Bill Text: IA HF648 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act relating to sports gambling and wagering, by providing for fantasy sports contests and sports betting, providing for taxes and fees, making penalties applicable, and including implementation and effective date provisions. (Formerly HSB 198; See HF 748.)

Spectrum: Partisan Bill (? 1-0)

Status: (Introduced) 2019-04-22 - Withdrawn. H.J. 945. [HF648 Detail]

Download: Iowa-2019-HF648-Introduced.html
House File 648 - Introduced HOUSE FILE 648 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO HSB 198) A BILL FOR An Act relating to sports gambling and wagering, by providing 1 for fantasy sports contests and sports betting, providing 2 for taxes and fees, making penalties applicable, and 3 including implementation and effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2452HV (3) 88 ec/rn
H.F. 648 DIVISION I 1 LICENSED SPORTS BETTING 2 Section 1. Section 99D.7, subsection 23, Code 2019, is 3 amended to read as follows: 4 23. To establish a process to allow a person to be 5 voluntarily excluded from advance deposit wagering as defined 6 in section 99D.11, from an internet fantasy sports contest as 7 defined in section 99E.1, from advance deposit sports betting 8 wagering as defined in section 99F.9, from the wagering area 9 of a racetrack enclosure and from the gaming floor and sports 10 betting wagering area , as defined in section 99F.1 , of all 11 other licensed facilities under this chapter and chapter 99F 12 as provided in this subsection . The process shall provide 13 that an initial request by a person to be voluntarily excluded 14 shall be for a period of five years or life and any subsequent 15 request following any five-year period shall be for a period 16 of five years or life. The process established shall require 17 that licensees be provided electronic access to names and 18 social security numbers of persons voluntarily excluded 19 through a secured interactive internet site maintained by 20 the commission and information regarding persons voluntarily 21 excluded shall be disseminated to all licensees under this 22 chapter and chapter 99F . The names, social security numbers, 23 and information regarding persons voluntarily excluded shall 24 be kept confidential unless otherwise ordered by a court or by 25 another person duly authorized to release such information. 26 The process established shall also require a person requesting 27 to be voluntarily excluded be provided information compiled 28 by the Iowa department of public health on gambling treatment 29 options. The state and any licensee under this chapter or 30 chapter 99F shall not be liable to any person for any claim 31 which may arise from this process. In addition to any other 32 penalty provided by law, any money or thing of value that has 33 been obtained by, or is owed to, a voluntarily excluded person 34 as a result of wagers made by the person after the person has 35 -1- LSB 2452HV (3) 88 ec/rn 1/ 31
H.F. 648 been voluntarily excluded shall be forfeited by the person and 1 shall be credited to the general fund of the state. 2 Sec. 2. Section 99F.1, subsection 1, Code 2019, is amended 3 to read as follows: 4 1. “Adjusted gross receipts” means the gross receipts less 5 winnings paid to wagerers on gambling games . However, “adjusted 6 gross receipts” does not include promotional play receipts 7 received after the date in any fiscal year that the commission 8 determines that the wagering tax imposed pursuant to section 9 99F.11 on all licensees in that fiscal year on promotional 10 play receipts exceeds twenty-five million eight hundred twenty 11 thousand dollars. 12 Sec. 3. Section 99F.1, Code 2019, is amended by adding the 13 following new subsections: 14 NEW SUBSECTION . 2A. “Authorized sporting event” means a 15 professional sporting event, a collegiate sporting event, or an 16 international team or individual sporting event governed by the 17 international olympic committee in which no participant in the 18 sporting event is under eighteen years of age. 19 NEW SUBSECTION . 23. “Sports betting” means the acceptance 20 of wagers on an authorized sporting event by any system of 21 wagering as authorized by the commission. “Sports betting” 22 does not include wagering on a race as defined in section 99D.2 23 or entering an internet fantasy sports contest as defined in 24 section 99E.1. 25 NEW SUBSECTION . 24. “Sports betting net receipts” means 26 the gross receipts less winnings paid to wagerers on sports 27 betting. 28 NEW SUBSECTION . 25. “Sports betting wagering area” means an 29 area, as designated by the commission, in which sports betting 30 is conducted. 31 Sec. 4. Section 99F.1, subsection 17, Code 2019, is amended 32 to read as follows: 33 17. “Licensee” means any person licensed under section 99F.7 34 or 99F.7A . 35 -2- LSB 2452HV (3) 88 ec/rn 2/ 31
H.F. 648 Sec. 5. Section 99F.3, Code 2019, is amended to read as 1 follows: 2 99F.3 Gambling games and sports betting authorized. 3 The system of wagering on a gambling game and sports betting 4 as provided by this chapter is legal, when conducted on an 5 excursion gambling boat, gambling structure, or racetrack 6 enclosure at authorized locations by a licensee as provided in 7 this chapter . 8 Sec. 6. Section 99F.4, subsections 3 and 22, Code 2019, are 9 amended to read as follows: 10 3. To adopt standards under which all excursion gambling 11 boat operations shall be held and standards for the facilities 12 within which the gambling operations are to be held. The 13 commission may authorize the operation of gambling games on an 14 excursion gambling boat and sports betting in a sports betting 15 wagering area which is also licensed to sell or serve alcoholic 16 beverages, wine, or beer as defined in section 123.3 . 17 22. To establish a process to allow a person to be 18 voluntarily excluded from advance deposit wagering as defined 19 in section 99D.11, from an internet fantasy sports contest as 20 defined in section 99E.1, from advance deposit sports betting 21 wagering as defined in section 99F.9, from the gaming floor 22 and sports betting wagering area of an excursion gambling 23 boat, from the wagering area, as defined in section 99D.2 , 24 and from the gaming floor and sports betting wagering area 25 of all other licensed facilities under this chapter and 26 chapter 99D as provided in this subsection . The process shall 27 provide that an initial request by a person to be voluntarily 28 excluded shall be for a period of five years or life and any 29 subsequent request following any five-year period shall be for 30 a period of five years or life. The process established shall 31 require that licensees be provided electronic access to names 32 and social security numbers of persons voluntarily excluded 33 through a secured interactive internet site maintained by 34 the commission and information regarding persons voluntarily 35 -3- LSB 2452HV (3) 88 ec/rn 3/ 31
