Senate Bill S7908

                                 
BILL NUMBER: S7908

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend the racing, pari-mutuel wagering and breeding law, in
relation to preventing minors from participating in sports wagering

 
PURPOSE OR GENERAL IDEA OF BILL:

To prevent illegal underage gambling on mobile sports betting websites
and apps by requiring operators of such websites and apps to conduct
commercially reasonable age assurance for account holders and to allow
individuals such as a parent to register their personal data so that an
underage user cannot borrow it to create an account

 
SUMMARY OF PROVISIONS:

Section one amends subparagraph (iv) of paragraph (i) of subdivision 12
of Section 1367 of Racing, Parti-Mutuel Wagering and Breeding Law (PML)
to require mobile sports wagering licensees to incorporate the exclusion
list created in the bill into their existing procedures to prevent
              

prohibited persons from placing sports wagers under the law.

Section two adds a new paragraph (k) to subdivision 12 of Section 1367
of PML to create a digital version of the NYS Gaming Commission's
current exclusion process for in-person gaming facilities. This section
essentially adapts the Gaming Commission's voluntary self-exclusion
program that they offer to individuals who may self-identify as problem
gamblers and wish to be excluded from in-person sports betting, commer-
cial casinos, video lottery games, traditional lottery draw, QuickDraw,
interactive fantasy sports, hose racing, and charitable gaming activ-
ities at facilities around the state. Individuals wishing to self-ex-
clude currently must complete a physical form, get it notarized, and
mailed to the Gaming Commission headquarters in Schenectady, New York.

Paragraph (k) requires the Gaming Commission to create a digital version
of this process for mobile sports betting, wherein individuals could
register any of their identifying information, so long as it is unique
and can reliably be associated with them, to a virtual exclusion list
which would prevent themselves or any other person, such as a minor,
from borrowing their identifying information to create an account. The
Gaming Commission would be required to promulgate regulations to ensure
that such personal information is securely protected with safeguards
such as encryption, firewalls, and password protection, and that the
data would be permanently deleted if the individual at any point decided
to rescind their place on the exclusion list.

Section three of this bill amends subparagraph (iii) of paragrap(
j),gf,subdivision 4 of Section 1367-a of PML to require mobile sports
wagering operitorVtotonduct commercially reasonable and technically
feasible age assurance for users on their platforms at the point of
account creation. The Commission would promulgate regulations outlining
acceptable methods of age assurance, which may mirror the acceptable age
assurance methods for another set of large and sophisticated apps,
social media apps with addictive feeds covered under General Business
Law Article 45, who are required to determine the ages of their users
for the purposes of that article. The bill precludes self-reporting of
age with no other corroborating evidence, however, as an acceptable
method of age assurance. Mobile sports wagering operators would also be
required to accept age signals from devices, which could be included in
the Gaming Commission's regulations as one possible method of age assur-
ance.

Section four of the bill is a severability clause. Section five of the
bill sets the effective date.

 
JUSTIFICATION:

New York first legalized mobile sports betting, wherein users can place
virtual wagers via a website or app on the outcome of a sporting event,
the individual performance of an athlete, or a combination thereof, in
the FY22 budget (Part Y of Section 4 of Ch.  59 of 2021). Mobile sports
betting operators, such as Bally Bet, Caesars Sportsbook, DraftKings,
ESPN Bet, FanDuel, and others, would finally be able to offer their
product to New Yorkers provided that they met a number of conditions:
the operators must be licensed by the New York State Gaming Commission,
pay a one-time $25 million fee to the state as well as a 51% tax on
their gaming revenue moving forward, produce a detailed annual report
for the Commission on the total amount of wagers placed and prizes
awarded, and submit to an annual financial audit. Licensees were also
required to take a number of steps to ensure that sports bettors were
limited to a single account, and, crucially, that they were not on a
list of "prohibited sports bettors" which Racing, Pari-Mutuel Wagering
and Breeding Law (PML) § 1367(1)(r) defines as casino or gaming employ-
ees, related contractors and consultants, their spouses, children,
siblings, or parents residing in their principal abode, partici pating
athletes that are the subject of the sports event, sports agents and
owners, union umpire personnel, employees of sports governing bodies
overseeing the sporting event - or any person under the age of 21.

Mobile sports betting operators were required under PAL §
1367-a(4)(a)(iii) to prohibit minors from accessing their platforms
pursuant to Gaming Commission rules and regulations, which currently
stipulate that operators must collect full names, addresses, phone
numbers, self-reported dates of birth (DOB), and the last four digits of
Social Security numbers, unless a user willingly provides a full Social
Security number, at the point of account creation. The Gaming Commission
then prescribes that operators use multi-factor authentication (MFA),
which may include a password, previously provided security questions,
biometric data such as a fingerprint or face or voice recognition, or an
authorization code sent to a user's device or email, to verify a user's
identity and ensure that the bettor is of a legal age.

