SGC-19-16-00014-P Conduct and Operation of a Gaming Facility

5/11/16 N.Y. St. Reg. SGC-19-16-00014-P

NEW YORK STATE REGISTER

VOLUME XXXVIII, ISSUE 19

May 11, 2016

RULE MAKING ACTIVITIES

NEW YORK STATE GAMING COMMISSION

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. SGC-19-16-00014-P

Conduct and Operation of a Gaming Facility

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Addition of Part 5313 to Title 9 NYCRR.

Statutory authority:

Racing, Pari-Mutuel Wagering and Breeding Law, sections 104(19), 1307(1), (2)(i), (k), 1331, 1332, 1333, 1334 and 1341(2)

Subject:

Conduct and operation of a gaming facility.

Purpose:

To govern a gaming facility licensee’s system of procedures for the conduct and operation of gaming.

Substance of proposed rule (Full text is posted at the following State website:www.gaming.ny.gov):

The addition of Part 5313 of Subtitle T of Title 9 NYCRR will allow the New York State Gaming Commission (“Commission”) to prescribe requirements for the conduct and operation of gaming including a gaming facility licensee’s system of internal procedures and administrative and accounting controls and the criteria for awarding a gaming facility licensee an operation certificate to commence gaming operations.

Section 5313.1 sets forth the requirements for the internal control system a gaming facility licensee submits to the Commission for approval. Section 5313.2 establishes the minimum age a patron must be to participate in gaming activities and the penalties associated with a gaming facility licensee’s violation of such requirements. Section 5313.3 sets forth the procedure for the alteration or change of gaming facility hours of operation. Section 5313.4 cites to the federal statutory requirements for facility access to a public accommodation. Section 5313.5 sets forth the requirements for access to restricted areas of a gaming facility and an access badge and credential system a gaming facility licensee must adopt. Section 5313.6 provides that a gaming facility licensee retain realty, construction, maintenance and business records for Commission review. Section 5313.7 sets forth the requirement that a gaming facility licensee submit an emergency action plan to the Commission. Section 5313.8 establishes criteria for awarding a gaming facility licensee an operation certificate to commence gaming operations. Section 5313.9 sets forth restrictions on the possession of firearms within a gaming facility. Section 5313.10 sets forth requirements for the retention, storage and destruction of books, records and documents pertaining to the operation of the gaming facility licensee. Section 5313.11 sets forth control and maintenance requirements for sensitive keys. Section 5313.12 and 5313.13 set forth requirements for the installation of facial and license plate recognition equipment. Section 5313.14 sets forth limitations on certain financial access.

Text of proposed rule and any required statements and analyses may be obtained from:

Kristen Buckley, Acting Secretary, New York State Gaming Commission, One Broadway Center, 6th Floor, Schenectady, NY 12305, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. STATUTORY AUTHORITY: Racing, Pari-Mutuel Wagering and Breeding Law (“Racing Law”) section 104(19) grants authority to the Gaming Commission (“Commission”) to promulgate rules and regulations that it deems necessary to carry out its responsibilities. Racing Law section 1307(1) grants rule making authority to the Commission to implement, administer and enforce the provisions of Racing Law Article 13.

Racing Law section 1307(2)(f) requires the Commission to prescribe the manner and method of the collection of taxes, fees, interest and penalties.

Racing Law section 1307(2)(i) prescribes that the Commission regulate the grounds and procedures for the revocation or suspension of an operation certificate.

Racing Law section 1307(2)(k) prescribes that the Commission regulate for gaming operations the procedures, forms and methods of management controls, including, employee and supervisory organization and responsibility and minimum security and surveillance standards.

Racing Law section 1331 provides that no gaming facility may open and no gaming activity may be conducted prior to a determination by the Commission that a gaming facility licensee has satisfied the requirements of Racing Law Article 13 and Subchapter B of the Commission’s regulations and the issuance by the Commission of an operation certificate.

Racing Law section 1332 sets forth the minimum age for gaming participation.

Racing Law section 1333 sets forth requirements with respect to a gaming facility’s hours of operation.

Racing Law section 1334 sets forth the requirements for a gaming facility licensee’s internal control system including procedures relating to, among other things, gaming facility security and surveillance, administrative and accounting controls, the recordation of cash, checks and revenue, the shutdown of operations in the event of a state of emergency.

Racing Law section 1338 prescribes that the Commission regulate the access and use of certain financial systems and instruments at the gaming facility.

Racing Law section 1341(2) requires that a gaming facility licensee maintain a record of each unwritten or written agreement regarding realty, construction, maintenance or business.