H.F. 648 excluded shall be disseminated to all licensees under this 1 chapter and chapter 99D . The names, social security numbers, 2 and information regarding persons voluntarily excluded shall 3 be kept confidential unless otherwise ordered by a court or by 4 another person duly authorized to release such information. 5 The process established shall also require a person requesting 6 to be voluntarily excluded be provided information compiled 7 by the Iowa department of public health on gambling treatment 8 options. The state and any licensee under this chapter or 9 chapter 99D shall not be liable to any person for any claim 10 which may arise from this process. In addition to any other 11 penalty provided by law, any money or thing of value that has 12 been obtained by, or is owed to, a voluntarily excluded person 13 as a result of wagers made by the person after the person has 14 been voluntarily excluded shall be forfeited by the person and 15 shall be credited to the general fund of the state. 16 Sec. 7. Section 99F.4, Code 2019, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 27. To adopt standards under which all 19 sports betting is conducted, including the scope and type of 20 wagers allowed, to identify occupations within sports betting 21 which require licensing, and to adopt standards for licensing 22 and background qualifications for occupations including 23 establishing fees for the occupational license. In considering 24 standards regarding the scope and type of wagers allowed for 25 sports betting, the commission shall consult with interested 26 professional and collegiate sports leagues and, if interested, 27 the international olympic committee. All revenue received by 28 the commission under this chapter from license fees shall be 29 deposited in the general fund of the state and shall be subject 30 to the requirements of section 8.60. All revenue received by 31 the commission from regulatory fees shall be deposited into the 32 gaming regulatory revolving fund established in section 99F.20. 33 Sec. 8. NEW SECTION . 99F.7A Sports betting —— license —— 34 terms and conditions —— fees. 35 -4- LSB 2452HV (3) 88 ec/rn 4/ 31
H.F. 648 1. The commission shall, upon payment of an initial 1 license fee of fifteen thousand dollars and submission of an 2 application to the commission consistent with the requirements 3 of section 99F.6, issue a license to conduct sports betting 4 to a licensee authorized to conduct gambling games at a 5 pari-mutuel racetrack enclosure or a licensee authorized to 6 operate an excursion gambling boat or gambling structure, 7 subject to the requirements of this chapter. The annual 8 renewal fee for a license to conduct sports betting shall be 9 fifteen thousand dollars. 10 2. A licensee under this section shall do all of the 11 following: 12 a. Include on the internet site or mobile application used 13 by the licensee to conduct advance deposit sports betting 14 wagering as authorized in section 99F.9 the statewide telephone 15 number authorized by the Iowa department of public health to 16 provide problem gambling information and extensive responsible 17 gaming features in addition to those described in section 18 99F.4, subsection 22. 19 b. Establish, subject to commission approval, sports betting 20 wagering rules that specify the amounts to be paid on winning 21 sports betting wagers, the effect of changes in the scheduling 22 of an authorized sporting event subject to sports betting, and 23 the source of the information used to determine the outcome 24 of a sports betting wager. The sports betting wagering rules 25 shall be displayed in the licensee’s sports betting wagering 26 area, posted on the internet site or mobile application used by 27 the licensee to conduct advance deposit sports betting wagering 28 as authorized in section 99F.9, and included in the terms and 29 conditions of the licensee’s advance deposit account sports 30 betting wagering system. 31 3. A licensee issued a license to conduct sports betting 32 under this section shall employ commercially reasonable steps 33 to prohibit coaches, athletic trainers, officials, players, or 34 other individuals who participate in an authorized sporting 35 -5- LSB 2452HV (3) 88 ec/rn 5/ 31
H.F. 648 event that is the subject of sports betting from sports betting 1 under this chapter. In addition, a licensee shall employ 2 commercially reasonable steps to prohibit persons who are 3 employed in a position with direct involvement with coaches, 4 players, athletic trainers, officials, players, or participants 5 in an authorized sporting event that is the subject of sports 6 betting from sports betting under this chapter. 7 Sec. 9. Section 99F.8, Code 2019, is amended to read as 8 follows: 9 99F.8 Bond of licensee. 10 A licensee licensed under section 99F.7 shall post a bond 11 to the state of Iowa before the license is issued in a sum 12 as the commission shall fix, with sureties to be approved by 13 the commission. The bond shall be used to guarantee that the 14 licensee faithfully makes the payments, keeps its books and 15 records and makes reports, and conducts its gambling games and 16 sports betting in conformity with this chapter and the rules 17 adopted by the commission. The bond shall not be canceled by 18 a surety on less than thirty days’ notice in writing to the 19 commission. If a bond is canceled and the licensee fails to 20 file a new bond with the commission in the required amount on 21 or before the effective date of cancellation, the licensee’s 22 license shall be revoked. The total and aggregate liability 23 of the surety on the bond is limited to the amount specified in 24 the bond. 25 Sec. 10. Section 99F.9, subsection 1, Code 2019, is amended 26 to read as follows: 27 1. Except as permitted in this section , the licensee 28 shall not permit no sports betting or any form of wagering on 29 gambling games. 30 Sec. 11. Section 99F.9, Code 2019, is amended by adding the 31 following new subsection: 32 NEW SUBSECTION . 3A. a. For the purposes of this section, 33 unless the context otherwise requires: 34 (1) “Advance deposit sports betting wagering” means a method 35 -6- LSB 2452HV (3) 88 ec/rn 6/ 31
H.F. 648 of sports betting in which an eligible individual may, in an 1 account established with a licensee under section 99F.7A, 2 deposit moneys into the account and use the account balance to 3 pay for sports betting. 4 (2) “Advance deposit sports betting wagering operator” means 5 an advance deposit sports betting wagering operator licensed 6 by the commission who has entered into an agreement with a 7 licensee under section 99F.7A to provide advance deposit sports 8 betting wagering. 9 (3) “Eligible individual” means an individual who is at 10 least twenty-one years of age or older who is located within 11 this state. 12 b. The commission may authorize a licensee under section 13 99F.7A to conduct advance deposit sports betting wagering. An 14 advance deposit sports betting wager may be placed in person 15 in the sports wagering area, or from any other location via 16 a telephone-type device or any other electronic means. The 17 commission may also issue an advance deposit sports betting 18 wagering operator license to an entity who complies with this 19 subsection and section 99F.6 and may require the advance 20 deposit sports wagering operator to conduct an audit consistent 21 with the requirements of section 99F.13. 22 c. An unlicensed person taking or receiving sports betting 23 wagers from residents of this state is guilty of a class “D” 24 felony. 25 Sec. 12. Section 99F.9, subsection 4, Code 2019, is amended 26 to read as follows: 27 4. A person under the age of twenty-one years shall not make 28 or attempt to make a wager pursuant to subsection 3A or on an 29 excursion gambling boat, gambling structure, or in a racetrack 30 enclosure and shall not be allowed on the gaming floor of 31 an excursion gambling boat or gambling structure or in the 32 wagering area, as defined in section 99D.2 , or on the gaming 33 floor of a racetrack enclosure. However, a person eighteen 34 years of age or older may be employed to work on the gaming 35 -7- LSB 2452HV (3) 88 ec/rn 7/ 31
