Florida Senate - 2021                             CS for SB 16-A
       
       
        
       By the Committee on Appropriations; and Senator Hutson
       
       
       
       
       
       576-00042-21A                                          202116Ac1
    1                        A bill to be entitled                      
    2         An act relating to the Fantasy Sports Contest
    3         Amusement Act; creating s. 546.11, F.S.; providing a
    4         short title; creating s. 546.12, F.S.; providing
    5         legislative findings and intent; creating s. 546.13,
    6         F.S.; defining terms; creating s. 546.14, F.S.;
    7         providing for the enforcement and administration of
    8         the Fantasy Sports Contest Amusement Act; authorizing
    9         the Division of Pari-mutuel Wagering within the
   10         Department of Business and Professional Regulation to
   11         take certain actions; requiring the division to revoke
   12         a contest operator’s license under certain
   13         circumstances; authorizing the division to adopt
   14         rules; creating s. 546.15, F.S.; providing application
   15         requirements for fantasy sports contest operator
   16         licenses; providing that specified persons or entities
   17         are not eligible for licensure under certain
   18         circumstances; defining the term “convicted”;
   19         specifying that a contest operator license is
   20         automatically suspended under certain circumstances;
   21         providing an exception; creating s. 546.16, F.S.;
   22         requiring a contest operator to implement specified
   23         consumer protection procedures under certain
   24         circumstances; defining the term “relative”; requiring
   25         a contest operator to annually contract with a third
   26         party to perform an independent audit; requiring a
   27         contest operator to submit the audit results to the
   28         division within a certain timeframe; requiring a
   29         contest operator to use data sources that meet
   30         specified requirements; creating s. 546.17, F.S.;
   31         requiring contest operators to keep and maintain
   32         certain records for a specified period; providing a
   33         requirement for such records; requiring that such
   34         records be available for audit and inspection;
   35         requiring the division to adopt rules; creating s.
   36         546.18, F.S.; providing a civil penalty; providing
   37         applicability; exempting fantasy contests from certain
   38         provisions in ch. 849, F.S.; amending s. 16.71, F.S.;
   39         prohibiting the Governor from soliciting or requesting
   40         certain information from a person with a license to
   41         conduct fantasy sports contests; amending s. 16.712,
   42         F.S.; conforming provisions to changes made by the
   43         act; amending s. 16.713, F.S.; revising prohibitions
   44         relating to appointment to and employment with the
   45         division to include prohibitions relating to fantasy
   46         sports contest licenses; amending s. 16.715, F.S.;
   47         revising prohibitions relating to former commissioners
   48         and employees of the commission to include
   49         prohibitions relating to fantasy sports contest
   50         licenses; creating s. 849.144, F.S.; specifying that
   51         certain activities relating to fantasy sports contests
   52         are not subject to certain gambling-related
   53         prohibitions; amending SB 4A to include the regulation
   54         of fantasy sports contests in a type two transfer
   55         occurring on a certain date; providing a contingent
   56         effective date.
   57          
   58  Be It Enacted by the Legislature of the State of Florida:
   59  
   60         Section 1. Section 546.11, Florida Statutes, is created to
   61  read:
   62         546.11 Short title.—Sections 546.11-546.18 may be cited as
   63  the “Fantasy Sports Contest Amusement Act.”
   64         Section 2. Section 546.12, Florida Statutes, is created to
   65  read:
   66         546.12 Legislative intent; findings.—It is the intent of
   67  the Legislature to ensure public confidence in the integrity of
   68  fantasy sports contests and contest operators. This act is
   69  designed to regulate the contest operators and individuals who
   70  participate in such contests and to enact consumer protections
   71  related to fantasy sports contests. Furthermore, the Legislature
   72  finds that fantasy sports contests, as that term is defined in
   73  s. 546.13, involve the skill of contest participants.
   74         Section 3. Section 546.13, Florida Statutes, is created to
   75  read:
   76         546.13 Definitions.—As used in ss. 546.11-546.18, the term:
   77         (1) “Act” means ss. 546.11-546.18.
   78         (2) “Confidential information” means information related to
   79  the playing of fantasy sports contests by contest participants
   80  which is obtained solely as a result of a person’s employment
   81  with, or work as an agent of, a contest operator.
