting
charitable donations and helping nonprofits with their fundraising
activities.

Currently, New York State Law prohibits charitable organizations partic-
ipating in a game of chance to raffle off prizes that contain alcohol.
Though State Law outlaws this action, most charitable gaming organiza-
tions do not know this is illegal and partake in the activity as a form
of common practice. It is common for a local winery, brewery, or bever-
age distributor to donate a basket of their products to a charitable
organization to help raise money for the cause the charitable organiza-
tion supports.

The prohibition on alcohol as a prize came about in 1976, when the laws
around charitable gaming first came into existence due to a constitu-
tional amendment that the voters approved in the 1975 general election
(Article I, S9) - which permits localities to authorize, subject to
state legislative supervision and control, the conduce of games of
chance events.

According to the 10-day budget report of this legislation in 1976, the
voter referendum on games of chance came about because games of chance
operations were being conducted by charitable and service organizations
on a widespread and open basis, although such games were illegal.

This legislation looks to make changes to the laws of 1976 for similar
reasons, with raffling off alcohol as a common, widespread practice
although such activity is illegal. This new legislation will clarify
confusion within the beverage industry and charitable gaming groups,
while accelerating the growth of craft beverages, beer, wine and spirits
industries and bona fide charitable and service organizations. Craft
breweries, wineries and distilleries often donate products to charities
as in-kind donations, as a way to help the charity while at the same
time, promoting their products. We should not be restricting the growth
of one of New York's fastest growing industries. Wineries, cideries and
brewery businesses in New York State have showed consistent and signif-
icant growth over the last few years and are putting themselves at
legal-risk when they donate their products to charities as in-kind
donations for raffle purposes.

According to the New York State Brewers Association, the number of New
York State breweries grew from 95 in 2012 to 207 in 2014, making them
3rd in the country with an Economic Impact of $3.5 Billion dollars.  In
2012, New York State was the 6th largest beer producing state behind
California, Pennsylvania, Colorado, Ohio and Oregon. New York State
craft breweries increased production by 26% from 557,436 in 2011 to
859,536 barrels in 2012, while at the same time nationally, the craft
beer segment only grew by 15%.  According to the New York Wine and Grape
Foundation, the New York grape, grape juice and wine industry generates
more than $4.8 billion in economic benefits annually for New York State.
New York is home to over 1,600 family vineyards and over 400 wineries,
producing more than 175,000,000 bottles of wine per year while providing
$408 million in state and local taxes.

While the local beverage industry is growing, charitable gaming revenue
has remained stagnant. Groups that participate in charitable gaming are
authorized organizations, defined as any bona fide religious, charita-
ble, educational, service, veteran or volunteer fire organization which
operates without profit to its members. These organizations foster and
support worthy causes and undertakings that the majority of the elector-
ate support. The raffles they host are one of the many fundraising tech-
niques the organizations use. Raffling off donated products helps
promote the product itself, while providing the charitable organization
one-hundred percent profit - a win for both the charity and business.

 
PRIOR LEGISLATIVE HISTORY:

S.6265/A.8623 of 2016; Passed Senate

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.