H.F. 648 floor of an excursion gambling boat or gambling structure or 1 in the wagering area or on the gaming floor of a racetrack 2 enclosure. A person who violates this subsection with respect 3 to making or attempting to make a wager commits a scheduled 4 violation under section 805.8C, subsection 5 , paragraph “a” . 5 Sec. 13. Section 99F.11, subsection 3, unnumbered paragraph 6 1, Code 2019, is amended to read as follows: 7 The taxes imposed by this section on adjusted gross receipts 8 from gambling games authorized under this chapter shall be paid 9 by the licensee to the treasurer of state within ten days after 10 the close of the day when the wagers were made and shall be 11 distributed as follows: 12 Sec. 14. Section 99F.11, Code 2019, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 4. A tax is imposed on the sports betting 15 net receipts received each fiscal year by a licensed operator 16 from sports betting authorized under this chapter at the rate 17 of six and three-quarters percent. The taxes imposed by this 18 subsection for sports betting authorized under this chapter 19 shall be paid by the licensed operator to the treasurer of 20 state as determined by the commission and shall be credited as 21 provided in section 8.57, subsection 5. 22 Sec. 15. Section 99F.12, subsection 2, Code 2019, is amended 23 to read as follows: 24 2. a. The licensee shall furnish to the commission reports 25 and information as the commission may require with respect to 26 the licensee’s activities. 27 b. A licensee under section 99F.7A shall promptly report 28 to the commission any criminal or disciplinary proceedings 29 commenced against the licensee or its employees in connection 30 with the licensee conducting sports betting including advance 31 deposit sports betting wagering, any abnormal wagering activity 32 or patterns that may indicate a concern about the integrity 33 of an authorized sporting event or events, and any other 34 conduct with the potential to corrupt a wagering outcome of 35 -8- LSB 2452HV (3) 88 ec/rn 8/ 31
H.F. 648 an authorized sporting event for purposes of financial gain, 1 including but not limited to match fixing, and suspicious or 2 illegal wagering activities, including the use of funds derived 3 from illegal activity, wagers to conceal or launder funds 4 derived from illegal activity, use of agents to place wagers, 5 or use of false identification. The commission is required to 6 share any information received pursuant to this paragraph with 7 any law enforcement entity, sports team, sports governing body, 8 or regulatory agency the commission deems appropriate. 9 c. The gross receipts and adjusted gross receipts from 10 gambling shall be separately handled and accounted for from 11 all other moneys received from operation of an excursion 12 gambling boat or from operation of a racetrack enclosure or 13 gambling structure licensed to conduct gambling games. The 14 commission may designate a representative to board a licensed 15 excursion gambling boat or to enter a racetrack enclosure or 16 gambling structure licensed to conduct gambling games. The 17 representative shall have full access to all places within the 18 enclosure of the boat, the gambling structure, or the racetrack 19 enclosure and shall directly supervise the handling and 20 accounting of all gross receipts and adjusted gross receipts 21 from gambling. The representative shall supervise and check 22 the admissions. The compensation of a representative shall be 23 fixed by the commission but shall be paid by the licensee. 24 Sec. 16. Section 99F.15, subsection 1, paragraph c, Code 25 2019, is amended to read as follows: 26 c. Acting, or employing a person to act, as a shill or 27 decoy to encourage participation in a gambling game or sports 28 betting . 29 Sec. 17. Section 99F.15, subsection 4, paragraphs d, h, and 30 i, Code 2019, are amended to read as follows: 31 d. Cheats at a gambling game, including but not limited to 32 committing any act which alters the outcome of the game , or 33 cheats at sports betting . 34 h. Claims, collects, or takes, or attempts to claim, 35 -9- LSB 2452HV (3) 88 ec/rn 9/ 31
H.F. 648 collect, or take, money or anything of value in or from the 1 gambling games or sports betting , with intent to defraud, 2 without having made a wager contingent on winning a gambling 3 game or sports betting wager , or claims, collects, or takes an 4 amount of money or thing of value of greater value than the 5 amount won. 6 i. Knowingly entices or induces a person to go to any place 7 where a gambling game or sports betting is being conducted or 8 operated in violation of the provisions of this chapter with 9 the intent that the other person plays or participates in that 10 gambling game or sports betting . 11 Sec. 18. Section 99F.20, subsection 1, Code 2019, is amended 12 to read as follows: 13 1. A gaming regulatory revolving fund is created in 14 the state treasury under the control of the department of 15 inspections and appeals. The fund shall consist of fees 16 collected and deposited into the fund paid by licensees 17 pursuant to section 99D.14, subsection 2 , paragraph “c” , fees 18 paid by licensees pursuant to section 99E.5, subsection 5, 19 paragraph “c” , regulatory fees paid by licensees pursuant 20 to section 99F.4, subsection 27, and fees paid by licensees 21 pursuant to section 99F.10, subsection 4 , paragraph “c” . All 22 costs relating to racetrack, excursion boat, and gambling 23 structure regulation shall be paid from the fund as provided in 24 appropriations made for this purpose by the general assembly. 25 The department shall provide quarterly reports to the 26 department of management and the legislative services agency 27 specifying revenues billed and collected and expenditures 28 from the fund in a format as determined by the department 29 of management in consultation with the legislative services 30 agency. 31 Sec. 19. EMERGENCY RULES. The state racing and gaming 32 commission created under section 99D.5 may adopt emergency 33 rules under section 17A.4, subsection 3, and section 17A.5, 34 subsection 2, paragraph “b”, to implement the provisions of 35 -10- LSB 2452HV (3) 88 ec/rn 10/ 31
H.F. 648 this division of this Act and the rules shall be effective 1 immediately upon filing unless a later date is specified in the 2 rules. Any rules adopted in accordance with this section shall 3 also be published as a notice of intended action as provided 4 in section 17A.4. 5 Sec. 20. IMPLEMENTATION. The racing and gaming commission 6 shall not implement this division of this Act until the date 7 the commission has adopted rules pursuant to chapter 17A 8 providing for such implementation and such rules have become 9 effective. 10 Sec. 21. EFFECTIVE DATE. This division of this Act, being 11 deemed of immediate importance, takes effect upon enactment. 12 DIVISION II 13 INTERNET FANTASY SPORTS CONTESTS 14 Sec. 22. Section 80.25A, Code 2019, is amended to read as 15 follows: 16 80.25A Pari-mutuel and gambling game Gaming operations —— 17 investigation and enforcement. 18 The commissioner of public safety shall direct the chief 19 of the division of criminal investigation to establish a 20 subdivision to be the primary criminal investigative and 21 enforcement agency for the purpose of enforcement of chapters 22 99D , 99E, and 99F . The commissioner of public safety shall 23 appoint or assign other agents to the division as necessary to 24 enforce chapters 99D , 99E, and 99F . All enforcement officers, 25 assistants, and agents of the division are subject to section 26 80.15 except clerical workers. 27 Sec. 23. NEW SECTION . 99E.1 Definitions. 28 As used in this chapter, unless the context otherwise 29 requires: 30 1. “Applicant” means an internet fantasy sports contest 31 service provider applying for a license to conduct internet 32 fantasy sports contests under this chapter. 33 2. “Commission” means the state racing and gaming commission 34 created under section 99D.5. 35 -11- LSB 2452HV (3) 88 ec/rn 11/ 31
