NEW YORK

1. Definition of Gambling
   1. Gambling

      Under the New York Penal Code “[a] person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence . . . .” N.Y. Penal Law § 225.00 (Consol. 2006). There must also exist the element of understanding that the person engaging in the gambling may receive something of value based on certain outcomes of the event. Id. In Muidallap Corp. v. State Liquor Authority, the court held that a night club’s benefit for an actor’s studio, charging a $250 admission fee and providing a chance to win movie star memorabilia did not constitute gambling. 532 N.Y.S.2d 1 (N.Y. App. Div. 1^st Dept. 1988). The court found that even though the movie memorabilia did qualify as a prize the admission fee did not constitute risking something as value as required in the definition of gambling. Id. at 6. Rather, the admission fee served no greater purpose than to permit entry to a function supporting the Actor’s Studio. Id. The court came to this conclusion because none of the evidence provided any indication that attendees were aware of the memorabilia prize at the time of purchasing an admission ticket. Id. Therefore, gambling is not present when “participants” are not intentionally, and with knowledge, risking something of value.

   2. Contest of Chance

      Contests of chance, under New York Law utilize a material element test – where chance plays a material element in the outcome of the game then it will qualify as a contest of chance. N.Y. Penal Law § 225.00 (Consol. 2006). Provided that the element of chance plays a material degree in the outcome, then a contestant’s use of skill in playing the game will not remove the taint that the game is one of chance. Id. The game of three card monte has been found by New York courts to be a game of chance even when played fairly. People v. Denson, 745 N.Y.S.2d 852 (N.Y. Crim. Ct. 2002). “Three card monte masquerades as a game of skill in order to lure players, but in reality, it is at best a game of chance.” Id. at 856 (emphasis in original).

   3. Lottery

      A lottery is an unlawful gambling scheme possessing three primary criteria. N.Y. Penal Law § 225.00 (Consol. 2006). The first criteria is that the participants in the lottery pay something of value for chances. Id. The chances are differentiated based on a number or combination thereof, and one of the chances is designated as the winner. Id. Second, the winning chance is “determined by a drawing or by some other method based upon the element of chance.” Id. Finally, the third criterion is that the participant possessing the winning chance must receive something of value. Id. New York’s Penal definition of lottery does not intent to include a raffle as provided in section 186(3)(b) of the general municipal law. Id.

   4. Policy or “The Numbers Game”

      Policy and “the numbers game” are both a form of lottery schemes. N.Y. Penal Law § 225.00 (Consol. 2006). The difference between these two forms of lottery versus a regular lottery scheme is that the winner is not determined based upon a drawing, instead the winner is determined o the basis of the outcome of a future event unrelated to actual gaming scheme. Id.

2. Definition of Bookmaking

Bookmaking is defined as “advancing gambling activity by unlawfully accepting bets from members of the public as a business, rather than in a casual or person fashion, upon the outcomes of future contingent events.” N.Y. Penal Law § 225.00 (Consol. 2006). A person advances gambling activity by aiding in the conduct of gaming, but not as a player of the game. Id. Aiding in the conduct of gaming, sufficient to qualify as advancing gambling activity includes: creating or establishing a game, contest, scheme or device; involvement in the acquisition or maintenance of premises, devices or equipment; solicitation of participation in the gambling scheme; participation in the financial recording of the game; or any other phase of the gaming operation. Id. Advancement of gambling activity is also evidenced by a person in control of the premises knowingly permitting, or failing to prevent, the property to be used for the purposes of gambling activities. Id.

3. Specific Gaming Device Definitions

A gambling device is any machine, equipment or paraphernalia that is used in the playing of a gambling activity. N.Y. Penal Law § 225.00 (Consol. 2006). The playing of the gambling activity may either be between persons or between a person and a machine. Id. Lottery tickets and policy slips authorized under lawful lottery schemes do not qualify as gambling devices. Id. Coin operated gambling devices also qualify as illegal gambling devices under New York Penal Law. A coin operated gambling device operates via the insertion of something of value, typically a coin or token, into the device. Id. A machine capable of operating as a coin operated gambling device after manipulation or adjustment will qualify as such a device pursuant to this section. Id. Slot machines, also illegal gambling devices, operate as the result of the insertion of a coin or token into the machine permitting the machine to operate either automatically or with the aid of the player, and depending on chance, may eject something of value. Id. A slot machine, although not in working order, is still a slot machine. Id. Machines that permit extended play or free plays will not qualify as a slot machine, provided those free or extended plays depend “in a material degree upon the skill of the player and not in a material degree upon an element of chance.” Id. “A machine which sells items of merchandise which are of equivalent value, is not a slot machine merely because such items differ from each other in composition, size, shape or color.” Id.