   82         (3) “Contest operator” means a person or entity that offers
   83  fantasy sports contests for a cash prize to members of the
   84  public, but does not include a noncommercial contest operator in
   85  this state.
   86         (4) “Contest participant” means a person who pays an entry
   87  fee for the ability to participate in a fantasy or simulation
   88  sports game or contest offered by a contest operator or
   89  noncommercial contest operator.
   90         (5) “Division” means the Division of Pari-mutuel Wagering
   91  of the Department of Business and Professional Regulation.
   92         (6) “Entry fee” means the cash or cash equivalent amount
   93  that is required to be paid by a person to a contest operator or
   94  noncommercial contest operator to participate in a fantasy
   95  sports contest.
   96         (7) “Fantasy sports contest” means a fantasy or simulation
   97  sports game or contest offered by a contest operator or a
   98  noncommercial contest operator in which a contest participant
   99  manages a fantasy or simulation sports team composed of athletes
  100  from a professional sports organization and which meets each of
  101  the following requirements:
  102         (a) All prizes and awards offered to winning contest
  103  participants are established and made known to the contest
  104  participants in advance of the game or contest and their value
  105  is not determined by the number of contest participants or the
  106  amount of any fees paid by those contest participants.
  107         (b) All winning outcomes reflect the relative knowledge and
  108  skill of the contest participants and are determined
  109  predominantly by accumulated statistical results of the
  110  performance of individuals, including athletes in the case of
  111  sporting events.
  112         (c) No winning outcome is based on the score, point spread,
  113  or any performance or performances of any single actual team or
  114  combination of such teams; solely on any single performance of
  115  an individual athlete or player in a single actual event; on a
  116  pari-mutuel event, as the term “pari-mutuel” is defined in s.
  117  550.002; on a game of poker or other card game; or on the
  118  performances of participants in collegiate, high school, or
  119  youth sporting events.
  120         (d) No casino graphics, themes, or titles, including, but
  121  not limited to, depictions of slot machine-style symbols, cards,
  122  dice, craps, roulette, or lotto, are displayed or depicted.
  123         (8) “Noncommercial contest operator” means a natural person
  124  who organizes and conducts a fantasy or simulation sports
  125  contest in which contest participants are charged entry fees for
  126  the right to participate; entry fees are collected, maintained,
  127  and distributed by the same natural person; the total entry fees
  128  collected, maintained, and distributed by such natural person do
  129  not exceed $1,500 per season or a total of $10,000 per calendar
  130  year; and all entry fees are returned to the contest
  131  participants in the form of prizes.
  132         Section 4. Section 546.14, Florida Statutes, is created to
  133  read:
  134         546.14 Enforcement and administration; rulemaking.—
  135         (1) The division shall enforce and administer this act.
  136         (2) The division may:
  137         (a) Conduct investigations and monitor the operation and
  138  play of fantasy sports contests.
  139         (b) Review the books, accounts, and records of any current
  140  or former contest operator.
  141         (c) Deny, suspend, or revoke any license under this act for
  142  any violation of state law or rule.
  143         (d) Take testimony, issue summons and subpoenas for any
  144  witness, and issue subpoenas duces tecum in connection with any
  145  matter within its jurisdiction.
  146         (e) Monitor and ensure the proper collection and
  147  safeguarding of entry fees and the payment of contest prizes in
  148  accordance with consumer protection procedures enacted pursuant
  149  to s. 546.16.
  150         (f) Investigate any licensed or unlicensed person or entity
  151  when such person or entity is advertising as offering or
  152  providing, or is engaged in conducting, a fantasy sports contest
  153  that requires licensure under this act or when a contest
  154  operator or noncommercial contest operator is engaged in
  155  activities that do not comply with or are prohibited by this
  156  act. The division shall have the authority to issue an order to
  157  such licensed or unlicensed person or entity or contest operator
  158  or noncommercial contest operator to cease and desist the
  159  further conduct of such activities, to seek an injunction, or to
  160  take other appropriate action to enforce the requirements of
  161  this act.
  162         (3) The division shall revoke a contest operator’s license
  163  if the contest operator offers fantasy sports contests that
  164  violate s. 546.13(6)(c).
  165         (4) The division shall adopt rules to implement and
  166  administer this act. Such rules may not conflict with, and must
  167  be applied, construed, and interpreted in a manner consistent
  168  with, the gaming compact ratified, approved, and described in s.
