S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3666
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 3, 2023
                                ___________
 
 Introduced  by M. of A. PRETLOW -- read once and referred to the Commit-
   tee on Racing and Wagering
 
 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:
 
   Section 1. Paragraph (w) of subdivision  1  of  section  1367  of  the
 racing,  pari-mutuel  wagering and breeding law, as amended by section 3
 of part Y of chapter 59 of the laws of  2021,  is  amended  to  read  as
 follows:
   (w)  "Sports wager" means cash [or], cash equivalent OR THING OF VALUE
 that is paid by an authorized sports bettor to  a  casino  or  a  mobile
 sports  wagering  licensee  to participate in sports wagering offered by
 such casino or mobile sports wagering licensee;
   § 2. Paragraph (y) of subdivision 1 of section  1367  of  the  racing,
 pari-mutuel wagering and breeding law, as amended by section 3 of part Y
 of chapter 59 of the laws of 2021, is amended to read as follows:
   (y)  "Sports  wagering gross revenue" means: [(i)] the amount equal to
 the total of all sports wagers not  attributable  to  prohibited  sports
 events  that  a  CASINO OR mobile sports wagering licensee collects from
 all sports bettors, EXCLUDING WAGERS PLACED  WITH  PROMOTIONAL  WAGERING
 CREDITS OR OTHER THINGS OF VALUE, less the total of all sums not attrib-
 utable  to  prohibited  sports events paid out as winnings to all sports
 bettors, however, that the total of all sums paid  out  as  winnings  to
 sports  bettors  shall  not  include  the  cash  equivalent value of any
 merchandise or thing of value awarded as a prize, AND  LESS  ALL  EXCISE
 TAXES ON SPORTS WAGERS NOT ATTRIBUTABLE TO PROHIBITED SPORTS EVENTS PAID
 PURSUANT TO FEDERAL LAW;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04665-01-3
 A. 3666                             2
 
              

   § 3. Subdivision 7 of section 1367 of the racing, pari-mutuel wagering
 and  breeding  law, as added by section 3 of part Y of chapter 59 of the
 laws of 2021, is amended to read as follows:
   7. For the privilege of conducting sports wagering in the state, casi-
 nos  shall  pay a tax equivalent to ten percent of their sports wagering
 gross gaming revenue, excluding sports  wagering  gross  gaming  revenue
 attributed  to  mobile sports wagering offered pursuant to section thir-
 teen hundred sixty-seven-a of this title. Platform providers shall pay a
 tax constituting a certain  percentage  of  the  sports  wagering  gross
 gaming revenue attributed to mobile sports wagering offered through such
 platform  provider's  platform  pursuant  to  section  thirteen  hundred
 sixty-seven-a of this title;  provided  however,  that  such  percentage
 shall be determined [pursuant to a competitive bidding process conducted
 by  the commission] as outlined in subdivision seven of section thirteen
 hundred sixty-seven-a of this title; and  provided  further,  that  such
 percentage  shall  be  no  lower  than  twelve percent. [When awarding a
 license pursuant to  section  thirteen  hundred  sixty-seven-a  of  this
 title,  the  commission  may  set graduated tax rates; provided however,
 that any such tax rates may not be lower than the  minimum  rate  estab-
 lished  in  this  subdivision.]  THIS  TAX SHALL BE IN LIEU OF ALL OTHER
 STATE AND LOCAL TAXES AND FEES IMPOSED  ON  THE  OPERATION  OF,  OR  THE
 PROCEEDS  FROM,  THE OPERATION OF SPORTS WAGERING, EXCEPT AS PROVIDED IN
 THIS SECTION AND SECTION THIRTEEN HUNDRED SIXTY-SEVEN-A OF THIS TITLE.
   § 4. Subdivision 8 of section 1367 of the racing, pari-mutuel wagering
 and breeding law, as added by section 3 of part Y of chapter 59  of  the
 laws of 2021, is amended to read as follows:
   8. Notwithstanding section thirteen hundred fifty-one of this article,
 mobile  sports  wagering  gross  gaming revenue and tax revenue shall be
 excluded from sports wagering gross  gaming  revenue  and  tax  revenue.
 Mobile  sports  wagering  tax revenue shall be separately maintained and
 returned to the state for deposit into the state lottery fund for educa-
 tion aid except as otherwise provided in this subdivision. Any  interest
 and  penalties  imposed  by  the commission relating to those taxes, all
 penalties levied and collected by the commission,  and  the  appropriate
 funds,  cash or prizes forfeited from sports wagering shall be deposited
 into the state lottery fund for education. In the first fiscal  year  in
 which  mobile  sports  wagering licensees commence operations and accept
 mobile sports wagers pursuant to this section, the commission shall  pay
 into  the commercial gaming fund one percent of the state tax imposed on
 mobile sports wagering by this section to  be  distributed  for  problem
 gambling  education  and  treatment  purposes pursuant to paragraph a of
 subdivision four of section ninety-seven-nnnn of the state finance  law;
 provided however, that such amount shall be equal to six million dollars
 for  each  fiscal  year  thereafter.  In  the first fiscal year in which
 mobile sports wagering licensees commence operations and  accept  mobile
 sports  wagers  pursuant  to  this section, the commission shall pay one
 percent of the state tax imposed  on  mobile  sports  wagering  by  this
 section  to the general fund, a program to be administered by the office
 of children and family services for a statewide youth sports  activities
 and  education  grant program for the purpose of providing annual awards
 to sports programs for underserved  youth  under  the  age  of  eighteen
 years; provided however, that such amount shall be equal to five million
 dollars for each fiscal year thereafter. The commission shall require at
 least  monthly  deposits by a platform provider of any payments pursuant
 to subdivision seven of this section, at such times, under  such  condi-
 tions,  and  in  such  depositories  as shall be prescribed by the state
 A. 3666                             3
 
