New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle T - New York State Gaming Commission › Chapter VI - Interactive Fantasy Sports › Subchapter A - Public Access to Records › Part 5605 - Accounting Controls › Section 5605.6 - Protection of contestant funds

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
Contestant deposits in trust.
(1) Funds deposited by contestants with the
					 SPE of an interactive fantasy sports operator or registrant shall be, by
					 operation of this section, received as assets of a trust for the purposes set
					 forth in this section, not property belonging to such SPE or the operator or
					 registrant. Such deposits shall include, without limitation, any funds provided
					 on a contestant's behalf by a credit card processor and any prize or award won
					 by a contestant in a contest offered by the operator or registrant that is
					 credited to such person's contestant account.
(2) Pursuant to the trust relationship and
					 obligations created by operation of this Part, the funds deposited by each
					 contestant shall be a separate trust and the SPE of the operator or registrant
					 shall be the trustee of each such trust, commencing with deposits on or after
					 the effective date of this section, and shall continue with respect to every
					 asset of the trust until every trust claim arising at any time has been paid or
					 discharged for the purposes of the trust and the trust has been terminated
					 (e.g., by the closing of the contestant account by the contestant) and the
					 trust assets distributed pursuant to this section. Such trust relationship is
					 created by virtue of this section and shall apply regardless of the type of
					 bank account that the SPE uses to hold the funds pursuant to paragraph (3) of
					 this subdivision.
(3) Each SPE of
					 an operator or registrant shall deposit and maintain all of the funds held in
					 trust in an account in a branch of a national or State chartered banking
					 institution.
(4) Funds held in
					 trust shall not be commingled with other funds. The SPE shall not be required
					 to keep in separate bank accounts or deposits the funds of the separate trusts
					 of which such SPE shall be trustee pursuant to this section, so long as the
					 books of account of such SPE for the operator or registrant shall show clearly
					 the allocation to each trust of the deposits in and withdrawals from such
					 account holding the funds held in trust.
(5) The books or records with respect to each
					 trust shall contain entries of trust assets receivable, trust accounts payable,
					 trust funds received and trust payments made with trust assets including
					 without limitation the entry fees paid and prizes or awards won by a contestant
					 in a contest. Such entries shall be sufficient to identify the party, amount,
					 date, bank or depository and other pertinent information for each account
					 entry.
(6) Failure of the SPE, as
					 trustee, to keep the books or records required by this subdivision shall be
					 presumptive evidence that the SPE, as trustee, has applied or consented to the
					 application of funds actually received in trust by the SPE as money or an
					 instrument for the payment of money for purposes other than a purpose of the
					 trust as specified in this section. The SPE may be assisted by the operator or
					 registrant to maintain such records.