  169  285.710(3).
  170         Section 5. Section 546.15, Florida Statutes, is created to
  171  read:
  172         546.15 Licensing.—
  173         (1) A contest operator must be licensed by the division to
  174  conduct fantasy sports contests within this state.
  175         (2) The application must include:
  176         (a) The full name of the applicant.
  177         (b) If the applicant is a corporation, the name of the
  178  state in which the applicant is incorporated and the names and
  179  addresses of the officers, directors, and shareholders who hold
  180  15 percent or more equity.
  181         (c) If the applicant is a business entity other than a
  182  corporation, the names and addresses of each principal, partner,
  183  or shareholder who holds 15 percent or more equity.
  184         (d) The names and addresses of the ultimate equitable
  185  owners of the corporation or other business entity, if different
  186  from those provided under paragraph (b) or paragraph (c), unless
  187  the securities of the corporation or entity are registered
  188  pursuant to s. 12 of the Securities Exchange Act of 1934, 15
  189  U.S.C. ss. 78a-78kk, and:
  190         1. The corporation or entity files with the United States
  191  Securities and Exchange Commission the reports required by s. 13
  192  of that act; or
  193         2. The securities of the corporation or entity are
  194  regularly traded on an established securities market in the
  195  United States.
  196         (e) The estimated number of fantasy sports contests to be
  197  conducted by the applicant annually.
  198         (f) A statement of the assets and liabilities of the
  199  applicant.
  200         (g) If required by the division, the names and addresses of
  201  the officers and directors of any creditor of the applicant and
  202  of stockholders who hold more than 10 percent of the stock of
  203  the creditor.
  204         (h) For each individual listed in the application pursuant
  205  to paragraph (a), paragraph (b), paragraph (c), or paragraph
  206  (d), a full set of fingerprints to be submitted to the division
  207  or to a vendor, entity, or agency authorized by s. 943.053(13).
  208         1. The division, vendor, entity, or agency shall forward
  209  the fingerprints to the Department of Law Enforcement for state
  210  processing, and the Department of Law Enforcement shall forward
  211  the fingerprints to the Federal Bureau of Investigation for
  212  national processing.
  213         2. Fingerprints submitted to the Department of Law
  214  Enforcement pursuant to this paragraph shall be retained by the
  215  Department of Law Enforcement as provided in s. 943.05(2)(g) and
  216  (h) and, when the Department of Law Enforcement begins
  217  participation in the program, shall be enrolled in the Federal
  218  Bureau of Investigation’s national retained print arrest
  219  notification program. Any arrest record identified shall be
  220  reported to the division by the Department of Law Enforcement.
  221         (i) For each foreign national, such documents as necessary
  222  to allow the division to conduct criminal history records checks
  223  in the individual’s home country. The applicant must pay the
  224  full cost of processing fingerprints and required documentation.
  225         (3) A person or entity is not eligible for licensure as a
  226  contest operator or for licensure renewal if an individual
  227  required to be listed pursuant to paragraph (2)(a), paragraph
  228  (2)(b), paragraph (2)(c), or paragraph (2)(d) is determined by
  229  the division, after investigation, not to be of good moral
  230  character or is found to have been convicted of a felony in this
  231  state, any offense in another jurisdiction which would be
  232  considered a felony if committed in this state, or a felony
  233  under the laws of the United States. As used in this subsection,
  234  the term “convicted” means having been found guilty, with or
  235  without adjudication of guilt, as a result of a jury verdict,
  236  nonjury trial, or entry of a plea of guilty or nolo contendere.
  237         (4) The license of a contest operator is automatically
  238  suspended upon entry of a final order imposing an administrative
  239  fine against the contest operator, until the administrative fine
  240  is paid, if 30 calendar days have elapsed since the entry of the
  241  final order. The license of a contest operator may not be
  242  renewed and an application for licensure as a contest operator
  243  may not be approved if the contest operator or the applicant for
  244  licensure as a contest operator is liable for an outstanding
  245  administrative fine imposed under this act. Notwithstanding the
  246  provisions of this subsection, a contest operator’s license may
  247  not be suspended and an application for licensure as a contest
  248  operator may not be denied if the contest operator or the
  249  applicant has an appeal from a final order pending in any
  250  appellate court.