H.F. 648 3. “Fantasy sports contest” includes any fantasy or 1 simulated game or contest in which the fantasy sports contest 2 operator is not a participant in the game or contest, the value 3 of all prizes and awards offered to winning participants are 4 established and made known to the participants in advance 5 of the contest, all winning outcomes reflect the relative 6 knowledge and skill of the participants and shall be determined 7 by accumulated statistical results of the performance of 8 individuals, including athletes in the case of sporting events, 9 and no winning outcome is based on the score, point spread, or 10 any performance or performances of any single actual team or 11 solely on any single performance of an individual athlete or 12 player in any single actual event. 13 4. “Internet fantasy sports contest” means a method of 14 entering a fantasy sports contest by which a person may 15 establish an account with an internet fantasy sports contest 16 service provider, deposit money into the account, and use 17 the account balance for entering a fantasy sports contest by 18 utilizing electronic communication. 19 5. “Internet fantasy sports contest adjusted revenues” means, 20 for each internet fantasy sports contest, the amount equal to 21 the total charges and fees collected from all participants 22 entering the internet fantasy sports contest less winnings paid 23 to participants in the contest, multiplied by the location 24 percentage. 25 6. “Internet fantasy sports contest player” means a person 26 who is at least twenty-one years of age and participates in an 27 internet fantasy sports contest operated by an internet fantasy 28 sports contest service provider. 29 7. “Internet fantasy sports contest service provider” means 30 a person, including a licensee under chapter 99D or 99F, who 31 conducts an internet fantasy sports contest as authorized by 32 this chapter. 33 8. “Licensee” means any person licensed under section 99E.5 34 to conduct internet fantasy sports contests. 35 -12- LSB 2452HV (3) 88 ec/rn 12/ 31
H.F. 648 9. “Location percentage” means, for each internet fantasy 1 sports contest, the percentage, rounded to the nearest tenth of 2 a percent, equal to the total charges and fees collected from 3 all internet fantasy sports contest players located in this 4 state divided by the total charges and fees collected from all 5 participants in the internet fantasy sports contest. 6 Sec. 24. NEW SECTION . 99E.2 Internet fantasy sports 7 contests authorized. 8 The system of entering an internet fantasy sports contest as 9 provided by this chapter is legal when conducted by a licensed 10 internet fantasy sports contest service provider as provided in 11 this chapter. 12 Sec. 25. NEW SECTION . 99E.3 Commission —— powers. 13 1. The commission shall have full jurisdiction over and 14 shall supervise internet fantasy sports contests and internet 15 fantasy sports contest service providers as governed by this 16 chapter. 17 2. The commission shall have the following powers and shall 18 adopt rules pursuant to chapter 17A to administer and implement 19 this chapter: 20 a. To review and investigate applicants and determine the 21 eligibility of applicants for a license to conduct internet 22 fantasy sports contests, pursuant to rules adopted by the 23 commission. 24 b. To license and regulate internet fantasy sports contest 25 service providers subject to the requirements of this chapter. 26 c. To provide for the prevention of practices detrimental to 27 the public and to provide for the best interests of internet 28 fantasy sports contests. 29 d. To investigate alleged violations of this chapter 30 or the commission rules, orders, or final decisions and to 31 take appropriate disciplinary action against a licensee, or 32 institute appropriate legal action for enforcement, or both. 33 Information gathered during an investigation is confidential 34 during the pendency of the investigation. 35 -13- LSB 2452HV (3) 88 ec/rn 13/ 31
H.F. 648 e. To assess fines and revoke or suspend licenses and to 1 impose penalties for violations of this chapter. 2 f. To take any other action as may be reasonable or 3 appropriate to enforce this chapter and the commission rules. 4 Sec. 26. NEW SECTION . 99E.4 Requirements of applicant —— 5 fee. 6 1. An applicant for a license to conduct internet fantasy 7 sports contests shall complete and sign an application on 8 the form prescribed and published by the commission. The 9 application shall include such information of the applicant 10 that the commission deems necessary for purposes of issuing a 11 license pursuant to this chapter. 12 2. An applicant shall submit fingerprints and information 13 that the commission deems necessary to the commission in the 14 manner prescribed on the application forms. The fingerprints 15 may be submitted to the federal bureau of investigation by 16 the department of public safety through the state criminal 17 history repository for the purpose of a national criminal 18 history check. The results of a criminal history record check 19 conducted pursuant to this subsection shall be considered a 20 confidential record under chapter 22. 21 3. Before a license is granted, the division of criminal 22 investigation of the department of public safety shall conduct 23 a thorough background investigation of the applicant for a 24 license to conduct internet fantasy sports contests. The 25 applicant shall provide information on a form as required by 26 the division of criminal investigation. 27 4. The commission shall charge the applicant a reasonable 28 fee set by the division of criminal investigation of the 29 department of public safety, to defray those costs associated 30 with the fingerprint and national criminal history check 31 requirements of subsection 2 and background investigations 32 conducted by agents of the division of criminal investigation 33 as provided in subsection 3. These fees and costs are in 34 addition to any other license fees and costs charged by the 35 -14- LSB 2452HV (3) 88 ec/rn 14/ 31
H.F. 648 commission. 1 5. The commission shall not grant a license to an applicant 2 if there is substantial evidence that any of the following 3 apply: 4 a. A license issued to the applicant to conduct internet 5 fantasy sports contests in another jurisdiction has been 6 revoked, or a request for a license to conduct internet fantasy 7 sports contests in another jurisdiction has been denied, by 8 an entity licensing persons to conduct such contests in that 9 jurisdiction. 10 b. The applicant has not demonstrated financial 11 responsibility sufficient to adequately meet the requirements 12 of the enterprise proposed. 13 c. The applicant does not adequately disclose the true 14 owners of the enterprise proposed. 15 d. The applicant has knowingly made a false statement of a 16 material fact to the commission. 17 e. The applicant has failed to meet a monetary obligation in 18 connection with conducting an internet fantasy sports contest. 19 f. The applicant is not of good repute and moral character 20 or the applicant has pled guilty to, or has been convicted of, 21 a felony. 22 g. Any member of the board of directors of the applicant is 23 not twenty-one years of age or older. 24 6. A person who knowingly makes a false statement on the 25 application is guilty of an aggravated misdemeanor. 26 7. For the purposes of this section, “applicant” includes 27 each member of the board of directors of an internet fantasy 28 sports contest service provider. 29 Sec. 27. NEW SECTION . 99E.5 Licenses —— fees —— terms and 30 conditions —— revocation. 31 1. If the commission is satisfied that the requirements 32 of this chapter and its rules adopted under this chapter 33 applicable to licensees have been or will be complied with, the 34 commission shall, upon payment of an initial annual license 35 -15- LSB 2452HV (3) 88 ec/rn 15/ 31