4. Bucket Shop Laws

   New York defines a bucket shop as “any building, or any room, apartment, booth, office or store therein or any other place where any contract prohibited by this article is made or offered to be made.” N.Y. Gen. Bus. Law § 351-d (Consol. 2006).

Please see section VIII for an explanation of the penalties for violation of the laws governing bucket shops.

5. Prohibition of Games of Skill
1. Billiards:

In People v. Stiffel, the court held that since billiards is a game of skill, and wagering on games of skill does not qualify as gambling, then a conviction for disorderly conduct due to wagering could not be upheld. 308 N.Y.S.2d 64 (N.Y. App. Term 1969).

2. Poker

Social games of poker are not condemned by New York’s criminal statutes. Katz's Delicatessen, Inc. v. State Liquor Authority, 97 N.E.2d 906, 907 (N.Y. 1951).

3. Darts

Dart games called “Skilo” or “Darto”, possessing characteristics of both the game of darts and the game of bingo constitute games of chance and are not permissible in New York unless expressly authorized by the legislature. 1963 N.Y. Op. Att'y Gen. 51.

6. Express Exemptions

1. New York Constitution

The New York Constitution generally provides that no lottery, sale of lottery tickets, bookmaking, pool selling or other form of gambling is permitted within the state. NY Const. art. I, § 9. However, state operated lotteries and the sale of tickets in connection therewith may be authorized by the legislature provided the net proceeds are exclusively applied to the support of education in the state. Id. Another exception is also provided for pari-mutuel betting on horse races, as prescribed by the legislature, provided a reasonable portion of the revenue is utilized for support of government. Id.

New York’s constitution also provides that any city, town or village within the state may permit the conduct of certain games of chance provided there is a vote in approval by the majority of qualified electors in the given municipality. Id. The games of chance that may be permitted under this article of the constitution include bingo or lotto and games where prizes are awarded on the basis of a winning number, color or symbol determined by chance among those selected. Id. If games are authorized by this section then they are subject to the following provisions, and any additional provisions prescribed by the legislature:

• Games may only be conducted by bona fide religious, charitable or non-profit organizations of veterans or volunteer firefighters, and similar non-profit organizations;
• Net proceeds of any game must be devoted, exclusively, to the purpose of the organization;
• Only bona fide members of the organization are permitted to participate in the operation of the game; and
• Members participating in the operation of the game cannot receive compensation. Id.

Except as “otherwise provided by law, no single prize shall exceed two hundred fifty dollars, nor shall any series of prizes on one occasion aggregate more than one thousand dollars.” Id. The municipality permitting this gaming does not have the power to pass local laws or ordinances relating to the laws; the municipality merely has the power to permit, by vote, the occurrence of the games. Id.

2. Pari-Mutuel Wagering

Pari-Mutuel wagering is governed by the New York state racing and wagering board. N.Y. Rac. Pari-Mut. Wag. & Breed. § 101 (Consol. 2006). The racing and wagering board has power and authority “over all horse racing activities and all pari-mutuel betting activities, both on-track and off-track, in the state and over the corporations, associations and persons engaged therein.” Id. Before the enactment of section 101, the powers to govern the functions of racing and wagering were spread out amongst the state racing commission, state harness racing commission, state quarter horse racing commission, and state off-track pari-mutuel betting commission. Id. However, with the enactment of this section all powers were transfers to the racing and wagering board and the other commissions continued to the extent set forth in section 103 of this article. Id.

Board members, representatives, officers, counsel or agents cannot wager on the “outcome of any horse race conducted at a track at which pari-mutuel betting is conducted by any licensee or franchisee of the board.” N.Y. Rac. Pari-Mut. Wag. & Breed. § 104 (Consol. 2006). An individual employed by an off-tracking betting establishment cannot place wagers on any horse races during the duration of the individual’s employment as a clerk, cashier or seller at the off-track better facility. Id. Individuals under the age of eighteen may not be permitted to wager on horse races either at a licensed race track enclosure or at an off-track betting corporation. Id. New York state authorizes courtier betting on horse races. The section governing courier betting states “the board shall promulgate rules and regulations governing the conduct of employees . . . in placing wagers and collection of winnings on behalf of patrons within designated on-premises areas of such on-track or off-track wagering facility.” N.Y. Rac. Pari-Mut. Wag. & Breed. § 104-a (Consol. 2006). A licensee authorized to accept pari-mutuel wagers under this article is not permitted, under any circumstances, to extend credit for any wager. N.Y. Rac. Pari-Mut. Wag. & Breed. § 104-b (Consol. 2006).