  251         Section 6. Section 546.16, Florida Statutes, is created to
  252  read:
  253         546.16 Consumer protection.—
  254         (1) A contest operator must implement procedures for
  255  fantasy sports contests which:
  256         (a) Prevent its employees, their relatives, or persons
  257  living in the same household as the employees from competing in
  258  a fantasy sports contest in which a cash prize is awarded.
  259  However, a contest operator may offer fantasy sports contests to
  260  its employees in which the employees are the sole participants
  261  in the contests. For the purposes of this paragraph, the term
  262  “relative” means a spouse, father, mother, son, daughter,
  263  grandfather, grandmother, brother, sister, uncle, aunt, cousin,
  264  nephew, niece, father-in-law, mother-in-law, son-in-law,
  265  daughter-in-law, brother-in-law, sister-in-law, stepfather,
  266  stepmother, stepson, stepdaughter, stepbrother, stepsister,
  267  half-brother, or half-sister.
  268         (b) Prohibit the contest operator from being a contest
  269  participant in a fantasy sports contest that he or she offers.
  270         (c) Prevent its employees or agents from sharing with a
  271  third party confidential information that could affect fantasy
  272  sports contest play, until the information has been made
  273  publicly available.
  274         (d) Verify that contest participants are 21 years of age or
  275  older.
  276         (e) Restrict an individual who is a player, a game
  277  official, or another participant in a real-world game or
  278  competition from participating in a fantasy sports contest that
  279  is determined, in whole or in part, on the performance of that
  280  individual, the individual’s real-world team, or the accumulated
  281  statistical results of the sport or competition in which he or
  282  she is a player, game official, or other participant.
  283         (f) Allow individuals to restrict or prevent their own
  284  access to fantasy sports contests and take reasonable steps to
  285  prevent those individuals from entering a fantasy sports
  286  contest.
  287         (g) Limit the number of entries a single contest
  288  participant may submit to each fantasy sports contest and take
  289  reasonable steps to prevent participants from submitting more
  290  than the allowable number of entries.
  291         (h) Segregate contest participants’ funds from operational
  292  funds or maintain a reserve in the form of cash, cash
  293  equivalents, payment processor reserves, payment processor
  294  receivables, an irrevocable letter of credit, a bond, or a
  295  combination thereof in the total amount of deposits in contest
  296  participants’ accounts for the benefit and protection of
  297  authorized contest participants’ funds held in fantasy sports
  298  contest accounts.
  299         (2)(a) A contest operator must annually contract with a
  300  third party to perform an independent audit, consistent with the
  301  standards established by the American Institute of Certified
  302  Public Accountants, to ensure compliance with this act. The
  303  contest operator shall submit the results of the independent
  304  audit to the division no later than 90 days after the end of
  305  each annual licensing period.
  306         (b) Any data source and the corresponding data to determine
  307  the results of all fantasy sports contests offered by contest
  308  operators, other than noncommercial contest operators, must be
  309  complete, accurate, reliable, and appropriate to settle the
  310  outcome of the fantasy sports contests for which it is used.
  311         Section 7. Section 546.17, Florida Statutes, is created to
  312  read:
  313         546.17 Records and reports.—Each contest operator shall
  314  keep and maintain daily records of its operations and shall
  315  maintain such records for at least 3 years. The records must
  316  sufficiently detail all financial transactions required to
  317  determine compliance with the requirements of this act and must
  318  be available for audit and inspection by the division or other
  319  law enforcement agencies during the contest operator’s regular
  320  business hours. The division shall adopt rules to implement this
  321  section.
  322         Section 8. Section 546.18, Florida Statutes, is created to
  323  read:
  324         546.18 Penalties; applicability; exemption.—
  325         (1)(a) A contest operator, or an employee or agent thereof,
  326  who violates this act is subject to an administrative fine, not
  327  to exceed $5,000 for each violation and not to exceed $100,000
  328  in the aggregate. All fines imposed and collected under this
  329  subsection must be deposited with the Chief Financial Officer to
  330  the credit of the General Revenue Fund. An action to recover
  331  such penalties may be brought by the division or the Department
  332  of Legal Affairs in the name and on behalf of the state.
