§ 156.40 Operating an unlawful electronic sweepstakes.

1. As used in this section the following words and terms shall have
the following meanings:

(a) "Electronic machine or device" means a mechanically, electrically
or electronically operated machine or device that is owned, leased or
otherwise possessed by a sweepstakes sponsor or promoter, or any
sponsors, promoters, partners, affiliates, subsidiaries or contractors
thereof; that is intended to be used by a sweepstakes entrant; that uses
energy; and that displays the results of a game entry or game outcome to
a participant on a screen or other mechanism at a business location,
including a private club; provided, that an electronic machine or device
may, without limitation:

(1) be server-based;

(2) use a simulated game terminal as a representation of the prizes
associated with the results of the sweepstakes entries;

(3) utilize software such that the simulated game influences or
determines the winning or value of the prize;

(4) select prizes from a predetermined finite pool of entries;

(5) utilize a mechanism that reveals the content of a predetermined
sweepstakes entry;

(6) predetermine the prize results and stores those results for
delivery at the time the sweepstakes entry results are revealed;

(7) utilize software to create a game result;

(8) require deposit of any money, coin or token, or the use of any
credit card, debit card, prepaid card or any other method of payment to
activate the electronic machine or device;

(9) require direct payment into the electronic machine or device, or
remote activation of the electronic machine or device;

(10) require purchase of a related product having legitimate value;

(11) reveal the prize incrementally, even though it may not influence
if a prize is awarded or the value of any prize awarded;

(12) determine and associate the prize with an entry or entries at the
time the sweepstakes is entered; or

(13) be a slot machine or other form of electrical, mechanical, or
computer game.

(b) "Enter" or "entry" means the act or process by which a person
becomes eligible to receive any prize offered in a sweepstakes.

(c) "Entertaining display" means any visual information, capable of
being seen by a sweepstakes entrant, that takes the form of actual game
play or simulated game play.

(d) "Prize" means any gift, award, gratuity, good, service, credit or
anything else of value, which may be transferred to a person, whether
possession of the prize is actually transferred, or placed on an account
or other record as evidence of the intent to transfer the prize.

(e) "Sweepstakes" means any game, advertising scheme or plan, or other
promotion, which, with or without payment of any consideration, a person
may enter to win or become eligible to receive any prize, the
determination of which is based upon chance.

2. A person is guilty of operating an unlawful electronic sweepstakes
when he or she knowingly possesses with the intent to operate, or place
into operation, an electronic machine or device to:

(a) conduct a sweepstakes through the use of an entertaining display,
including the entry process or the reveal of a prize; or

(b) promote a sweepstakes that is conducted through the use of an
entertaining display, including the entry process or the reveal of a
prize.

3. Nothing in this section shall be construed to make illegal any
activity which is lawfully conducted as the New York state lottery for
education as authorized by article thirty-four of the tax law;
pari-mutuel wagering on horse races as authorized by articles two,
three, four, five-A, and ten of the racing, pari-mutuel wagering and
breeding law; the game of bingo as authorized pursuant to article
fourteen-H of the general municipal law; games of chance as authorized
pursuant to article nine-A of the general municipal law; gaming as
authorized by article thirteen of the racing, pari-mutuel wagering and
breeding law; or pursuant to the federal Indian Gaming Regulatory Act.

Operating an unlawful electronic sweepstakes is a class E felony.