By Bennett Liebman Government Lawyer in Residence Government Law Center Albany Law School
New York State's constitutional provision on gambling has often been an object of both confusion and consternation. The gambling provision is located within Article 1, § 9 of the Constitution, which also provides for the right of assembly, the right to petition the government, and the procedures for divorce. In 1894, the provision was amended to ban all gambling, but by now, it authorizes State lotteries, pari-mutuel wagering on horse racing, bingo and games of chance principally for charitable and religious organizations, and seven casinos. Today, the exceptions to the ban have eviscerated the effect of the overall ban.
Additionally, the Court of Appeals has decided that the games of chance exception allowed Indian tribes to have casinos. It also decided that video lottery terminals, which mirror slot machines, are valid as State lotteries.
Finally, the Constitutional provision has been involved in significant controversies in 2020. There is an ongoing dispute over whether it allows sports wagering at the casinos conducted through the Internet, and the Appellate Division, Third Department, ruled last month in White v. Cuomo that fantasy sports wagering was unconstitutional. If there ever was a time to amend the Constitutional gambling provision, it is now.
What follows is a draft of a possible Constitutional amendment clarifying what forms of gambling would be permissible and how the legislature might go about authorizing further forms of gambling. It is modeled in part on Article IV, §VII of the New Jersey Constitution. The New Jersey provision grandfathers in previously authorized forms of gambling, but requires a public referendum (not a Constitutional amendment) for gambling expansion. Accordingly, this draft provision maintains a public vote before a specific additional form of gambling can be authorized. No vote is required if the legislature is simply changing the restrictions and control over gambling. Thus, a referendum would be required if the legislature tried to legalize esports gambling or pari-mutuel jai alai. It would not require a vote if the legislature simply wished to allow Internet or telephone wagering on raffles.
Below is the draft provision with a short explanation of its provisions:
Art 1, § 9. 1. No law shall be passed abridging the rights of the people peaceably to assemble and to petition the government, or any department thereof; nor shall any divorce be granted otherwise than by due judicial proceeding. 2. No gambling of any kind shall be authorized by the Legislature unless the specific kind of gambling has been authorized by a majority of the votes cast thereon by the legally qualified voters of the State voting at a general election, except that, without any such authorization: a. It shall be lawful for the legislature to authorize lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, b. It shall be lawful for the legislature to authorize pari-mutuel betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government, c. It shall be lawful for the legislature to authorize casino gambling at no more than seven facilities as authorized and prescribed by the legislature. d. It shall be lawful for the legislature to authorize sports wagering and fantasy sports wagering as the legislature may prescribe. e. It shall be lawful for the legislature to authorize the conduct of one or both of the following categories of games of chance commonly known as: (a) bingo or lotto, in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random; (b) games including raffles in which prizes are awarded on the basis of a winning number or numbers, color or colors, or symbol or symbols determined by chance from among those previously selected or played, whether determined as the result of the spinning of a wheel, a drawing or otherwise by chance. Such games of chance shall only be lawful if authorized by an approving vote of the majority of the qualified electors of any city, town or village submitted at a general or special election. If authorized, such games of chance may only be conducted by bona fide religious, charitable or non-profit organizations of veterans, volunteer firefighter and similar non-profit organizations and the entire net proceeds of any game shall be exclusively devoted to the lawful purposes of such organizations. Nothing in this subsection shall prevent the legislature from passing laws more restrictive than any of the provisions of this subsection.
• Section 1. would separate the right to assembly, the right to petition, and the divorce provisions from the gambling provisions.
• Section 2 establishes the principle that all new specific forms of gambling would need to be approved by the people in a referendum, but would grandfather in existing forms of gambling.
• Subsections a., b., and c. would authorize the State lottery, pari-mutuel wagering on horse racing and the seven private casinos using much of the language in the current Constitution.
• Subsection d. would specifically allow the legislature to authorize sports wagering and fantasy sports. Unlike the current legislative scheme, sports wagering would not be limited to the private casinos. Further, there would be nothing in the Constitution that would prevent the legislature from authorizing remote Internet sports gambling.
• Subsection e. would contain the provisions authorizing what is generally characterized as charitable gambling. Following the existing Constitutional language, bingo and games of chance would be permitted in those municipalities that pass a referendum in support of that form of gambling. The games could only be conducted by the organizations that currently are authorized to run charitable gambling, and the entire net proceeds of any game must be devoted to the lawful purposes of the organization. Certain archaic language in Article 1, § 9.2, which put limitations on prize amounts and place extremely detailed limitations on who can manage the charitable games, are eliminated. When they were enacted decades ago, there was limited competition for charitable wagering. Now these provisions simply make it difficult for charities to compete in a world of lotteries, casinos and the Internet.
The process for amending the Constitution requires passage by two separately elected legislatures. A second legislature will be elected in 2020. If the amendment is given first passage in the 2020 legislative session, it can be repassed in 2021 and voted on by the public at the November 2021 general election. If it is not given first passage by the legislature before August 3, 2020, the earliest it can be amended is November of 2023. Frankly, the time to act on the Constitutional amendment for gambling is now.