 comptroller.  IN A MONTH WHEN THE AMOUNT OF SPORTS WAGERING GROSS REVEN-
 UE FOR A PLATFORM PROVIDER IS A NEGATIVE NUMBER, SUCH PLATFORM  PROVIDER
 MAY  CARRY  OVER  THE NEGATIVE AMOUNT TO THE RETURN FILED FOR THE SUBSE-
 QUENT  MONTH.   HOWEVER, NO AMOUNT SHALL BE CARRIED OVER FOR A PERIOD OF
 MORE THAN TWELVE MONTHS AFTER THE MONTH IN WHICH THE AMOUNT CARRIED OVER
 WAS ORIGINALLY DUE. The deposits shall be deposited to the credit of the
 state commercial gaming revenue fund. The  commission  shall  require  a
 monthly  report  and  reconciliation statement to be filed with it on or
 before the tenth day of each month, with respect to gross  revenues  and
 deposits received and made, respectively, during the preceding month.
   § 5. Subdivision 7 of section 1367-a of the racing, pari-mutuel wager-
 ing  and  breeding law, as added by section 4 of part Y of chapter 59 of
 the laws of 2021, is amended and two new subdivisions 8 and 9 are  added
 to read as follows:
   7.  A  platform  provider may be licensed by the commission only after
 having been selected for potential licensure by the commission following
 a competitive bidding process in which  the  commission  shall  issue  a
 request  for applications no later than July first, two thousand twenty-
 one; provided however, that the deadline for submission of  applications
 shall be no later than thirty days after the date upon which the commis-
 sion issues such request for applications.
   (a)  The  commission  shall  select  platform providers based upon the
 criteria set forth in this section no later than one hundred fifty days,
 to the extent practicable, after the final application is received.  The
 commission may disqualify applicants from licensure consideration if the
 applicant  or  the mobile sports wagering operator or operators included
 in their bid have not satisfied provision of required application infor-
 mation, fail to meet any platform provider and  mobile  sports  wagering
 operator  eligibility  criteria  established pursuant to the request for
 applications, or are deemed by the commission to have not satisfied  the
 criteria pursuant to subdivision five of this section.
   (a-1)  The  commission  shall publish on its website the criteria that
 will be used to score applications based upon the criteria set forth  in
 paragraph  (c)  of this subdivision; provided however, that such scoring
 methodology shall award additional  points  to  an  applicant  that  has
 entered  into an agreement that includes revenue sharing related to such
 mobile sports  wagering  with  compacted  Native  American  tribe(s)  or
 nation(s).
   (b)  The  commission  shall  determine  the  form  of  application for
 bidders, which shall require, at a minimum, the following information:
   (i) Different scenarios for  the  number  of  platform  providers  and
 number  of  mobile sports wagering operators licensed by the commission.
 For each scenario, this shall include estimates of mobile sports  wager-
 ing gross gaming revenue and the bases for such estimates[, the percent-
 age  of gross revenue from mobile sports wagering the applicant will pay
 to the state for the privilege of licensure if chosen], and the percent-
 age of overall mobile sports wagering gross gaming revenue estimated  to
 be generated;
   (ii) The number of mobile sports wagering operators the applicant will
 host  on  its  mobile  sports  wagering  platform,  if  the applicant is
 licensed as a platform provider;
   (iii) A description of how the applicant will use technology to ensure
 all bettors are physically within approved locations within  the  state,
 that  any  wager  is  accepted through equipment physically located at a
 licensed gaming facility and that necessary  safeguards  against  abuses
 and addictions are in place;
 A. 3666                             4
 
