S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8471
 
                             I N  S E N A T E
 
                               March 4, 2022
                                ___________
 
 Introduced  by  Sen. ADDABBO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Racing, Gaming and  Wager-
   ing
 
 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;
   § 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:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14112-03-2
              

 S. 8471                             2
 
   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
 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-
 S. 8471                             3
 
 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;
   (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;
 S. 8471                             4
 
   (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-THREE AND SIXTEEN BY JANUARY THIRTY-FIRST,
 TWO THOUSAND TWENTY-FOUR. IN THE EVENT  THAT  THE  COMMISSION  FAILS  TO
 APPROVE  THE  REQUIRED  NUMBER OF OPERATORS BY THESE DEADLINES, IT SHALL
 NOT INTERFERE WITH THE ABILITY OF PREVIOUSLY LICENSED PLATFORMS OR OPER-
 ATORS FROM CONTINUING TO OPERATE IN THE STATE. The commission may  award
 additional  licenses if it determines that such additional awards are in
 S. 8471                             5
 
 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 appli-
 cant  to  remit  the  [highest]  percentage of gross gaming revenue from
 mobile sports wagering [contained in an applicant's bid selected by  the
 commission  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 wagering  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  deter-
 mined  by  the  commission  that  the  revised  bid  no longer meets all
 requirements and criteria established pursuant to this section  and  the
 request  for applications. Any applicant that does not revise its bid to
 meet the percentage 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  OPERA-
 TORS 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-THREE AND NO  FEWER  THAN  SIXTEEN  BY
 JANUARY THIRTY-FIRST, TWO THOUSAND TWENTY-FOUR.
   (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
 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
 S. 8471                             6

 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.