2a. Thoroughbred Racing and Breeding

At the time of making application to the board for a license to conduct horse races or steeplechases, the applicant may also apply for a license to permit pari-mutuel wagering on the races that the applicant will be conducting. N.Y. Rac. Pari-Mut. Wag. & Breed. § 223 (Consol. 2006). Application for a license to conduct pari-mutuel wagering may also be made to the board at any time after licensing for horse racing or steeplechase racing has been obtained. Id.

The holder of a license to conduct pari-mutuel wagering must provide a place or places within the race track enclosure where wagers and bets may be placed. N.Y. Rac. Pari-Mut. Wag. & Breed. § 226 (Consol. 2006). Automatic or hand-operated machinery must be available in the designated location for the display of sales, results of races and amount of money in each pool. Id. The information that these machines must provide to the public can be modified as the board requires in order to keep wagering participants properly informed. Id. The machines installed do not need to be a particular brand; however, they must be approved by the board and state tax commission prior to installation. Id.

Wagering or horse racing is considered to be a public nuisance and any racing conducted not in accordance with this article will qualify as such a nuisance. N.Y. Rac. Pari-Mut. Wag. & Breed. § 216 (Consol. 2006). Unlawful wagering on horse races is punishable as a misdemeanor with imprisonment not to exceed one year. Id.

A minimum of eighty-five percent of the employees of the holder of a license to conduct race meets must be citizens of the United States and residents of New York for at least two years preceding employment. N.Y. Rac. Pari-Mut. Wag. & Breed. § 242 (Consol. 2006). Applicants for employment must present a duly verified affidavit stating that the residency requirements of this section are satisfied. Id.

2b. Harness Racing and Breeding

The type of horse racing authorized pursuant to his article is harness racing which requires that “the horses participating [in races] are harnessed to a sulky, carriage, or similar vehicle, and shall not include any form of horse racing in which the horses participating are mounted by a jockey.” N.Y. Rac. Pari-Mut. Wag. & Breed. § 301 (Consol. 2006). The state racing and wagering commission has jurisdictional power over all harness racing conducted in the state with pari-mutuel wagering. Id. Racing under this article is subject to the control of the state racing and wagering board and rules regulating pari-mutuel betting must be in accord “with the provisions of sections two hundred twenty-two through seven hundred five of this chapter.” Id. This article permits the placement of the type of wager knowing as a super exotic bet. Id. A super exotic bet or wager is characterized as “a single bet or wager on six or more horses, evidence by a single ticket . . . .” Id.

Licensing to conduct pari-mutuel wagering on harness racing shall not be given to more than eight corporations or associations by the board in a single year. N.Y. Rac. Pari-Mut. Wag. & Breed. § 305 (Consol. 2006).

The holder of a license to conduct pari-mutuel wagering on harness races must provide a place or places on the race grounds for the conduct of the pari-mutuel wagering system. N.Y. Rac. Pari-Mut. Wag. & Breed. § 313 (Consol. 2006). The licensee must have on display in the designated wagering locations a sign that indicates

[T]he straight odds on each horse in any race; the total amount wager upon each horse in each pool; the value of a two dollar winning mutuel ticket, straight, place or show on the first three horses in any race; the elapsed time of the race; [and] the value of a two dollar winning daily double ticket. Id.

Also, any other information that may be pertinent or necessary to guide the public must be posted. Id. Equipment and machines used for the pari-mutuel wagering must be approved by the board and the state tax commission before being installed. Id.

County, town and agricultural fairs are not permitted to conduct pari-mutuel wagering on harness races. N.Y. Rac. Pari-Mut. Wag. & Breed. § 325 (Consol. 2006). This includes a prohibition on lottery, pool-selling, bookmaking and any other form of gambling on the outcome of harness races that are conducted at a fair. Id. Entities conducting racing without a license for pari-mutuel wagering must conspicuously post signs on the race grounds indicating that all forms of gambling on the outcome of the harness race is strictly prohibited. Id.

2c. Quarter Horse Racing and Breeding

Pari-mutuel betting on quarter horse races is authorized in New York; however, “[n]o more than five corporations or associations shall be licensed by the state racing and wagering board in any one year to conduct a pari-mutuel meet or meets.” N.Y. Rac. Pari-Mut. Wag. & Breed. § 405 (Consol. 2006). Racing under this article is subject to the control of the state racing and wagering board and rules regulating pari-mutuel betting must be in accord “with the provisions of sections two hundred twenty-two through seven hundred five of this chapter.” Id. Quarter horse racing is “construed to mean only horse racing in which the horses participating are mounted by a jockey and are registered by the American Quarter Horse Association.” N.Y. Rac. Pari-Mut. Wag. & Breed. § 429 (Consol. 2006).