   (iv)  The  applicant  and  any  associated  operators  such  applicant
 proposes in its application possess the qualifications, capabilities and
 experience to provide a mobile sports wagering platform;
   (v)  A list of all jurisdictions where the applicant and parent compa-
 ny, and mobile sports wagering operator or operators and parent  company
 or  companies  have been licensed or otherwise authorized by contract or
 otherwise to conduct sports wagering operations. This shall include  the
 applicant  and its mobile sports wagering operator or operators' experi-
 ence in such other markets;
   (vi) Player acquisition model, advertising and affiliate programs  and
 marketing  budget, including details on how the applicant and its mobile
 sports wagering operator or operators will convert customers from wager-
 ing through illegal channels to wagering legally in the state;
   (vii) Timeframe to implement mobile  sports  wagering  from  award  of
 license;
   (viii) The applicant and mobile sports wagering operator or operators'
 capacity  to  bring  authorized  sports bettors into their mobile sports
 wagering platform; and
   (ix) Integrity monitoring and reporting including any  current  affil-
 iations related to integrity monitoring.
   (c)  In determining whether an applicant shall be eligible for a plat-
 form provider license, the commission shall evaluate how each  applicant
 proposes  to  maximize  sustainable,  long-term revenue for the state by
 evaluating the following factors:
   (i) A market analysis detailing the benefits of the applicant's bid as
 it relates to maximizing revenue to the state;
   (ii) Estimates of mobile sports wagering gross gaming  revenue  gener-
 ated by the applicant under different scenarios;
   (iii) The percentage of mobile sports wagering gross gaming revenue to
 be paid to the state under different scenarios PURSUANT TO PARAGRAPH (D)
 OF THIS SUBDIVISION;
   (iv) The potential market share of the mobile sports wagering operator
 or operators under different scenarios;
   (v)  Advertising  and  promotional plans of the mobile sports wagering
 operator or operators;
   (vi) Past experience and expertise in the market of the applicant  and
 any  mobile sports wagering operator or operators which are part of such
 applicant's application;
   (vii) The  applicant's  capacity  to  rapidly  and  effectively  bring
 authorized sports bettors into its platform;
   (viii) A demonstration of how and to what degree the applicant fosters
 racial, ethnic, and gender diversity in its workforce;
   (ix)  Timeframe  to  implement  mobile  sports  wagering from award of
 license;
   (x) Any other factors that could impact the integrity,  sustainability
 or safety of the mobile sports wagering system; and
   (xi) Any other factors that could impact revenue to the state.
   (d)  The  commission  shall  award  a license to [each of the two] THE
 highest scoring platform providers that  submit  applications;  provided
 however,  that  such  awards  shall require that [both] winning platform
 providers pay the same tax rate; and provided further, that the  commis-
 sion  shall  require  that  no  less  than [four] FOURTEEN mobile sports
 wagering operators will be operating in the  state  BY  JANUARY  THIRTY-
 FIRST, TWO THOUSAND TWENTY-FOUR AND SIXTEEN BY JANUARY THIRTY-FIRST, TWO
 THOUSAND  TWENTY-FIVE. IN THE EVENT THAT THE COMMISSION FAILS TO APPROVE
 THE REQUIRED NUMBER OF OPERATORS BY THESE DEADLINES, IT SHALL NOT INTER-
 A. 3666                             5
 
