BILL NUMBER: S1439

SPONSOR: ADDABBO
 
TITLE OF BILL:

An act to amend the racing, pari-mutuel wagering and breeding law and
the penal law, in relation to interactive fantasy sports contests; and
to repeal certain provisions of the racing, pari-mutuel wagering and
breeding law relating thereto

 
PURPOSE:

To update the provisions of article 14 of the racing, pari-mutuel wager-
ing and breeding law relating to the offering and participation in
interactive fantasy sports contests and ensure the continued opportunity
for. New Yorkers to participate in such contests, and to provide for the
severability of statutes pertaining to interactive fantasy sports
contests.

 
SUMMARY OF PROVISIONS:

              

Section 1: Amends the Racing, Pari-Mutuel Wagering and Breeding Law by
repealing section 1412.

Section 2: Amends the Racing, Pari-Mutuel Wagering and Breeding Law by
adding a new section 1413 providing that if a court of competent juris-
diction in a final ruling declares any portion of Article 14, Interac-
tive Fantasy Sports, to be invalid or unconstitutional, the decision
shall affect only the specific portion so adjudged.

Section 3: Amends section 225.00 of the Penal Law to define interactive
fantasy sports contests and exclude such contests from the definition of
contests of chance and to clarify that interactive fantasy sports
contests are riot gambling.

Section 4: Effective date.

 
JUSTIFICATION:

Chapter 231 of the laws of 2016 added a new article 14 to the Racing,
PariMutuel Waaering and Breeding Law which regulated interactive fantasy
sports contests. Additionally, chapter 23'7 of the laws of 2016 express-
ly exempted interactive fantasy sports contests from Penal Law
provisions prohibiting illegal gambling.

In February 2020, the Appellate Division, Third Department, New York
Supreme Court, issued a ruling in which it held that the Legislature's
2016 amendment of the Racing, Peri-Mutual Wagering and Breeding Law to
authorize and regulate interactive fantasy sports contests violates the
New York Constitution, article 1, section 9. The Third Department
further held that the Legislature's contemporaneous amendment of the
Penal Law to expressly allow interactive fantasy sports contests was
also invalid because, the court reasoned, the Legislature intended the
2016 statutory changes to operate holistically and, therefore, individ-
ual sections could not be severed from the rest of the amendments. This
bill will ensure that offering and participating in interactive fantasy
sports contests is not a criminal offense.


This clarification is consistent with the Third Department's observation
in its ruling that decriminalizing interactive fantasy sports wagering
does not violate the New York Constitution, even under the Third Depart-
ment's interpretation of Article 1, section 9.  Further, the proposed
act states the Legislature's intent that should any portion of the 2016
amendments, codified at Article 14 of the Racing, Pari-Mutuel Wagering
and Breeding Law, be deemed invalid or unconstitutional, such ruling
shall not affect the validity of any other provision of Article 14.

 
LEGISLATIVE HISTORY:

2020: S8766A - REFERRED TO RULES

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately, NEW YORK STATE SENATE
INTRODUCER'S MEMORANDUM IN SUPPORT submitted in accordance with Senate
Rule VI. Sec 1