2. LEGISLATIVE OBJECTIVES: These provisions enable the Commission to carry out the Upstate New York Gaming Economic Development Act of 2013 as embodied in Chapter 174 of the Laws of 2013 including to maintain the public confidence and trust in the credibility and integrity of legalized gaming activities in order to support the continued growth of the gaming industry that will contribute to economic development and job development in the state.

3. NEEDS AND BENEFITS: The proposed rules implement and help gaming facilities understand the above listed statutory directives regarding the operation and internal controls of licensed gaming facilities. The rules provide specificity with respect to the above listed statutory directives to assure transparent and accountable gaming operations. The rules represent best practices for guiding and promoting consistency in the overall operation of licensed gaming facilities and are the result of input from stakeholders and other gambling jurisdiction regulations. Specifically, best practices addressed in the proposed rules include (i) requiring each gaming facility licensee to establish a system of internal controls in regard to accounting, surveillance, emergency shutdowns and facility administration; (ii) establishing penalties when a gaming facility licensee violates minimum age rules; (iii) requiring each gaming facility licensee to comply with Title III of the American with Disabilities Act of 1990; and (iv) requiring each gaming facility licensee to meet specific benchmarks in order to obtain an operation certificate.

4. COSTS:

(a) Costs to the regulated parties for the implementation of and continuing compliance with these rules: One of the three gaming facility licensees has indicated that the anticipated costs of implementing and complying with the proposed regulations will be approximately $2 to $3 million.

(b) Costs to the regulating agency, the State, and local governments for the implementation of and continued administration of the rule: Based on the Commission’s experience in regulating the conduct and operation of video lottery facilities, it anticipates that the costs associated with the proposed rules would be negligible. These rules will impose no additional costs on local governments.

(c) The information, including the source or sources of such information, and methodology upon which the cost analysis is based: The cost estimates are based on the Commission’s experience regulating racing and gaming activities within the State.

5. LOCAL GOVERNMENT MANDATES: There are no local government mandates associated with these rules.

6. PAPERWORK: These rules impose paperwork burdens on gaming facility licensees to establish, submit and maintain a system of internal controls concerning their administrative and accounting procedures. Examples of paperwork burdens on the gaming facility licensees include the drafting and maintenance of a summary of a gaming facility’s system of administrative and accounting procedures; the drafting of an annual report detailing the gaming facility’s Americans with Disabilities Act policies and practices; the drafting and maintenance of access badge records; the drafting and maintenance of an emergency action plan; and the drafting of notices to the commission regarding amendments or requests with respect to specific operations and internal controls.

7. DUPLICATION: These rules do not duplicate, overlap or conflict with any existing State or federal requirements.

8. ALTERNATIVES: The Commission consulted stakeholders and reviewed other gambling jurisdiction best practices and regulations. Alternatives were discussed and considered with stakeholders and compared to other jurisdiction regulations. These included the appropriate level of internal and external attestation and verification of a gaming facility’s system of internal controls; the appropriate penalties for a gaming facility found to be in violation of rules concerning age for gaming participation; the appropriate amendment and notification process for changes to a gaming facility’s operation certificate; and the best practices concerning facial and license plate recognition. The Commission is also required to promulgate these rules pursuant to Racing Law section 1307(2)(f), (i) and (k). Therefore, no alternatives were considered.

9. FEDERAL STANDARDS: There are no federal standards applicable to the licensing of gaming facilities in New York; it is purely a matter of New York State law.

10. COMPLIANCE SCHEDULE: The Commission anticipates that the affected parties will be able to achieve compliance with these rules upon adoption.

Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

These rules will not have any adverse impact on small businesses, local governments, jobs or rural areas. These rules set forth the requirement that a gaming facility licensee submit its system of administrative and accounting procedures for the conduct and operation of gaming to the Commission in advance of the issuance of an operation certificate. These rules also establish requirements for hours of operation, minimum age participation and access, an emergency action plan, and procedures for key control, facial recognition and license plate recognition. These rules apply only to the licensed gaming facilities.

These rules do not impact local governments or small businesses as it is not expected that any local government or small business will hold a gaming facility license.

These rules impose no adverse impact on rural areas. These rules apply uniformly throughout the state and solely apply to licensed gaming facilities.

These rules will have no adverse impact on job opportunities.

These rules will not adversely impact small businesses, local governments, jobs, or rural areas. Accordingly, a full Regulatory Flexibility Analysis, Rural Area Flexibility Analysis, and Job Impact Statement are not required and have not been prepared.