There are several technical flaws to this approach: firstly, the last
four digits of an individual's Social Security number, which is the
maximum number of digits that users can currently enter on some major
sports betting apps' platforms, is neither unique to a specific person
nor does it tell the collector anything about a user's age.  All of the
other identification factors required to be collected by the Gaming
Commission, such as name, address, phone number, neither prove a user's
age nor are difficult for an underage minor to access.  Instead, sports-
book operators, with the Commission's explicit regulatory blessing,
simply rely on users to tell the truth about whether or not they are of
legal betting age, despite multiple more reliable modern methods of age
determination.

The presence of underage minors on mobile sports betting platforms is
undeniable. Major sportsbook operators DraftKings and FanDuel openly
compete in the lucrative marketplace of college campuses, where a large
chunk of students are under 21. One NCAA survey found that 58% of 18- to
22-year-olds had placed a wager in the last year, with nearly 70% of
college students reporting betting at one point or another (Brooks,
Khristopher. "Underage Teenagers Are Illegally Placing Sports Wagers
Online, Survey Suggests - CBS News."  Www.cbsnews.com, CBS News, 25 May
2023, www.cbsnews.cominews/online-sports-betting-teenagers-ncaa-
survey/.)  Another survey from the National Council on Problem Gambling
found that between 60% and 80% of high schoolers reported sports betting
in the past year, and teachers and students alike report open conversa-
tions about the latest parlay and point spread bet in school hallways on
a daily basis (Cotrone, Colby. "High Stakes for High Schoolers: Wanna
Bet Teens Need Gambling Education?" New York Post, 7 May 2024,
nypost.com/2024/05/07/lifestyle/high-stakes-for-high-schoolers-wanna-bet
-teens-need-q ambling-education/.)

In an October 2023 report, State Comptroller Tom DiNapoli noted the
particular challenges that mobile sports betting presents for youth, who
are more engaged with their smartphones, more compulsive compared to
adults, and more likely to develop an addiction disorder that leads to
other problems later in life (DiNapoli, Thomas. Recent Impact of Gaming
Expansions on Revenues and Problem Gambling in New York. New York State
Comptroller Thomas P. DiNapoli, Oct. 2023.)  Furthermore, outpatient
service providers treating problem gaming and addiction disorders report
a huge surge in underage patients since the legalization of mobile
sports betting, particularly of young male patients, and New York's
gambling "HOPEline" reported a 26% increase in calls in the state's
first year of mobile sports betting (Rock, Julia. "In Brief: Sports
Betting in New York." New York Focus, 2025, nysfo-
cus.com/2025/01/16/what-is-sports-betting-new-york.)

This bill presents a commonsense solution to the problem of easy and
inevitable access of mobile sports betting platforms by minors by
requiring sportsbook operators, only nine of whom are currently licensed
to operate in NYS, to undergo commercially reasonable age assurance to
determine whether or not a user is 21 years of age and thus able to
legally create an account on their platforms. Age assurance, which is
already the law of the land for social media apps with addictive feeds
under Article 45 of General Business Law, is widely deployed across apps
and websites in the 21st century. Mobile sports betting platforms, which
since January of 2022 have facilitated the creation of more than 3.8
million unique user accounts and processed 1.2 billion transactions, are
highly sophisticated technological products that more than capable of
securely collecting, and then deleting, information specific to a user
to determine whether or not they can legally use a platform.  This bill
thus provides that the Gaming Commission must specify acceptable methods
of age assurance in their regulations for the gaming platforms, provided
that the methods are more reliable than user self-reporting of age.

Secondly, this bill requires the Gaming Commission to digitize its
current self-exclusion process for gambling, which allows individuals to
voluntarily exclude themselves from all brick and mortar gaming facili-
ties in the state. Individuals can currently self-exclude for one year,
three years, five years, or a lifetime, but may request removal from the
self-exclusion list at the end of their chosen term.  Individuals apply
for self-exclusion by filling out a physical form which they must get
notarized and mail to the Gaming Commission. The commission then main-
tains a database of self-excluded individuals and sends it to all gaming
operators in the state, who must check it at the point of entry.

This bill would create a similar system for mobile sports betting,
allowing individuals to electronically submit any identifying informa-
tion, so long as it is unique to the individual, to a virtual database
that the Gaming Commission would maintain. In addition to allowing prob-
lem online sports gamblers to constrain themselves from betting activ-
ity, this electronic database would have the added benefit of allowing
parents to register their identifying info, such as a Social Security
number, phone number, credit card, or other piece of unique data, to
prevent their children from using such data to illegally create an
account. While numerous sportsbook operators currently allow parents to
disqualify themselves and their children from online betting, this
requires parents to disqualify from each app and platform one by one,
which is prohibitively cumbersome. Under this bill, the parent would
only need to register their identifying information once, and the Gaming
Commission would then undertake the task of making sure all operators in
the state have access to and are using the database.

In creating a centralized digital database that allows parents to easily
prevent their identifying info from being used to create an account,
while also requiring gaming apps to undertake commercially reasonable
age assurance, this bill presents a commonsense and practical approach
to the growing problem of underage sports betting in New York State and
its deeply disturbing consequences.

 
PRIOR LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.