H.F. 648 fee of five thousand dollars, issue a license for a period of 1 not more than three years to an applicant to conduct internet 2 fantasy sports contests in this state. 3 2. A licensee under this section shall establish, subject to 4 commission approval, internet fantasy sports contest rules that 5 specify the prizes and awards offered to winning participants 6 in an internet fantasy sports contest, the effect of changes 7 in the scheduling of an event subject to an internet fantasy 8 sports contest, and the source of the information used to 9 determine the outcome of an internet fantasy sports contest. 10 The internet fantasy sports contest rules shall be displayed on 11 the internet site or mobile application used by the licensee 12 to conduct internet fantasy sports contests and included in 13 the terms and conditions of the licensee’s system to conduct 14 internet fantasy sports contests. 15 3. A licensed internet fantasy sports contest service 16 provider shall use commercially reasonable methods to comply 17 with all of the following requirements: 18 a. Prevent employees of the internet fantasy sports contest 19 service provider and relatives living in the same household of 20 such employees from competing in any internet fantasy sports 21 contest on the service provider’s digital platform in which the 22 service provider offers a cash prize to the public. 23 b. Verify that an internet fantasy sports contest player 24 located in this state is twenty-one years of age or older. 25 c. Ensure that coaches, officials, players, contestants, 26 or other individuals who participate in a game or contest 27 that is the subject of an internet fantasy sports contest are 28 restricted from entering an internet fantasy sports contest in 29 which the outcome is determined, in whole or in part, by the 30 accumulated statistical results of a team of individuals in the 31 game or contest in which they participate. 32 d. Allow individuals to restrict themselves from entering 33 an internet fantasy sports contest conducted by the internet 34 fantasy sports contest service provider upon request and take 35 -16- LSB 2452HV (3) 88 ec/rn 16/ 31
H.F. 648 reasonable steps to prevent those individuals from entering 1 any internet fantasy sports contests conducted by the internet 2 fantasy sports contest service provider. 3 e. Allow individuals to establish an account with an 4 internet fantasy sports contest service provider by utilizing 5 electronic communication. 6 f. Disclose the number of entries a single internet fantasy 7 sports contest player may submit to each internet fantasy 8 sports contest and take reasonable steps to prevent players 9 from submitting more than the allowable number of entries for 10 that internet fantasy sports contest. 11 g. Segregate internet fantasy sports contest player funds 12 from operational funds or maintain a reserve in the form of 13 cash, cash equivalents, an irrevocable letter of credit, 14 payment processor reserves and receivables, a bond, or a 15 combination thereof in the amount of the deposits in internet 16 fantasy sports contest player accounts for the benefit and 17 protection of internet fantasy sports contest player funds held 18 in internet fantasy sports contest accounts by the internet 19 fantasy sports contest service provider. 20 h. Conduct an annual audit under section 99E.9. 21 i. Pay the tax as provided in section 99E.6. 22 4. The annual renewal fee for a license to conduct internet 23 fantasy sports contests shall be five thousand dollars. Moneys 24 collected by the commission from the annual renewal fee for 25 a license paid under this subsection shall be considered 26 repayment receipts as defined in section 8.2. 27 5. a. A licensed internet fantasy sports contest service 28 provider shall pay a regulatory fee to the commission. The 29 regulatory fee shall be established by the commission based on 30 the costs of administering and enforcing this chapter. 31 b. A licensed internet fantasy sports contest service 32 provider shall receive a credit for the amount of the 33 regulatory fee paid by the provider against the taxes to be 34 paid pursuant to section 99E.6. 35 -17- LSB 2452HV (3) 88 ec/rn 17/ 31
H.F. 648 c. Notwithstanding section 8.60, the portion of the fee 1 paid pursuant to paragraph “a” relating to the costs of the 2 commission shall be deposited into the gaming regulatory 3 revolving fund established in section 99F.20. 4 6. Upon a violation of any of the conditions listed in 5 section 99E.4 or this section by a licensee, the commission 6 shall immediately revoke the license. 7 Sec. 28. NEW SECTION . 99E.6 Internet fantasy sports contest 8 tax —— rate. 9 A tax is imposed on internet fantasy sports contest adjusted 10 revenues received each fiscal year by an internet fantasy 11 sports contest service provider from internet fantasy sports 12 contests authorized under this chapter at the rate of six and 13 three-quarters percent. The taxes imposed by this section 14 for internet fantasy sports contests authorized under this 15 chapter shall be paid by the internet fantasy sports contest 16 service provider to the treasurer of state as determined by the 17 commission and shall be credited as provided in section 8.57, 18 subsection 5. 19 Sec. 29. NEW SECTION . 99E.7 Internet fantasy sports 20 contests —— age restrictions. 21 A person under the age of twenty-one years shall not enter an 22 internet fantasy sports contest. A person who violates this 23 section with respect to entering an internet fantasy sports 24 contest commits a scheduled violation under section 805.8C, 25 subsection 12. 26 Sec. 30. NEW SECTION . 99E.8 Licensees —— records —— reports 27 —— confidentiality. 28 1. An internet fantasy sports contest service provider 29 shall keep its books and records so as to clearly show the 30 internet fantasy sports contest adjusted revenues for each 31 internet fantasy sports contest subject to tax in this state. 32 2. a. The licensee shall furnish to the commission reports 33 and information as the commission may require with respect to 34 the licensee’s activities. 35 -18- LSB 2452HV (3) 88 ec/rn 18/ 31
H.F. 648 b. A licensee shall promptly report to the commission any 1 criminal or disciplinary proceedings commenced against the 2 licensee or its employees in connection with the licensee 3 conducting an internet fantasy sports contest, any abnormal 4 contest activity or patterns that may indicate a concern about 5 the integrity of an internet fantasy sports contest, and any 6 other conduct with the potential to corrupt an outcome of an 7 internet fantasy sports contest for purposes of financial gain, 8 including but not limited to match fixing, and suspicious or 9 illegal internet fantasy sports contest activities, including 10 the use of funds derived from illegal activity, deposits of 11 money to enter an internet fantasy sports contest to conceal 12 or launder funds derived from illegal activity, use of agents 13 to enter an internet fantasy sports contest, or use of false 14 identification. The commission is authorized to share any 15 information received pursuant to this paragraph with any law 16 enforcement entity, sports team, sports governing body, or 17 regulatory agency the commission deems appropriate. 18 3. Except as provided in subsection 4, the books and records 19 kept by a licensee as provided by this section are public 20 records and the examination, publication, and dissemination of 21 the books and records are governed by the provisions of chapter 22 22. 23 4. The records of the commission shall be governed by the 24 provisions of chapter 22, provided that, in addition to records 25 that may be kept confidential pursuant to section 22.7, the 26 following records provided by a licensee to the commission 27 shall be kept confidential, unless otherwise ordered by a 28 court, by the lawful custodian of the records, or by another 29 person duly authorized to release such information: 30 a. Patron and customer records. 31 b. Security reports and network audits. 32 c. Internal control and compliance records. 33 d. Employee records. 34 e. Marketing expenses. 35 -19- LSB 2452HV (3) 88 ec/rn 19/ 31
