(1) each player position at a slot machine;

(2) each player position at an electronic table game; and

(3) each table game.

* * *

Section 5315.3 of 9 NYCRR would be repealed.

This revised rulemaking proposal does not necessitate a revision to the previously published regulatory impact statement. The revised text changes the definition of gaming position as it relates to table games. The revised text also provides that a fee shall not be imposed on a gaming position that replaces a removed gaming position for which an annual license fee has been paid for the relevant year. These revisions are not inconsistent with the previously published.

This revised rulemaking proposal does not necessitate a revision to the previously published analyses and statement and does not have an adverse effect on small businesses, local governments, jobs or rural areas.

The Commission received timely public comments from two of the licensed commercial casinos in New York, Montreign Operating Company, LLC (“Montreign”), which operates the Resorts World Catskills casino, and Capital Region Gaming, LLC (“Rivers Casino”), which operates the Rivers Casino in Schenectady.

Proposed section 5302.1 provides a definition for “gaming position.” Montreign requested that the definition be modified to exclude positions at a table game that is not an electronic table game. The Commission agrees and revises the proposed text of section 5302.1 accordingly.

Proposed section 5302.2 concerns the annual license fee for machines and tables. Rivers Casino requested adding a subdivision to provide that an additional fee shall not be imposed on a new machine or table if such replaces a removed machine or table for which an annual license fee has already been paid. The Commission agrees that an additional fee should not be imposed if a machine or game is swapped out for another and revises the proposed text of section 5302.2 accordingly.

Proposed section 5302.3 concerns submission of payments. Subdivision (d) would provide for the Commission to set forth the basis for any refund of taxes. Rivers Casino requested adding a requirement that any refund due to a gaming facility licensee be paid within 30 days of such finding. The Commission disagrees with this request. While generally it is anticipated that refunds would be settled through weekly remittance adjustments well within the suggested refund timeframe, unanticipated and unforeseen obstacles may arise that would prevent meeting such a payment schedule.

Proposed section 5302.4 concerns overdue payments. Montreign suggested that application, investigatory and other license fees for individuals and vendors should be borne by such applicants and not the gaming facility. The Commission disagrees with this request. The Commission has made the policy judgment that application, investigatory and other license fees for individuals and vendors should be borne by the gaming facility and not the individual or vendor. Subdivision (c) of proposed section 5302.4 would reserve the right for the Commission to recover attorney fees associated with recovery of funds. Rivers Casino requested adding language to limit responsibility for attorney fees to “outside” attorney fees. Rivers Casino also suggested adding a new subdivision (e) to provide that no fees or penalties for underpayment shall be assessed if the Commission does not provide the gaming facility with a “fee schedule detailing the cost of licensing and registering its vendors and employees.” Montreign also suggested that a fee schedule should be established. The Commission disagrees with thee requests. In the event attorney time is needed to collect overdue payments, it would be appropriate to charge only the gaming facility concerned for staff attorney time or Attorney General fees in such recovery effort, rather than billing staff attorney time to casino regulation generally. No such “fee schedule” exists as is contemplated by the suggested language for a new subdivision (e). The regulatory assessment will include staff cost for all gaming facility regulatory activities, not only licensing cost. The Commission anticipates providing a budget with assumptions for the annual assessment, which will be based on the proposed commercial gaming state appropriation request that the Legislature will authorize annually.

Proposed section 5302.5 concerns regulatory investigative fees and costs. Rivers Casino suggested adding a new subdivision (d) to provide that a gaming facility licensee shall not be assessed any fees or costs for any investigation, consulting or other regulatory functions performed by Commission staff within ordinary business hours and for functions that are performed in their ordinary course of business. Rivers Casino explained that Commission staff time is already to be billed to the gaming facility licensees in proposed section 5302.6. Montreign also suggested that investigation, consulting or other regulatory functions performed by Commission staff within ordinary business hours and for functions that are performed in their ordinary course of business should not be assessed. The Commission disagrees with these requests. The Legislature, in Racing, Pari-Mutuel Wagering and Breeding Law section 1349, has authorized the Commission explicitly to recover investigatory costs from a gaming facility licensee. It is common policy for regulated parties to bear the costs of their regulation. No gaming facility licensee would be billed twice for the same service. Rather, any investigatory costs within the meaning of Racing, Pari-Mutuel Wagering and Breeding Law section 1349 (Regulatory investigative fees) would be billed only to the gaming facility to which the investigation relates, not to the general regulatory assessment of Commission costs.

Proposed section 5302.6 concerns the regulatory cost assessment. Rivers Casino suggested replacing language in subdivision (c) to eliminate reference to Commission discretion to determine a date upon which to measure gaming positions or to determine an average number of gaming positions throughout the year. Rivers Casino suggested adding a right for a gaming facility to audit a regulatory assessment prior to paying it. Rivers Casino suggested eliminating subdivision (d), which provides a mechanism to assess pre-opening regulatory costs. Rivers Casino asserted that the license fee it paid pursuant to Racing Pari-Mutuel Wagering and Breeding Law section 1306(4) and 9 NYCRR section 6001.1(a) was sufficient. The Commission disagrees with these requests. The Commission believes that the regulations need to provide flexibility for the Commission to calculate an average number of gaming positions in the event that gaming floor expansions or machine removals are approved within the fiscal year. Creating an audit right before payment would delay payments beyond the 30-day period required by Racing, Pari-Mutuel Wagering and Breeding Law section 1350(1). Subdivision (d) provides a mechanism to recover regulatory costs incurred prior to the opening of facilities, such as developing and ensuring compliance with gaming regulations. The casino license fee was collected for the privilege of conducting casino gaming and was distributed according to the requirements of State Finance Law section 97-nnnn. The regulatory costs contemplated by subdivision (d) are those not already covered by the $1 million application fee required by Racing, Pari-Mutuel Wagering and Breeding Law section 1316(8), which statute imposed the application fee “to defray the costs associated with the processing of the application and investigation of the applicant.”