 FERE WITH THE ABILITY OF PREVIOUSLY LICENSED PLATFORMS OR OPERATORS FROM
 CONTINUING TO OPERATE IN THE STATE. The commission may award  additional
 licenses  if  it  determines that such additional awards are in the best
 interests  of the state[; provided however, that any additional platform
 providers awarded licenses must also agree to pay the same tax  rate  as
 those  platform  providers  that  were initially awarded licenses by the
 commission]. The award of any such license shall require each  applicant
 to  remit  the  [highest] percentage of gross gaming revenue from mobile
 sports wagering [contained in an applicant's bid selected by the commis-
 sion considered for licensure. A qualified applicant shall  be  afforded
 the  ability  to revise its bid in any such manner in order for such bid
 to meet the percentage of gross gaming revenue from mobile sports wager-
 ing as required by the commission for license award, provided  that  the
 bid  does  not incorporate any additional operators not already included
 in the bid; and provided however  that  it  is  not  determined  by  the
 commission  that  the  revised  bid no longer meets all requirements and
 criteria established pursuant to this section and the request for appli-
 cations. Any applicant that does not revise its bid to meet the percent-
 age of gross gaming revenue from mobile sports wagering required by  the
 commission  for  license award shall not be awarded a license.] BASED ON
 THE NUMBER OF LICENSED MOBILE SPORTS WAGERING OPERATORS AS LISTED BELOW:
   4-5 OPERATORS.......................SIXTY-FOUR PERCENT (64%)
   6 OPERATORS..........................SIXTY-TWO PERCENT (62%)
   7 OPERATORS.......................SIXTY PERCENT (60%)
   8 OPERATORS.......................FIFTY-EIGHT PERCENT (58%)
   9 OPERATORS..........................FIFTY-ONE PERCENT (51%)
   10-12 OPERATORS.........................FIFTY PERCENT (50%)
   13-14 OPERATORS........................THIRTY-FIVE PERCENT (35%)
   15 OR MORE OPERATORS...................TWENTY-FIVE PERCENT (25%)
   8. PURSUANT TO SUBDIVISION SEVEN OF THIS SECTION, THE COMMISSION SHALL
 AWARD NO FEWER THAN FOURTEEN MOBILE SPORTS WAGERING LICENSES BY  JANUARY
 THIRTY-FIRST,  TWO  THOUSAND  TWENTY-FOUR  AND  NO FEWER THAN SIXTEEN BY
 JANUARY THIRTY-FIRST, TWO THOUSAND TWENTY-FIVE.
   (A) THE COMMISSION SHALL ACCEPT APPLICATIONS FOR MOBILE SPORTS  WAGER-
 ING LICENSES ISSUED PURSUANT TO THIS SUBDIVISION AT THE EARLIER OF THIR-
 TY  DAYS  AFTER  ALL  MOBILE SPORTS WAGERING LICENSEES AWARDED A LICENSE
 PURSUANT TO SUBDIVISION SEVEN OF THIS  SECTION  COMMENCE  OPERATIONS  OR
 SEPTEMBER FIRST, TWO THOUSAND TWENTY-TWO.
   (B)  APPLICANTS  THAT  PARTICIPATED IN THE REQUEST FOR PROPOSAL ISSUED
 PURSUANT TO SUBDIVISION SEVEN OF THIS SECTION AND NOT AWARDED  A  MOBILE
 SPORTS  WAGERING  LICENSE SHALL AUTOMATICALLY BE ELIGIBLE TO REAPPLY FOR
 CONSIDERATION PURSUANT TO THIS SUBDIVISION. THE  COMMISSION  SHALL  ONLY
 ACCEPT  SUCH  APPLICATIONS  ELECTRONICALLY AND WILL GIVE PRIORITY TO THE
 REVIEW AND SCORING OF REAPPLYING APPLICANTS.
   (I) NOTHING HEREIN SHALL PROHIBIT A PLATFORM  PROVIDER  THAT  DID  NOT
 PREVIOUSLY  RESPOND  TO  THE  REQUEST FOR APPLICATION FROM APPLYING. NEW
 APPLICANTS SHALL SUBMIT APPLICATIONS DEMONSTRATING THE CRITERIA OUTLINED
 IN PARAGRAPHS (A-1), (B), AND (C) OF SUBDIVISION SEVEN OF THIS SECTION.
   (II) ANY APPLICANT FOR A MOBILE SPORTS WAGERING  LICENSE  PURSUANT  TO
 THIS  SUBDIVISION  SHALL  SATISFY  ANY  REQUIREMENTS  IN THE REQUEST FOR
 APPLICATION CONCERNING POSSESSING QUALIFICATIONS, CAPABILITIES AND EXPE-
 RIENCE TO PROVIDE A MOBILE SPORTS WAGERING PLATFORM, PURSUANT TO SUBPAR-
 AGRAPHS (IV) AND (V) OF PARAGRAPH (B) AND SUBPARAGRAPH (VI) OF PARAGRAPH
 (C) OF SUBDIVISION  SEVEN  OF  THIS  SECTION,  IF  THERE  IS  AN  ENTITY
 COMPRISED  OF  NO  MORE  THAN  SIX INDIVIDUALS QUALIFIED AS MEMBERS OF A
 MINORITY GROUP AS DEFINED BY SUBDIVISION EIGHT OF SECTION THREE  HUNDRED
 A. 3666                             6
 