H.F. 648 f. Supplemental schedules to the certified audit, except for 1 those books and records as described in subsection 1 of this 2 section, that are obtained by the commission in connection with 3 the annual audit under section 99E.9. 4 g. Any information specifically requested for inspection by 5 the commission or a representative of the commission. 6 Sec. 31. NEW SECTION . 99E.9 Annual audit of licensee 7 operations. 8 Within ninety days after the end of the licensee’s fiscal 9 year, the licensee shall transmit to the commission an audit 10 of the licensee’s total gambling operations, including an 11 itemization of all expenses and subsidies. Each audit shall 12 be conducted by a certified public accountant authorized to 13 practice in the state of Iowa under chapter 542 who is selected 14 by the licensee and approved by the commission. 15 Sec. 32. NEW SECTION . 99E.10 Civil penalty. 16 A person who willfully fails to comply with the requirements 17 of this chapter and the rules adopted pursuant to chapter 17A 18 under this chapter shall be liable for a civil penalty of 19 not more than one thousand dollars for each violation, not 20 to exceed ten thousand dollars for violations arising out of 21 the same transaction or occurrence, which shall accrue to the 22 state and may be recovered in a civil action brought by the 23 commission. 24 Sec. 33. Section 99F.2, Code 2019, is amended to read as 25 follows: 26 99F.2 Scope of provisions. 27 This chapter does not apply to the pari-mutuel system of 28 wagering used or intended to be used in connection with the 29 horse-race or dog-race meetings as authorized under chapter 30 99D , internet fantasy sports contests authorized under chapter 31 99E, lottery or lotto games authorized under chapter 99G , or 32 bingo or games of skill or chance authorized under chapter 99B . 33 Sec. 34. Section 99F.4B, Code 2019, is amended to read as 34 follows: 35 -20- LSB 2452HV (3) 88 ec/rn 20/ 31
H.F. 648 99F.4B Rules. 1 The department of inspections and appeals shall cooperate 2 to the maximum extent possible with the division of criminal 3 investigation in adopting rules relating to the gaming 4 operations in this chapter and chapter chapters 99D and 99E . 5 Sec. 35. Section 232C.4, subsection 3, Code 2019, is amended 6 to read as follows: 7 3. An emancipated minor shall remain subject to voting 8 restrictions under chapter 48A , gambling restrictions under 9 chapter 99B , 99D , 99F , 99G , or 725 , internet fantasy sports 10 contest restrictions under chapter 99E, alcohol restrictions 11 under chapter 123 , compulsory attendance requirements under 12 chapter 299 , and cigarette tobacco restrictions under chapter 13 453A . 14 Sec. 36. Section 714B.10, subsection 1, Code 2019, is 15 amended to read as follows: 16 1. Advertising by sponsors registered pursuant to chapter 17 557B , licensed pursuant to chapter 99B , or regulated pursuant 18 to chapter 99D , 99E, 99F , or 99G . 19 Sec. 37. Section 725.15, Code 2019, is amended to read as 20 follows: 21 725.15 Exceptions for legal gambling. 22 Sections 725.5 through 725.10 and 725.12 do not apply to 23 a game, activity, ticket, or device when lawfully possessed, 24 used, conducted, or participated in pursuant to chapter 99B , 25 99E, 99F , or 99G . 26 Sec. 38. Section 805.8C, Code 2019, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 12. Internet fantasy sports contest 29 violations. For violations of legal age for entering an 30 internet fantasy sports contest under section 99E.7, the 31 scheduled fine is five hundred dollars. Failure to pay the 32 fine by a person under the age of eighteen shall not result in 33 the person being detained in a secure facility. 34 Sec. 39. TRANSITIONAL LICENSE. Notwithstanding any 35 -21- LSB 2452HV (3) 88 ec/rn 21/ 31
H.F. 648 provisions of chapter 99E as enacted by this Act to the 1 contrary, a person granted a license or registration by two or 2 more states to conduct internet fantasy sports contests may 3 apply for and shall be granted a transitional license by the 4 racing and gaming commission to conduct internet fantasy sports 5 contests in this state subject to the requirements of chapter 6 99E, as enacted by this Act. The transitional license shall 7 be valid until the earlier of the date the racing and gaming 8 commission grants or denies a license under section 99E.5 to 9 the person to conduct internet fantasy sports contests, or 10 twelve months from the date the racing and gaming commission 11 accepts applications for issuance of a license to conduct 12 internet fantasy sports contests under section 99E.5. 13 Sec. 40. EMERGENCY RULES. The state racing and gaming 14 commission created under section 99D.5 may adopt emergency 15 rules under section 17A.4, subsection 3, and section 17A.5, 16 subsection 2, paragraph “b”, to implement the provisions of 17 this division of this Act and the rules shall be effective 18 immediately upon filing unless a later date is specified in the 19 rules. Any rules adopted in accordance with this section shall 20 also be published as a notice of intended action as provided 21 in section 17A.4. 22 Sec. 41. IMPLEMENTATION. The racing and gaming commission 23 shall not implement this division of this Act until the date 24 the commission has adopted rules pursuant to chapter 17A 25 providing for such implementation and such rules have become 26 effective. 27 Sec. 42. EFFECTIVE DATE. This division of this Act, being 28 deemed of immediate importance, takes effect upon enactment. 29 DIVISION III 30 SOCIAL SPORTS GAMBLING 31 Sec. 43. Section 99B.41, Code 2019, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 1A. “Social fantasy sports contest” means 34 any fantasy or simulated game or contest in which the value 35 -22- LSB 2452HV (3) 88 ec/rn 22/ 31
H.F. 648 of all prizes and awards offered to winning participants are 1 established and made known to the participants in advance of 2 the contest and do not exceed a total of one thousand dollars 3 or equivalent consideration, all winning outcomes reflect 4 the relative knowledge and skill of the participants and 5 shall be determined by accumulated statistical results of 6 the performance of individuals in events occurring over more 7 than a twenty-four-hour period, including athletes in the case 8 of sporting events, and no winning outcome is based on the 9 score, point spread, or any performance or performances of 10 any single actual team or solely on any single performance of 11 an individual athlete or player in any single actual event. 12 “Social fantasy sports contest” does not include an internet 13 fantasy sports contest as defined in section 99E.1. 14 Sec. 44. Section 99B.45, subsection 2, Code 2019, is amended 15 by adding the following new paragraph: 16 NEW PARAGRAPH . c. A social fantasy sports contest. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill authorizes sports gambling and wagering, including 21 sports betting and fantasy sports contests. 22 LICENSED SPORTS BETTING. This division authorizes and 23 licenses sports betting. 24 Code section 99F.1, concerning definitions, is amended. The 25 bill defines “sports betting” as wagering on an authorized 26 sporting event by any system of wagering as authorized by 27 the racing and gaming commission (commission) and defines 28 “authorized sporting event” to include professional and 29 collegiate sporting events and international team and 30 individual sporting events governed by the international 31 olympic committee in which no participant is under 18 years 32 of age. The definition of “licensee” is amended to include a 33 person licensed to conduct sports betting. The bill defines 34 “sports betting net receipts” as gross receipts less winnings 35 -23- LSB 2452HV (3) 88 ec/rn 23/ 31