The holder of a license to conduct pari-mutuel wagering on harness races must provide a place or places on the race grounds for the conduct of the pari-mutuel wagering system. N.Y. Rac. Pari-Mut. Wag. & Breed. § 413 (Consol. 2006). The licensee must have on display in the designated wagering locations a sign that indicates

[T]he straight odds on each horse in any race; the total amount wager upon each horse in each pool; the value of a two dollar winning mutuel ticket, straight, place or show on the first three horses in any race; the elapsed time of the race; [and] the value of a two dollar winning daily double ticket. Id.

Also, any other information that may be pertinent or necessary to guide the public must be posted. Id. Equipment and machines used for the pari-mutuel wagering must be approved by the board and the state tax commission before being installed. Id.

County, town and agricultural fairs are not permitted to conduct pari-mutuel wagering on quarter horse races. N.Y. Rac. Pari-Mut. Wag. & Breed. § 423 (Consol. 2006). This includes a prohibition on lottery, pool-selling, bookmaking and any other form of gambling on the outcome of quarter horse races that are conducted at a fair. Id. Entities conducting racing without a license for pari-mutuel wagering must conspicuously post signs on the race grounds indicating that all forms of gambling on the outcome of the quarter horse race is strictly prohibited. Id.

2d. Regional Off-Track Betting Corporations

Pursuant to article V of New York’s Racing, Pari-Mutuel Wagering and Breeding law, regional off-track betting corporations are established and governed by this article. N.Y. Rac. Pari-Mut. Wag. & Breed. § 502 (Consol. 2006). This article specifically excludes a New York City off-track betting corporation because it is governed separately under article VI of this chapter. Id. “Each regional corporation shall be a body corporate and politic constituting a public benefit corporation.” Id. A board of directors must be established for the corporation, and there must be representation on the board of two members for each participating county containing a city with a population in excess of one hundred thousand. Id. For county’s not containing a city with a population over one hundred thousand there will be one board member. Id.

Off-track betting is permissible in New York pursuant to article one section 8 of the state constitution. N.Y. Rac. Pari-Mut. Wag. & Breed. § 518 (Consol. 2006). Off-track betting must be regulated and administered by the state racing and wagering board. Id. Off-track betting is authorized with the intention of curbing unlawful wagering on horse races and to have the revenue put towards the support of government. Id. Furthermore, by providing the board with the power to regulate off-track betting it is anticipated that wagering on horse races will be “conducted in a manner compatible with the well-being of the horse racing and breeding industries in this state . . . .” Id.

Off-track betting is subject to some general provisions and limitations. Following are a few of the provisions that off-track betting facilities are subject to. The conduct of off-track betting must be combined with on-track wagers for a particular race as to cause one common pool for all wagering participants. N.Y. Rac. Pari-Mut. Wag. & Breed. § 523 (Consol. 2006). By combining both on and off track wagers the calculation of odds and payouts from the pool will be them same regardless of where the wager was placed. Id. There are certain types of wagers, such as exotic wagers, that may be placed at an off-track facility regardless of whether a comparable wager may be place on-track. Id. Off-track facilities may be approved, by the board, to conduct pools for races run outside of New York. Id. All regional off-track betting corporations are authorized to accept wagers for the following races: Belmont Stakes, Travers Stakes, Breeders Cup Series and the New York Derby. Id.

2e. New York City Off-Track Betting Corporation

The New York City Off-Track Betting Corporation is operated as a public benefit corporation, “in according with the provision of the New York state off-track pari-mutuel betting law . . . .” N.Y. Rac. Pari-Mut. Wag. & Breed. § 601 (Consol. 2006).

2f. Simulcast of Horse Races

New York State permits racing and pari-mutuel wagering because the state legislature has determined that it is “an important sector of the agricultural economy of this state, [and] provides substantial revenue for state and local governments, and employs . . . state residents” N.Y. Rac. Pari-Mut. Wag. & Breed. § 1000 (Consol. 2006). Furthermore, the legislature has determined that the simulcasting of horse races upon which pari-mutuel wagering is permitted will serve to strengthen the economic goals of the state’s racing and wagering system. Id. Simulcasting of horse races has been authorized on an experimental basis to ensure that it does contribute to the growth of this sector. Id. Simulcast means the “telecast of live audio and visual signals of running, harness or quarter horse races conduct in the state for the purposes of pari-mutuel wagering.” N.Y. Rac. Pari-Mut. Wag. & Breed. § 1001 (Consol. 2006). Only certain regions of the state are authorized to conduct simulcast racing. These “simulcast districts” are broken down as follows: District 1 includes New York City, Suffolk, Nassau, and Westchester counties; District 2 includes Sullivan county; District 3 includes Saratoga county; District 4 includes Oneida county; District 5 includes Erie, Genesee and Ontario counties. Id.