  333         (b) The penalty provisions established in this subsection
  334  do not apply to violations committed by a contest operator which
  335  occurred prior to the issuance of a license under this act if
  336  the contest operator applies for a license within 90 days after
  337  the date the division begins accepting applications, and
  338  receives a license within 240 days after such date.
  339         (2) Fantasy sports contests conducted by a contest operator
  340  or noncommercial contest operator in accordance with this act
  341  are not subject to s. 849.01, s. 849.08, s. 849.09, s. 849.11,
  342  s. 849.14, or s. 849.25.
  343         Section 9. If SB 4A, 2021 Special Session A, becomes a law,
  344  paragraph (b) of subsection (3) of section 16.71, Florida
  345  Statutes, as created by SB 4A, 2021 Special Session A, is
  346  amended to read:
  347         16.71 Florida Gaming Control Commission; creation;
  348  meetings; membership.—
  349         (3) REQUIREMENTS FOR APPOINTMENT; PROHIBITIONS.—
  350         (b) The Governor may not solicit or request any
  351  nominations, recommendations, or communications about potential
  352  candidates for appointment to the commission from:
  353         1. Any person that holds a permit or license issued under
  354  chapter 550, or a license issued under chapter 546, chapter 551,
  355  or chapter 849; an officer, official, or employee of such
  356  permitholder or licensee; or an ultimate equitable owner, as
  357  defined in s. 550.002(37), of such permitholder or licensee;
  358         2. Any officer, official, employee, or other person with
  359  duties or responsibilities relating to a gaming operation owned
  360  by an Indian tribe that has a valid and active compact with the
  361  state; a contractor or subcontractor of such tribe or an entity
  362  employed, licensed, or contracted by such tribe; or an ultimate
  363  equitable owner, as defined in s. 550.002(37), of such entity;
  364  or
  365         3. Any registered lobbyist for the executive or legislative
  366  branch who represents any person or entity identified in
  367  subparagraph 1. or subparagraph 2.
  368         Section 10. If SB 4A, 2021 Special Session A, becomes a
  369  law, paragraph (i) of subsection (1) of section 16.712, Florida
  370  Statutes, as created by SB 4A, 2021 Special Session A, is
  371  amended to read:
  372         16.712 Florida Gaming Control Commission authorizations,
  373  duties, and responsibilities.—
  374         (1) The commission shall do all of the following:
  375         (i) Receive and review violations reported by a state or
  376  local law enforcement agency, the Department of Law Enforcement,
  377  the Department of Legal Affairs, the Department of Agriculture
  378  and Consumer Services, the Department of Business and
  379  Professional Regulation, the Department of the Lottery, the
  380  Seminole Tribe of Florida, or any person licensed under chapter
  381  24, part II of chapter 285, chapter 546, chapter 550, chapter
  382  551, or chapter 849 and determine whether such violation is
  383  appropriate for referral to the Office of Statewide Prosecution.
  384         Section 11. If SB 4A, 2021 Special Session A, becomes a
  385  law, paragraph (d) of subsection (1) and paragraph (a) of
  386  subsection (2) of section 16.713, Florida Statutes, as created
  387  by SB 4A, 2021 Special Session A, are amended to read:
  388         16.713 Florida Gaming Control Commission; appointment and
  389  employment restrictions.—
  390         (1) PERSONS INELIGIBLE FOR APPOINTMENT TO THE COMMISSION.
  391  All of the following people are ineligible for appointment to
  392  the commission:
  393         (d) A person who has had a license or permit issued under
  394  chapter 546, chapter 550, chapter 551, or chapter 849 or a
  395  gaming license issued by any other jurisdiction denied,
  396  suspended, or revoked.
  397         (2) PROHIBITIONS FOR EMPLOYEES AND COMMISSIONERS; PERSONS
  398  INELIGIBLE FOR APPOINTMENT TO AND EMPLOYMENT WITH THE
  399  COMMISSION.—
  400         (a) A person may not, for the 2 years immediately preceding
  401  the date of appointment to or employment with the commission and
  402  while appointed to or employed with the commission:
  403         1. Hold a permit or license issued under chapter 550 or a
  404  license issued under chapter 546, chapter 551, or chapter 849;
  405  be an officer, official, or employee of such permitholder or
  406  licensee; or be an ultimate equitable owner, as defined in s.