 TEN  OF THE EXECUTIVE LAW WITH A DIRECT OR INDIRECT ECONOMIC INTEREST OF
 AT LEAST FIVE PERCENT IN THE APPLICANT. THE COMMISSION SHALL ADVANCE FOR
 LICENSURE AT LEAST TWO APPLICANTS HAVING SUCH QUALIFIED MINORITY INVEST-
 MENT.
   (C)  THE  COMMISSION  SHALL  MAKE DETERMINATIONS TO AWARD A LICENSE OR
 DISQUALIFY THE APPLICANT ON A ROLLING  BASIS  TO  EXPEDITE  ISSUANCE  OF
 ADDITIONAL LICENSES AND MAXIMIZE REVENUE TO THE STATE.
   (D)  AS  A  CONDITION  OF  LICENSURE PURSUANT TO THIS SUBDIVISION, THE
 COMMISSION SHALL REQUIRE  THAT  EACH  PLATFORM  PROVIDER  AUTHORIZED  TO
 CONDUCT MOBILE SPORTS WAGERING PAY A ONE-TIME FEE OF TWENTY-FIVE MILLION
 DOLLARS  AND  EACH OPERATOR AUTHORIZED TO CONDUCT MOBILE SPORTS WAGERING
 ON A PLATFORM LICENSED PURSUANT TO SUBDIVISION  SEVEN  OF  THIS  SECTION
 SHALL  PAY A FEE OF FIFTY MILLION DOLLARS. SUCH FEE SHALL BE PAID WITHIN
 THIRTY DAYS OF COMMISSION APPROVAL PRIOR TO LICENSE ISSUANCE AND  DEPOS-
 ITED INTO THE STATE LOTTERY FUND FOR EDUCATION AID.
   9.  (A) AN AUTHORIZED SPORTS BETTOR MAY MAKE USE OF PROMOTIONAL WAGER-
 ING CREDITS FOR PURPOSES OF PLACING A SPORTS WAGER. PROMOTIONAL WAGERING
 CREDIT MAY INCLUDE, BUT IS NOT LIMITED TO, FREE PLAYS,  DEPOSIT  MATCHES
 AND  ANY  OTHER  BONUS  THAT A MOBILE SPORTS WAGERING OPERATOR OFFERS OR
 GIVES TO A PATRON AS AN INCENTIVE.
   (B) A MOBILE SPORTS WAGERING OPERATOR MAY EXCLUDE SPORTS  WAGERS  THAT
 WERE  PLACED  USING PROMOTIONAL WAGERING CREDIT FROM ITS SPORTS WAGERING
 GROSS REVENUE.
   § 6. This act shall take effect immediately.