A licensee for the conduct of on or off-track wagering must make application to the board for a license to display the simulcast of horse racings on which pari-mutuel wagering is permitted. N.Y. Rac. Pari-Mut. Wag. & Breed. § 1003 (Consol. 2006). “No license shall be issued by the board authorizing the simulcast transmission of thoroughbred races from a track located in Suffolk county.” Id. Simulcasting of races into individual or group residences in connection with pari-mutuel wagering is not permissible. Id. However, pari-mutuel wagering may be simulcast into residences or homes when in conjunction with an off-track betting corporation that is authorized to conduct wagering on the race. Id.

3. Bingo

Under New York’s general municipal law there is an article governing the local option for conduct of bingo by certain organizations. This article is commonly known as New York’s bingo licensing law. N.Y. Gen. Mun. Law § 475 (Consol. 2006). This article was established by the legislature in order to eradicate exploitation of this form of gambling and to permit the licensing, regulation and supervision of the game for the promotion and benefit of charitable, educational, scientific, health, religious, civic and patriotic causes. Id. This article is designed to ensure that the net proceeds from bingo gaming is applied to worthy causes. Id.

The option to permit bingo gaming in a locality is within the power of the municipality. N.Y. Gen. Mun. Law § 477 (Consol. 2006). The municipality is granted the power to authorize qualified organizations within the municipality’s territorial boundaries. Id. Although the municipality is granted the power to govern the conduct of bingo games, the article provides some restrictions that must be followed regardless of whether it is provided in the local law or ordinance authorizing the bingo gaming. N.Y. Gen. Mun. Law § 479 (Consol. 2006). In other words, the following restrictions are representative of a floor; the municipality has the authority to establish rules and guidelines that are stricter then the restrictions created by this article. Id. The restrictions set forth by this article are: only the holder of a license to conduct bingo gaming under this article may conduct bingo; bingo games are not to be conducted on leased premises where a portion of the payment of the lease is derived from the profits of the operation of the bingo game; a licensee may not receive bingo game equipment or paraphernalia from anyone other then a licensed supplier under the bingo control law; the net proceeds of the bingo game must be allocated to the lawful purposes of the organization that conducted the game; no prize can exceed a value of one thousand dollars in any single bingo game; a series of prizes, in a bingo occasion, cannot exceed more than three thousand dollars; only members of the organization may participate in the operation of the game; members may not receive compensation for their participation in the operation of the game; violation of this article or the local ordinance governing the conduct of bingo is a misdemeanor; the holder of a supplier’s license or their agent cannot participate in the conduct of bingo; and “[l]imited period bingo shall be conducted in accordance with the provisions of this article and the rules and regulations of the commission.” Id.

Unless the local law or ordinance of the municipality where the bingo game is to be conducted provides otherwise, a licensee may not conduct bingo gaming on Sunday. N.Y. Gen. Mun. Law § 485 (Consol. 2006). Persons under the age of eighteen are not permitted to participate in the operation of a bingo game. N.Y. Gen. Mun. Law § 486 (Consol. 2006). Also, persons under the age of eighteen are not permitted to play in bingo games unless they are accompanied by an adult. Id.

The frequency of bingo games conducted pursuant to a license is limited to no more than eighteen days in a consecutive three month period. N.Y. Gen. Mun. Law § 487 (Consol. 2006). Limited period bingo licensees are not permitted to conduct this form of bingo between midnight and noon, “and no more than sixty games may be conducted on any single occasion . . . .” Id. Alcoholic beverages may not be sold, served or consumed in the same area or room as a bingo game that is in progress. Id.

Admission charges for the conduct of bingo games, except for limited period bingo, may not exceed five dollars. N.Y. Gen. Mun. Law § 489 (Consol. 2006). No admission fee can be charged for limited period bingo and an opportunity to participate in a single limited period bingo game may not exceed twenty-five cents. Id. Also, participates of limited period bingo may not purchase more than five opportunities to participate in any game. Id.

“A licensee may advertise the conduct of an occasion of bingo to the general public by means of newspaper, radio, circular, handbill and poster, and by one sign not exceeding sixty square feet in area . . . .” N.Y. Gen. Mun. Law § 490 (Consol. 2006). The contents of the sign are limited to a description of the bingo event, name of the hosting licensed authorized organization, license number of the organization, and location and time of the bingo event. Id. In order to be authorized, advertisement of a bingo event must be in strict accordance with the statutory provision delineating the guidelines of advertising. 1963 N.Y. Op. Att'y Gen. 41.

4. Games of Chance Licensing Law

Under New York’s general municipal law there is an article governing the local option for conduct of games of chance by certain organizations. This article is commonly known as New York’s games of chance licensing law. N.Y. Gen. Mun. Law § 185 (Consol. 2006). The legislature found that the raising of funds, by charitable, educational, religious and similar causes through games of chance is in the public interest. Id. “[P]rior to the enactment of this article, games of chance were the subject of exploitation by professional gamblers, promoters, and commercial interest.” Id. This article is designed with the intention to ensure that the net proceeds of games of chance are applied to worth causes as specified in the article. Id.