  407  550.002(37), of such permitholder or licensee;
  408         2. Be an officer, official, employee, or other person with
  409  duties or responsibilities relating to a gaming operation owned
  410  by an Indian tribe that has a valid and active compact with the
  411  state; be a contractor or subcontractor of such tribe or an
  412  entity employed, licensed, or contracted by such tribe; or be an
  413  ultimate equitable owner, as defined in s. 550.002(37), of such
  414  entity;
  415         3. Be or have been a member of the Legislature;
  416         4. Be a registered lobbyist for the executive or
  417  legislative branch, except while a commissioner when officially
  418  representing the commission; or
  419         5. Be a bingo game operator or an employee of a bingo game
  420  operator.
  421         Section 12. If SB 4A, 2021 Special Session A, becomes a
  422  law, paragraphs (b) and (c) of subsection (2) of section 16.715,
  423  Florida Statutes, as created by SB 4A, 2021 Special Session A,
  424  are amended to read:
  425         16.715 Florida Gaming Control Commission standards of
  426  conduct; ex parte communications.—
  427         (2) FORMER COMMISSIONERS AND EMPLOYEES.—
  428         (b) A commissioner may not, for the 2 years immediately
  429  following the date of resignation or termination from the
  430  commission:
  431         1. Hold a permit or license issued under chapter 550, or a
  432  license issued under chapter 546, chapter 551, or chapter 849;
  433  be an officer, official, or employee of such permitholder or
  434  licensee; or be an ultimate equitable owner, as defined in s.
  435  550.002(37), of such permitholder or licensee;
  436         2. Accept employment by or compensation from a business
  437  entity that, directly or indirectly, owns or controls a person
  438  regulated by the commission; from a person regulated by the
  439  commission; from a business entity which, directly or
  440  indirectly, is an affiliate or subsidiary of a person regulated
  441  by the commission; or from a business entity or trade
  442  association that has been a party to a commission proceeding
  443  within the 2 years preceding the member’s resignation or
  444  termination of service on the commission; or
  445         3. Be a bingo game operator or an employee of a bingo game
  446  operator.
  447         (c) A person employed by the commission may not, for the 2
  448  years immediately following the date of termination or
  449  resignation from employment with the commission:
  450         1. Hold a permit or license issued under chapter 550, or a
  451  license issued under chapter 546, chapter 551, or chapter 849;
  452  be an officer, official, or employee of such permitholder or
  453  licensee; or be an ultimate equitable owner, as defined in s.
  454  550.002(37), of such permitholder or licensee; or
  455         2. Be a bingo game operator or an employee of a bingo game
  456  operator.
  457         Section 13. Section 849.144, Florida Statutes, is created
  458  to read:
  459         849.144 Fantasy sports contest exemptions.—Sections 849.01,
  460  849.08, 849.09, 849.11, 849.14, and 849.25 do not apply to
  461  participation in or the conduct of fantasy sports contests
  462  conducted pursuant to chapter 546.
  463         Section 14. If SB 4A, 2021 Special Session A, becomes a
  464  law, subsection (1) of section 11 of SB 4A, 2021 Special Session
  465  A, is amended to read:
  466         (1) Effective July 1, 2022, all powers, duties, functions,
  467  records, offices, personnel, associated administrative support
  468  positions, property, pending issues, existing contracts,
  469  administrative authority, administrative rules, and unexpended
  470  balances of appropriations, allocations, and other funds in the
  471  Department of Business and Professional Regulation related to
  472  the oversight responsibilities by the state compliance agency
  473  for authorized gaming compacts under s. 285.710, Florida
  474  Statutes, the regulation of fantasy sports contests under
  475  chapter 546, Florida Statutes, the regulation of pari-mutuel
  476  wagering under chapter 550, Florida Statutes, the regulation of
  477  slot machines and slot machine gaming under chapter 551, Florida
  478  Statutes, and the regulation of cardrooms under s. 849.086,
  479  Florida Statutes, are transferred by a type two transfer, as
  480  defined in s. 20.06(2), Florida Statutes, to the Florida Gaming
  481  Control Commission within the Department of Legal Affairs,
  482  Office of the Attorney General.
  483         Section 15. This act shall take effect on the same date
  484  that SB 2A or similar legislation takes effect, if such
  485  legislation is adopted in the same legislative session or an
  486  extension thereof and becomes a law.