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
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§ 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;
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(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-
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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
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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.