The games of chance that are permitted under this article includes: merchandize wheels; coin boards; merchandize boards; seal cards; raffles; and bell jars. N.Y. Gen. Mun. Law § 186 (Consol. 2006). Other games may be specifically authorized by the board, provided prizes “are awarded on the basis of a designated winning number . . . color or . . . symbol . . . determined by chance . . . .” Id. This does not include the games are bingo or lotto that are governed by article 14-H of this chapter. Id. Games of chance, under this article, do not “involve wagering of money by one player against another player.” Id. An Attorney’s general opinion determined that bell jar tickets dispensed via a vending machine is not permitted by this article. 1990 N.Y. Op. Att'y Gen. 5.

Similar to the local option for the conduct of bingo, the option to permit games of chance in a locality is within the power of the municipality. N.Y. Gen. Mun. Law § 187 (Consol. 2006). The municipality is granted the power to authorize qualified organizations, within the municipality’s territorial boundaries, to conduct games of chance. Id. Although the municipality has the power to authorized and govern the conduct of games of chance, this article provides certain restrictions on the conduct. Regardless of how the local law governs the games of chance the following restrictions must be followed: only a licensee under this article may conduct games of chance or make available premises for the conduct of games of chance; games may not be conducted on premises where any portion of the rent or lease is to be paid with profits derived from the conduct of the games; licensee may only purchase supplies and equipment for the games from suppliers licensed by the board or from another licensed organization; all net proceeds from the game of chance must be devoted to the lawful purposes of the organization; a single prize may not exceed the sum or value of three hundred dollars, merchandise wheels cannot award prizes valued at greater then two hundred fifty dollars, and a single raffle prize cannot exceed fifty thousand dollars in sum or value; a series of prizes cannot exceed an aggregate value of ten thousand dollars during the operation of a merchandise wheel, and three thousand dollars for the operation of a bell jar, coin board or merchandise board, series of prizes awarded by raffle cannot have an aggregate value greater than one hundred thousand dollars; during any one license period no more than five single types of games of chance can be conducted; there is not limit imposed on the number of prizes that a single participant may win during a gaming occasion; only members of the licensed organization may participate in the operation and management of games; members may not receive compensation for their assistance of the operation of the game; credit may not be extended to a person interested in participating in a game of chance; games of chance must be conducted on the premises of the authorized organization or authorized lessor; licensed supplier of games of chance may not participate in the operation of the games; the unauthorized conduct of games of chance is a misdemeanor; and coins from or merchandise board are not redeemable for cash. N.Y. Gen. Mun. Law § 189 (Consol. 2006).

A supplier, distributor or manufacturer of gaming supplies and equipment must be licensed by the board pursuant to this article. N.Y. Gen. Mun. Law § 189-a (Consol. 2006). Qualified organization must also apply for a license from the board in order to properly conduct games of chance. See N.Y. Gen. Mun. Law § 190 (Consol. 2006). However, an authorized organization that conducts a raffle with net proceeds less than five thousand dollars need not apply for a license, provided the net proceeds from raffles of the organization in a year do not exceed twenty thousand dollars. N.Y. Gen. Mun. Law § 190-a (Consol. 2006).

Games of chance may not be conducted on Sunday, unless the license provides otherwise pursuant to local law or ordinance. N.Y. Gen. Mun. Law § 195 (Consol. 2006). Persons under the age of eighteen are not permitted to play in any game of chance. N.Y. Gen. Mun. Law § 195-a (Consol. 2006). However, persons under the age of eighteen may be permitted to be in attendance at games of chance at the discretion of the licensee. Id. Also, persons under the age of eighteen are not permitted to partake on the operation of games of chance. Id.

Games of chance are limited in frequency to no more than twelve times per calendar year. N.Y. Gen. Mun. Law § 195-b (Consol. 2006). The same premises cannot be used to conduct games of chance more than twenty-four times in one calendar year. Id. Game times are limited to Monday through Thursday between noon and midnight, on Friday from noon to two A.M., and on Saturday from noon to two A.M. Id. When the games of chance being conducted are bell jar or a raffle then the above restrictions are inapplicable. Id.

“A licensee may advertise the conduct of games of chance to the general public by means of newspaper, circular, handbill and poster, and by one sign not exceeding sixty square feet in area . . . .” N.Y. Gen. Mun. Law § 195-e (Consol. 2006). All advertising must be limited in description to include only the following: description of the event as “Games of chance” or “Las Vegas Night”; name of the hosting authorized organization; license number of the authorized organization; and the date, location and time of the event. Id.