H.F. 648 paid to wagerers on sports betting. “Sports betting wagering 1 area” is defined as an area, as designated by the commission, 2 in which sports betting is conducted. 3 Code sections 99D.7(23) and 99F.4(22), concerning persons 4 voluntarily excluded from wagering or gaming areas, are amended 5 to include internet fantasy sports contests, advance deposits 6 wagering, advance deposit sports betting wagering, and the 7 sports betting wagering area. 8 Code section 99F.3, concerning authorized wagering under 9 Code chapter 99F, is amended to authorize sports betting. 10 Code section 99F.4, concerning racing and gaming commission 11 powers, is amended to authorize the operation of sports betting 12 in a sports betting wagering area on an excursion gambling 13 boat which is also licensed to serve alcoholic beverages and 14 grants the racing and gaming commission the authority to adopt 15 standards under which sports betting is conducted including 16 the scope and type of wagers allowed. The bill provides that 17 revenue received by the commission from license fees for sports 18 betting shall be deposited in the general fund of the state 19 and revenue received by the commission from regulatory fees 20 shall be deposited into the gaming regulatory revolving fund 21 established in Code section 99F.20. 22 New Code section 99F.7A provides specific requirements 23 relative to the licensing, operation, and fees applicable to 24 sports betting. 25 The bill provides that the commission shall, upon payment 26 of an initial license fee of $15,000, issue a license to 27 conduct sports betting to a licensee authorized to conduct 28 gambling games at a pari-mutuel racetrack enclosure or a 29 licensee authorized to operate an excursion gambling boat or 30 gambling structure. The bill provides that the annual renewal 31 fee for a license shall also be $15,000. The bill provides 32 that a licensee establish, and display and post, sports 33 betting wagering rules specifying the amounts to be paid on 34 winning wagers, the effect of changes in the scheduling of an 35 -24- LSB 2452HV (3) 88 ec/rn 24/ 31
H.F. 648 authorized sporting event, and the source of information used 1 to determine the outcome of a wager. The new Code section also 2 provides that a licensee shall include on the internet site 3 or mobile application used by the licensee to conduct advance 4 deposit sports betting wagering the statewide telephone number 5 authorized by the Iowa department of public health to provide 6 problem gambling information and extensive responsible gaming 7 features. The bill also provides that a licensee issued a 8 license to conduct sports betting shall employ commercially 9 reasonable steps to prohibit coaches, athletic trainers, 10 officials, players, participants, or other persons employed in 11 a position with direct involvement with such individuals from 12 sports betting under Code chapter 99F. 13 Code section 99F.8, concerning licensee bonding 14 requirements, is amended to make such requirements applicable 15 to sports betting. 16 Code section 99F.9, concerning wagering on gambling games, 17 is amended to allow the commission to authorize gambling game 18 licensees under Code chapter 99F to conduct advance deposit 19 sports betting wagering. The bill also allows a licensee 20 under Code section 99F.7A to enter into an agreement with an 21 advance deposit sports betting wagering operator licensed 22 by the commission to provide advance deposit sports betting 23 wagering for the licensee and allows the commission to require 24 the advance deposit sports betting wagering operator to 25 conduct an audit. The bill would allow for an advance deposit 26 sports betting wager to be placed in person at a licensed 27 facility authorized to conduct gambling games or from any other 28 location by telephone or other electronic means. The bill 29 defines “advance deposit sports betting wagering” as a form 30 of wagering where an eligible individual creates an account 31 with a licensee, deposits money into that account, and can 32 use the balance within the account for sports betting. The 33 bill defines an “eligible individual” for purposes of advance 34 deposit sports betting wagering as an individual 21 years 35 -25- LSB 2452HV (3) 88 ec/rn 25/ 31
H.F. 648 of age or older who is located within this state. The bill 1 provides that an unlicensed person taking sports betting wagers 2 from Iowa residents is guilty of a class “D” felony, punishable 3 by confinement for no more than five years and a fine of at 4 least $750 but not more than $7,500. The Code section is also 5 amended to provide that a person under the age of 21 shall 6 not make or attempt to make a wager by advance deposit sports 7 wagering. 8 Code section 99F.11, concerning the wagering tax, is 9 amended. The bill provides that sports betting net receipts 10 received each fiscal year by a licensed operator from sports 11 betting shall be taxed at the rate of six and three-quarters 12 percent. The taxes imposed shall be paid by the licensed 13 operator to the treasurer of state as determined by the 14 commission and shall be credited as provided in Code section 15 8.57, subsection 5. 16 Code section 99F.12, concerning certain required reports 17 and records of licensees, is amended to provide that a sports 18 betting licensee shall promptly report to the commission any 19 criminal or disciplinary proceedings commenced against the 20 licensee, any abnormal sports wagering activity, and any other 21 conduct with the potential to corrupt a wagering outcome of an 22 authorized sporting event. The bill requires the commission to 23 share any information received with any law enforcement entity, 24 sports team, sports governing body, or regulatory agency the 25 commission deems appropriate. 26 Code section 99F.15, concerning certain prohibited 27 activities and penalties, is amended to provide that current 28 prohibitions on cheating at a gambling game, claiming anything 29 of value from a gambling game with intent to defraud, and 30 knowingly enticing a person to go where a gambling game is 31 conducted in violation of Code chapter 99F also applies to 32 sports betting. 33 Code section 99F.20, concerning the gaming regulatory 34 revolving fund, is amended to provide that regulatory fees 35 -26- LSB 2452HV (3) 88 ec/rn 26/ 31
H.F. 648 by an internet fantasy sports contest service provider and 1 by a licensee authorized to conduct sports wagering shall be 2 deposited in the fund. 3 This division of the bill takes effect upon enactment. 4 However, the bill authorizes the racing and gaming commission 5 to adopt emergency rules to implement the bill and provides 6 that the racing and gaming commission shall not implement 7 this division of the bill until the date the commission has 8 adopted rules pursuant to Code chapter 17A providing for such 9 implementation and such rules have become effective. 10 INTERNET FANTASY SPORTS CONTESTS. This division of the bill 11 authorizes internet fantasy sports contests and provides for 12 the licensing, regulation, and taxation of internet fantasy 13 sports contests. 14 Code section 80.25, concerning gaming investigation and 15 enforcement by the division of criminal investigation of 16 the department of public safety, is amended to provide for 17 investigation and enforcement concerning the new Code chapter. 18 New Code section 99E.1 provides for definitions. A “fantasy 19 sports contest” is defined as any fantasy or simulated game 20 or contest in which all prizes and awards offered to winning 21 participants are established and made known in advance of the 22 contest, all winning outcomes reflect the relative knowledge 23 and skill of the participants and are determined predominantly 24 by accumulated statistical results of the performance of 25 individuals, and no winning outcome is based on the score, or 26 performance of any single actual team or combination of such 27 teams or solely on any single performance of an individual 28 athlete in any single actual sporting or other event. An 29 “internet fantasy sports contest” is defined as a method of 30 entering a fantasy sports contest by establishing an account 31 with an internet fantasy sports contest service provider. An 32 “internet fantasy sports contest player” is defined as a person 33 who is at least 21 years of age who participates in an internet 34 fantasy sports contest. The bill also defines “internet 35 -27- LSB 2452HV (3) 88 ec/rn 27/ 31
