SGC-12-16-00009-A Consequences for Commission Licensees, Agents, and Other Regulated Parties Who Violate Prohibition on Underage Wagering  

  • 6/8/16 N.Y. St. Reg. SGC-12-16-00009-A
    NEW YORK STATE REGISTER
    VOLUME XXXVIII, ISSUE 23
    June 08, 2016
    RULE MAKING ACTIVITIES
    NEW YORK STATE GAMING COMMISSION
    NOTICE OF ADOPTION
     
    I.D No. SGC-12-16-00009-A
    Filing No. 509
    Filing Date. May. 24, 2016
    Effective Date. Jun. 08, 2016
    Consequences for Commission Licensees, Agents, and Other Regulated Parties Who Violate Prohibition on Underage Wagering
    PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
    Action taken:
    Amendment of sections 4003.39, 4122.6, 4404.10, 4602.1, 4622.2, 4622.3, 5001.27, 5007.5, 5007.13, 5013.3 and 5117.1 of Title 9 NYCRR.
    Statutory authority:
    Racing, Pari-Mutuel Wagering and Breeding Law, sections 104, 108 and 116; Tax Law, sections 1601, 1604, 1610 and 1612; General Municipal Law, sections 195-a and 486
    Subject:
    Consequences for Commission licensees, agents, and other regulated parties who violate prohibition on underage wagering.
    Purpose:
    To further enforce the age restriction laws for gambling by imposing fines, suspensions and/or license revocation.
    Text or summary was published
    in the March 23, 2016 issue of the Register, I.D. No. SGC-12-16-00009-P.
    Final rule as compared with last published rule:
    No changes.
    Text of rule and any required statements and analyses may be obtained from:
    Kristen Buckley, Acting Secretary, New York State Gaming Commission, One Broadway Center, Schenectady, NY 12305, (518) 388-3407, email: gamingrules@gaming.ny.gov
    Initial Review of Rule
    As a rule that does not require a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2021, which is no later than the 5th year after the year in which this rule is being adopted.
    Assessment of Public Comment
    The Gaming Commission received two comments, one from the New York Gaming Association (NYGA) and one from six collaborating trade associations representing convenience stores, grocery stores, gas stations, taverns and other retail establishments that are licensed to sell New York Lottery products in regard to this proposed rulemaking. The Commission has considered each of the comments received and decided that no changes were appropriate at this time.
    NYGA stated that the proposed regulations are not necessary, inadvisably remove Commission discretion to determine penalties, are unduly harsh in not allowing consideration of mitigating circumstances and impose unreasonable new burdens on operators. In general, NYGA opposed fixed penalties for violations that do not allow for the exercise of Commission discretion. NYGA asserted that facts and circumstances can vary significantly and that “unintentional” violations should not be punished as severely as violations involving “genuine misconduct or fault.” NYGA suggested that the importance of advance notice of possible penalties could be addressed through suggested, rather than mandated, penalties. In particular, NYGA stated that the proposed fines for allowing underage wagering at race tracks are excessive, especially with no provision for circumstances in which a minor produces false identification. NYGA noted that with respect to underage violations at video lottery facilities, the proposed penalties would be unduly harsh in circumstances in which apparent violations are remedied quickly (for example, within minutes, or when a minor crosses the gaming floor to use a restroom). NYGA also stated that it would be unfair for multiple violations to accrue from a single incident.
    The Commission considered NYGA’s comments and did not make any amendments to the proposed rulemaking in response. The Commission is considering whether affirmative defenses similar to those existing in regard to video lottery would be appropriate in other regulated forms of gaming and, if so, will suggest a proposed rulemaking to address those concerns. With regard to the examples of minors on video lottery gaming floors, the Commission would retain discretion to determine whether a violation occurred. Only when it is determined that a violation occurred would the prescribed sanctions apply. For example, in the event the proposed rules were adopted, a minor quickly entering and exiting a gaming floor to use a restroom might, under the circumstances, not be charged as a violation at all. Similarly, an incident in which two minors accompany an adult on a gaming floor might, under the circumstances, be charged as one violation, which would result in one level of fine, not two levels concurrently, as NYGA suggests might be possible.
    The second public comment was submitted jointly by the Food Industry Alliance of New York State, the Empire State Restaurant & Tavern Association, the Bodega Association of the United States, the New York State Association of Service Station and Repair Shops, the New York Association of Convenience Stores and the Long Island Gasoline Retailers Association (the “Joint Comment”). The Joint Comment stated that the proposed penalty structure for selling lottery tickets to minors seems to be reasonable. The Joint Comment opposed enforcement of the proposed penalties in regard to lottery vending machines until the Commission retrofits each lottery vending machine with an identification-card reader. The writers of the Joint Comment believed that it is too difficult to monitor a vending machine. The Joint Comment urges that a hearing process should afford lottery retailers an opportunity to defend themselves. The Joint Comment recommends that it be made unlawful for a person over the age of 18 to provide a lottery ticket to an underage customer. The Joint Comment states that language clarifying the meaning of the multiple-violation penalty structure would be beneficial. The Joint Comment states that the regulations should set forth which agency or agencies will be authorized to carry out underage lottery sale enforcement, that retailers should “know up-front what the rules of engagement are” and that an enforcement plan should be detailed and published for comment before put into practice.
    The Commission considered the Joint Comment and did not make any amendments to the proposed rulemaking.
    Improved technology would be useful to promote compliance in regard to lottery ticket vending machines, but is not necessary. Furthermore, the Commission would retain discretion to determine whether a violation had occurred at all in regard to a violation involving a lottery ticket vending machine.
    With regard to hearings for lottery retailers, the Commission is considering whether affirmative defenses similar to those existing in regard to video lottery would be appropriate in other regulated forms of gaming and, if so, will suggest a proposed rulemaking to address that concern, which would include hearing procedures.
    With regard to the provision of lottery tickets by purchasers who are over the age of 18 to underage persons, the legislature has made the policy choice that persons under the age of 18 may receive lottery tickets and be entitled to lottery prizes, see Tax Law § 1613(b) (providing for procedures for paying prizes to minors), even though lottery tickets may not be sold to persons under the age of 18. See Tax Law § 1610(a).
    With regard to the multiple-violation penalty structure, the Commission believes that the intent is clear to measure the potential penalty for a subsequent violation from the time of the initial violation from which the time period is measured. For example, if violations occur on January 1, 2017, June 1, 2017 and April 1, 2018, to use the example in the Joint Comment, the January 1, 2017 violation would result in a written warning, the June 1, 2017 violation would result in a $500 fine (as a second violation within one year of January 1, 2017) and the April 1, 2018 violation would result in a $500 fine (as a second violation within one year of June 1, 2017). The Commission will consider the advisability of providing examples in written direction to retailers.
    With regard to enforcement implementation, the Commission does not believe that the description of enforcement methods is an appropriate matter for regulation.

Document Information

Effective Date:
6/8/2016
Publish Date:
06/08/2016