§ 4624.9. Method of withdrawal.

[All] With the exception of the transfer of funds to the Commission as may be required by section 4624.3 of this Part, which may be accomplished by approved electronic means pursuant to instructions, directions and procedures that the Commission may establish and modify from time to time, all monies withdrawn from the “special games of chance account,” “special raffle account” or “special bell jar account” shall be only by checks having preprinted consecutive numbers, signed by at least two duly authorized officers of the licensee and made payable to a specific person, firm, partnership or corporation with the purpose specified on the check stub[; and at no time shall a]. No check from any of the accounts described in this section is permitted to be made payable to cash. All checks must be accounted for in the appropriate part of the financial statement of games of chance operations (form GC-7), financial statement of raffle operations (form GC-7R) or financial statement of bell jar operations (form GC-7Q), including voided checks.

Statutory authority: The New York State Gaming Commission is authorized to promulgate these rules pursuant to Racing, Pari-Mutuel Wagering and Breeding Law §§ 104(1), 104(19) and 188-a(1) of the General Municipal Law. Section 104(1) of the Racing, Pari-Mutuel Wagering and Breeding Law (RPMWBL) vests the Commission with general jurisdiction over all gaming activities within New York State and over the corporations, associations and persons engaged therein. Section 104(19) of the RPMWBL authorizes the Commission to promulgate any rules and regulations that it deems necessary to carry out its responsibilities. General Municipal Law § 188-a(1) authorizes the Commission to supervise the administration of games of chance and to adopt, amend and repeal rules and regulations governing the issuance and amendment of licenses and the conducting of games under such licenses.

Legislative objectives: To maintain the public confidence and trust in the credibility and integrity of legalized gaming activities, the conduct of games of chance and all attendant activities should be so regulated and adequate controls so instituted. All phases of the supervision, licensing and regulation of games of chance should be closely controlled and the laws and regulations pertaining thereto should be strictly construed and rigidly enforced.

Needs and benefits: This amendment is necessary to allow charitable organizations to make electronic transfer of funds to pay their additional license fees to the New York State Gaming Commission.

Currently, any disbursement from a special bell jar account by a charitable organization (including payment of license fees to the Commission) can be made only by check having pre-printed consecutive numbers. This method of payment is archaic in light of the development of secure online payment methods.

Charitable organizations licensed to conduct bell jar games are required to submit to the Commission a quarterly report of the sale of bell jar tickets pursuant to 9 NYCRR § 4624.1. Each report must be accompanied by an additional license fee in the amount of five percent of the specific organization’s net proceeds from its sale of bell jar tickets pursuant to 9 NYCRR § 4624.3. This is the only license fee paid to the Commission by organizations licensed to conduct charitable gaming. The Commission’s Division of Charitable Gaming processes approximately 1,500 such reports and accompanying license fees each calendar quarter. Receipt of funds by electronic transfer would improve administrative efficiency for both the Commission and for charitable organizations without sacrificing security or accountability.

Currently, the Commission accepts only checks. Electronic transfers will allow charitable organizations to submit license funds and reduce paperwork for both the organizations and the Commission. Online payment systems automatically generate a record of payments which can be readily accessed if an audit is needed. Like checks, online payment systems ensure accountability for disbursements through access codes and passwords so that only authorized persons may disburse funds. Electronic payment will also reduce the amount of time required for Commission staff to process more than 1,000 payments that are received every quarter.

Costs: (a) There may be some minimal costs imposed through the use of electronic payment, but because electronic payment is optional and not required by this rule, the charitable organization still has the ability to pay by check if the costs of electronic transfer are burdensome. The minimal costs will be offset through savings of no longer requiring envelopes, postage and copy paper as part of each submission.

(b) There are no additional costs imposed upon the Commission, New York State or local governments for the implementation of, and continuing compliance with, this rule. The Commission will see a cost savings of expenses associated with copying checks, filing and processing checks for deposit.

(c) The determination that there are no costs imposed upon any of the parties listed above is based upon a review of the common procedures used by both the Commission and charitable organizations, with which Commission staff is highly familiar as a result of audits and reviews of charitable organization procedures.

(d) Because there are no costs associated with this rulemaking as determined by the limited nature and statutory scope of the amendments, a statement setting forth a best estimate and methodology of costs is not attached.

Paperwork: There is no additional paperwork required by or associated with this rule amendment.

Local government mandates: This rule would impose no local government mandates.

Duplication: There are no other state or federal requirements similar to the provisions contained in the rule amendment.

Alternative approaches: There are no other significant alternatives to this rule. The rule still allows organizations to pay by check.

Federal standards: Charitable gaming within New York State are activities that are exclusively regulated by the Commission, and there are no applicable federal rules for the conduct of such activities. Therefore, the rule does not exceed any minimum standards of the federal government because there are no applicable federal rules.

Compliance schedule: This rulemaking would be effective immediately upon the date of publication in the New York State Register as a Notice of Adoption.

This proposal does not require a Regulatory Flexibility Statement, Rural Area Flexibility Statement or Job Impact Statement as it merely permits the use of a new method for charitable organizations to pay bell jar license fees to the Commission. These proposals do not impact upon “Small business” under State Administrative Procedure Act section 102(8), nor do they affect employment. The proposal will not impose an adverse economic impact on reporting, recordkeeping or other compliance requirements on small businesses in rural or urban areas nor on employment opportunities.