H.F. 648 fantasy sports contest adjusted revenues”, “internet fantasy 1 sports contest service provider”, “licensee”, and “location 2 percentage”. 3 New Code section 99E.2 provides that the system of entering 4 an internet fantasy sports contest is legal when conducted by a 5 licensed internet fantasy sports contest service provider as 6 provided in the new Code chapter. 7 New Code section 99E.3 establishes the powers of the racing 8 and gaming commission in relation to internet fantasy sports 9 contests and internet fantasy sports contest service providers. 10 Specifically, the Code section authorizes the commission 11 to investigate and license internet fantasy sports contest 12 service providers, assess fines and revoke or suspend licenses, 13 impose penalties for violations of the Code chapter, and take 14 any other action to enforce the requirements of the new Code 15 chapter. 16 New Code section 99E.4 establishes the requirements for an 17 applicant to be granted a license to conduct internet fantasy 18 sports contests. The Code section allows the commission 19 to charge the applicant a fee for the department of public 20 safety, division of criminal investigation, to defray the 21 costs associated with any investigation. The new Code 22 section provides that a license shall not be issued if there 23 is evidence that the applicant has failed to meet certain 24 qualifying requirements. The Code section provides that a 25 person who knowingly makes a false statement on the application 26 is guilty of an aggravated misdemeanor. 27 New Code section 99E.5 establishes the terms and conditions 28 of licenses issued to conduct internet fantasy sports contests. 29 The Code section provides that a license may be issued for 30 a period of not more than three years and provides for an 31 initial and annual license fee of $5,000. The Code section 32 also provides for the payment of a regulatory fee to be set 33 by the racing and gaming commission based on the costs of 34 administering and enforcing the new Code chapter. The Code 35 -28- LSB 2452HV (3) 88 ec/rn 28/ 31
H.F. 648 section provides that a licensee establish, and display and 1 post, internet fantasy sports contest rules specifying the 2 amounts to be paid to winning participants, the effect of 3 changes in the scheduling of an event subject to an internet 4 fantasy sports contest, and the source of information used to 5 determine the outcome of an internet fantasy sports contest. 6 The Code section further provides that each licensee shall 7 receive a credit for the amount of the regulatory fee paid 8 against taxes to be paid pursuant to the new Code chapter. The 9 Code section provides that a licensed internet fantasy sports 10 contest service provider shall use commercially reasonable 11 methods to prevent any employees and certain family members 12 from participating in internet fantasy sports contests on the 13 service provider’s digital platform, verify that internet 14 fantasy sports contest players located in this state are 21 15 or older, ensure that participants in a game or contest shall 16 not be allowed to enter an internet fantasy sports contest 17 involving that game or contest, permit individuals to establish 18 an account with an internet fantasy sports contest service 19 provider by electronic communication and to restrict themselves 20 from entering an internet fantasy sports contest, conduct an 21 annual audit, and pay the tax imposed by the new Code chapter. 22 New Code section 99E.6 provides for a tax of six and 23 three-quarters percent on internet fantasy sports contest 24 adjusted revenues. The bill defines “internet fantasy sports 25 contest adjusted revenues” as the total of fees and charges 26 collected, less winnings, in an internet fantasy sports contest 27 multiplied by the percentage of fees and charges paid by 28 participants who are located in this state in that contest. 29 The taxes imposed shall be paid by the internet fantasy 30 sports contest service provider to the treasurer of state as 31 determined by the commission and shall be credited as provided 32 in Code section 8.57, subsection 5. 33 New Code section 99E.7 provides that a person under the 34 age of 21 shall not enter an internet fantasy sports contest. 35 -29- LSB 2452HV (3) 88 ec/rn 29/ 31
H.F. 648 A person who violates this Code section commits a scheduled 1 violation under Code section 805.8C and is subject to a $500 2 fine. Code section 805.8C is amended to reflect this violation 3 and applicable fine. 4 New Code section 99E.8 requires an internet fantasy sports 5 contest service provider to keep books and records on internet 6 fantasy sports contest adjusted revenues and to provide the 7 commission reports and information as the commission may 8 require. The bill provides that a licensee promptly report 9 to the commission any criminal or disciplinary proceedings 10 commenced against the licensee, any abnormal fantasy sports 11 contest activity, and any other conduct with the potential to 12 corrupt an outcome of an internet fantasy sports contest. The 13 bill requires the commission to share any information received 14 with any law enforcement entity, sports team, sports governing 15 body, or regulatory agency the commission deems appropriate. 16 New Code section 99E.9 requires a licensee to conduct an 17 audit within 90 days after the end of the licensee’s fiscal 18 year. 19 New Code section 99E.10 establishes civil penalties. The 20 new Code section provides that a person who willfully fails to 21 comply with the requirements of this new Code chapter shall be 22 liable for a civil penalty of not more than $1,000 for each 23 violation, not to exceed $10,000 for violations arising out of 24 the same transaction or occurrence. 25 The bill also makes changes to Code sections 99F.2, 99F.4B, 26 232C.4, 714B.10, and 725.15 to provide that provisions in those 27 Code sections that list some or all Code chapters that govern 28 lawful gambling also list the new Code chapter provided in this 29 division of the bill. 30 The bill provides for the issuance of a transitional license 31 by the racing and gaming commission to a person to conduct 32 internet fantasy sports contests in this state if the person 33 has been granted a license or registration by two or more other 34 states to conduct internet fantasy sports contests. The bill 35 -30- LSB 2452HV (3) 88 ec/rn 30/ 31
H.F. 648 provides that the transitional license shall be valid until the 1 earlier of the date the commission grants or denies a license 2 to the person or 12 months from the date the commission accepts 3 applications for issuance of a license. 4 This division of the bill takes effect upon enactment. 5 However, the bill authorizes the racing and gaming commission 6 to adopt emergency rules to implement this division of the 7 bill and provides that the racing and gaming commission shall 8 not implement the bill until the date the commission has 9 adopted rules pursuant to Code chapter 17A providing for such 10 implementation and such rules have become effective. 11 SOCIAL SPORTS GAMBLING. This division concerns social 12 gambling authorized under Code chapter 99B. Code section 13 99B.45, concerning social gambling between individuals, is 14 amended to authorize social gambling on social fantasy sports 15 contests. Code section 99B.41 is amended to define “social 16 fantasy sports contest” as a fantasy sports contest in which 17 prizes and awards offered to winning participants do not exceed 18 $1,000 and winning outcomes are based on the performance of 19 individuals in events occurring over more than a 24-hour 20 period. Current law limits wins or losses on social gambling 21 to $200. 22 -31- LSB 2452HV (3) 88 ec/rn 31/ 31
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