5. State Lottery

The law governing New York’s state lottery is called the “New York state lottery for education law.” N.Y. Exec. Law § 1600 (Consol. 2006). New York state has authorized the following types of lottery games: jackpot games such as New York’s Mega Millions and New York lotto; daily games including Win 4 and Quick Draw; and $1, $2, $5, $10 and $20 instant scratch off tickets. See New York Lottery, http://www.nylottery.org/index.php.

7. Specific Internet Prohibition

   Although New York does not have statutory law specifically governing internet gambling case law indicates that internet gambling activity is prohibited within the state. In People v. World Interactive Gaming Corp., a foreign corporation, dealing in gambling transactions, was held to have engaged in significant business activities within New York causing them to be subject to the laws of the state. 714 N.Y.S.2d 844 (N.Y. Sup. Ct. 1999). New York’s constitution provides that unless specifically authorized by statute, all forms of gambling are prohibited, therefore internet gambling is illegal in the state. Id. at 846. Regardless of where the corporation conducting the gambling is located, “[t]he act of entering the bet and transmitting the information from New York via the Internet is adequate to constitute gambling activity within New York State.” Id. at 850.

8. Penalties for Unlawful Gambling/Gaming Crimes

1. Bucket Shop Violations

The following activities conducted by a person, copartnership, firm, association, or corporation, acting as an individual or as a representative, will result in a felony conviction. N.Y. Gen. Bus. Law § 351 (Consol. 2006).

• “Make or offer to make, or assist in making or offering to make any contract respecting the purchase or sale, either upon credit or margin, of any securities or commodities . . .” Id. This includes all evidence, bought and sold with the intention that the contract is terminated on the “basis of the public market quotations of or prices made on any board of trade or exchange or market upon which such commodities or securities are dealt in . . .” Id. Furthermore, there is no intention for a bona fide purchase of sale of the item at hand. Id.
• “Make or offer to make, or assist in making or offering to make any contract respecting the purchase or sale, either upon credit or margin, of any such securities or commodities . . . .” Id. Such contract is terminated when the market quotes or prices for the securities, named in the contract, reach a certain figure. Id. There is no intention for a bona fide purchase or sale. Id.
• “Make or offer to make, or assist in making or offering to make any contract respecting the purchase or sale, either upon credit or margin, of any such securities or commodities . . . .” Id. In making this contract is done without any intention of receipt or delivery of the securities or commodities. Id. Instead, settlement of the contract is “based upon the difference in such public market quotations of or such prices at which said securities or commodities are, or are asserted to be, bought or sold . . .” Id.

A person involved in any aspect of the maintenance of a bucket shop is guilty of a felony. Id. Also, any person or entity “exhibiting or displaying in any manner any statement of quotations of prices of any such securities or commodities with an intent to make or offer to make or to assist in making or offering to many any contract prohibited by this article shall be guilty of a felony . . . .” Id.

2. Promoting Gambling in the Second Degree

Second degree promotion of gambling is a class A misdemeanor. N.Y. Penal Law § 225.05 (Consol. 2006). A person is guilty of this crime “when he knowingly advances or profits from unlawful gambling activity.” Id.

3. Promoting Gambling in the First Degree

“Promoting gambling in the first degree is a class E felony.” N.Y. Penal Law § 225.10 (Consol. 2006). Knowingly profiting from or advancing unlawful activity by engaging in bookmaking qualifies as first degree promotion of gambling. Id. However, the person engaging in bookmaking receives no more than five bets in one day “totaling more than five thousand dollars.” Id. A person may also be found guilty of first degree promotion of gambling in connection with a lottery or policy scheme in one of two ways. Id. First, if a person receives money or written records from a non-player who chances are represented by that money. Id. Second, a person receives more than five hundred dollars in one day in connection with the lottery scheme. Id.

4. Possession of Gambling Records in the Second Degree

“Possession of gambling records in the second degree is a class A misdemeanor.” N.Y. Penal Law § 225.15 (Consol. 2006). In order to be found guilty of second degree possession of gambling records a person must possess, with knowledge of the contents of the records, the following types of writing, paper, instrument or article:

• Those commonly used in the operation or promotion of bookmaking; or
• Those commonly used in the promotion, operation or play of a lottery or policy scheme. However, a defense under this provision is that the record only reflected chances of the defendant himself, not in excess of ten; or
• Paper product in sheet form that has explosive characteristics due to chemical conversion to nitrocellulose; or
• Water soluble paper, or derivative thereof, in sheet form. Id.

5. Possession of Gambling Records in the First Degree

“Possession of gambling records in the first degree is a class E felony.” N.Y. Penal Law § 225.20 (Consol. 2006). Conviction of first degree possession of gambling records, requires possession, with knowledge of the contents of the records, of the following types of writing, paper, instrument or article:

• Those commonly used in the operation or promotion of bookmaking and that reflect more than five bets with a total in excess of five thousand dollars; or
• Those “commonly used in the operation, promotion or playing of a lottery or policy scheme of enterprise, and constituting, reflect or representing more than five hundred plays or chances therein.” Id.

6. Possession of a Gambling Device

“Possession of a gambling device is a class A misdemeanor.” N.Y. Penal Law § 225.30 (Consol. 2006). It is unlawful to posses, manufacture, sell, transport or negotiate a transaction for slot machines, any gambling device used for the advancement of unlawful gambling activity, and coin operated gambling devices intended for advancement of unlawful gambling activity. Id. The element of knowledge of the character of the device itself is necessary for conviction of possession of a gambling device. Id. Exceptions to this crime are possession of a slot machine under a gaming compact pursuant to the Indian Gaming Regulatory Act and possession or transportation of a slot machine to facilitate training of the repair of a machine that is to be used pursuant to a tribal-state gaming compact. Id.

7. Gambling & Agricultural Societies

Under New York’s Agriculture and Markets law it is unlawful to have a gambling device or instrument that permits bets or wagers to be made, on the grounds ‘during the annual meeting, fair or exposition of any county agricultural society or town or other agricultural society . . . .” N.Y. Agric. & Mkts. Law § 288 (Consol. 2006). The prohibited devices also include wheel of fortunate and games of chance. Id. The state police are charged with the duty of enforcement this prohibition on gambling. Id. This provision does not in any way effect authorized horse racing or raffles as found in the general municipal law. Id.

9. Statute of Anne/Recovery of Debts

Title 4, of the General Obligations Law of New York, provides the law governing contracts relating to wagering. This includes forfeiture of property and ones ability to recover property or money lost.

1. Illegal wagers, bets and stakes:

Under New York’s law governing contracts “[a]ll wagers, bets or stakes, made to depend upon any race, or upon any gaming by lot or chance, or upon any lot, chance, casualty, or unknown or contingent event whatever, shall be unlawful.” N.Y. Gen. Oblig. Law § 5-401 (Consol. 2006).

2. Wagering Contracts Void:

   Contracts as described in section 5-401 (above) or contracts for money or property based on a wager, bet or stakes are void. N.Y. Gen. Oblig. Law § 5-411 (Consol. 2006).

3. Securities for money lost at gaming are void

   A security of any nature, including actions, judgments, mortgages and conveyances, where any portion of the consideration is for something of value won by playing a game, betting, or to repay for money knowingly lent for the purpose of gambling is void. N.Y. Gen. Oblig. Law § 5-413 (Consol. 2006).

4. Transfers of property in pursuance of a lottery

   The transfer of property, by grant, bargain, sale or conveyance that is made in pursuance of a lottery is void and of no effect. N.Y. Gen. Oblig. Law § 5-415 (Consol. 2006). Property subject to this provision includes real estate, goods, chattels, things in action and any personal property. Id. Made in pursuance of a lottery includes the action of aiding or assisting a lottery, game or device that is determined by chance. Id. A formal Attorney’s general opinion states that it is “unlawful in the State of New York to raffle off a piece of real estate.” 1981 N.Y. Op. Att'y Gen. 82. This opinion serves to prohibit both an individual and a charitable or nonprofit organization from conducted such an event. Id.

5. Contracts on account of raffling

   All securities, contracts and agreements that are executed on account of any raffle as consideration for a chance in the raffle are void. N.Y. Gen. Oblig. Law § 5-417 (Consol. 2006).

6. Recovery of Property Staked

   Any person who pays, delivers or deposits something of value as a wager on the outcome of a prohibited gambling event may sue for and recover as against the winner and the stakeholder. N.Y. Gen. Oblig. Law § 5-419 (Consol. 2006). The stakeholder is the person who holds the wager or bet until the outcome of the event is determined. Id.

7. Losers of money or value may recover in certain situations

   A person may sue and recover money or value lost, paid and delivered to the winner. N.Y. Gen. Oblig. Law § 5-421 (Consol. 2006). The sum of money or value lost must be twenty-five dollars or greater. Id. Furthermore, the person suing for recovery may have been actually participating in the game or betting on the participants in the game. Id.

8. Recovery of money paid for lottery tickets

   Any person who purchases a ticket share or interest in a lottery “may sue for and recover double the sum of money, and double the value of goods or things in action, which he may have paid or delivered in consideration of such purchase, with double costs of suit.” N.Y. Gen. Oblig. Law § 5-423 (Consol. 2006). A person who participates in a lottery prohibited by New York penal law may also sue for and recover the money or value paid for a chance in the lottery. Id. Recover may be had from the person to whom the consideration was delivered. Id.