Bill Text: IA SSB1168 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act relating to gambling regulation and wagering, by providing for sports wagering and fantasy sports contests, providing for taxes and fees, making penalties applicable, and including implementation and effective date provisions.

Spectrum: Partisan Bill (? 1-0)

Status: (N/A) 2019-02-20 - Subcommittee recommends passage. [SSB1168 Detail]

Download: Iowa-2019-SSB1168-Introduced.html
Senate Study Bill 1168 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON SMITH) A BILL FOR An Act relating to gambling regulation and wagering, by 1 providing for sports wagering and fantasy sports contests, 2 providing for taxes and fees, making penalties applicable, 3 and including implementation and effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2133XC (11) 88 ec/rn
S.F. _____ DIVISION I 1 SPORTS WAGERING 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 7 as defined in section 99E.1, from advance deposit sports 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 wagering area , as defined in section 99F.1 , of all other 11 licensed facilities under this chapter and chapter 99F as 12 provided in this subsection . The process shall provide that 13 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 2133XC (11) 88 ec/rn 1/ 28
S.F. _____ 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 15 a professional sporting event, collegiate sporting event, 16 international sporting event, professional motor race event, or 17 any other minor league or amateur sporting event as authorized 18 by the commission pursuant to section 99F.7A, subsection 19 3. “Authorized sporting event” does not include a race as 20 defined in section 99D.2, a fantasy sports contest as defined 21 in section 99E.1, or any athletic event or competition of an 22 interscholastic sport as defined in section 9A.102. 23 NEW SUBSECTION . 4A. “Collegiate sporting event” means an 24 athletic event or competition of an intercollegiate sport as 25 defined in section 9A.102. 26 NEW SUBSECTION . 16A. “International sporting event” means 27 an international team or individual sporting event governed by 28 an international sports federation or sports governing body, 29 including sporting events governed by the international olympic 30 committee and the international federation of association 31 football. 32 NEW SUBSECTION . 18A. “Minor league sporting event” means 33 a sporting event conducted by a sports league which is not 34 regarded as the premier league in the sport as determined by 35 -2- LSB 2133XC (11) 88 ec/rn 2/ 28
S.F. _____ the commission. 1 NEW SUBSECTION . 19A. “Professional sporting event” means an 2 event, excluding a minor league sporting event, at which two 3 or more persons participate in sports or athletic events and 4 receive compensation in excess of actual expenses for their 5 participation in such event. 6 NEW SUBSECTION . 23. “Sports wagering” means the acceptance 7 of wagers on an authorized sporting event by any system of 8 wagering as authorized by the commission. 9 NEW SUBSECTION . 24. “Sports wagering area” means an area, 10 as designated by the commission, in which sports wagering is 11 conducted. 12 NEW SUBSECTION . 25. “Sports wagering net receipts” means 13 the gross receipts less winnings paid to wagerers on sports 14 wagering. 15 Sec. 4. Section 99F.1, subsection 17, Code 2019, is amended 16 to read as follows: 17 17. “Licensee” means any person licensed under section 99F.7 18 or 99F.7A . 19 Sec. 5. Section 99F.3, Code 2019, is amended to read as 20 follows: 21 99F.3 Gambling games and sports wagering authorized. 22 The system of wagering on a gambling game and sports wagering 23 as provided by this chapter is legal, when conducted on an 24 excursion gambling boat, gambling structure, or racetrack 25 enclosure at authorized locations by a licensee as provided in 26 this chapter . 27 Sec. 6. Section 99F.4, subsections 3 and 22, Code 2019, are 28 amended to read as follows: 29 3. To adopt standards under which all excursion gambling 30 boat operations shall be held and standards for the facilities 31 within which the gambling operations are to be held. The 32 commission may authorize the operation of gambling games on 33 an excursion gambling boat and sports wagering in a sports 34 wagering area which is also licensed to sell or serve alcoholic 35 -3- LSB 2133XC (11) 88 ec/rn 3/ 28
S.F. _____ beverages, wine, or beer as defined in section 123.3 . 1 22. To establish a process to allow a person to be 2 voluntarily excluded from advance deposit wagering as defined 3 in section 99D.11, from an internet fantasy sports contest as 4 defined in section 99E.1, from advance deposit sports wagering 5 as defined in section 99F.9, from the gaming floor and sports 6 wagering area of an excursion gambling boat, from the wagering 7 area, as defined in section 99D.2 , and from the gaming floor 8 and sports wagering area of all other licensed facilities under 9 this chapter and chapter 99D as provided in this subsection . 10 The process shall provide that an initial request by a person 11 to be voluntarily excluded shall be for a period of five years 12 or life and any subsequent request following any five-year 13 period shall be for a period of five years or life. The 14 process established shall require that licensees be provided 15 electronic access to names and social security numbers of 16 persons voluntarily excluded through a secured interactive 17 internet site maintained by the commission and information 18 regarding persons voluntarily excluded shall be disseminated 19 to all licensees under this chapter and chapter 99D . The 20 names, social security numbers, and information regarding 21 persons voluntarily excluded shall be kept confidential 22 unless otherwise ordered by a court or by another person 23 duly authorized to release such information. The process 24 established shall also require a person requesting to be 25 voluntarily excluded be provided information compiled by the 26 Iowa department of public health on gambling treatment options. 27 The state and any licensee under this chapter or chapter 99D 28 shall not be liable to any person for any claim which may arise 29 from this process. In addition to any other penalty provided 30 by law, any money or thing of value that has been obtained by, 31 or is owed to, a voluntarily excluded person as a result of 32 wagers made by the person after the person has been voluntarily 33 excluded shall be forfeited by the person and shall be credited 34 to the general fund of the state. 35 -4- LSB 2133XC (11) 88 ec/rn 4/ 28
S.F. _____ Sec. 7. Section 99F.4, Code 2019, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 27. To adopt standards under which all 3 sports wagering is conducted, including the scope and type of 4 wagers allowed, to identify occupations within sports wagering 5 which require licensing, and to adopt standards for licensing 6 and background qualifications for occupations including 7 establishing fees for the occupational license. All revenue 8 received by the commission under this chapter from license fees 9 shall be deposited in the general fund of the state and shall 10 be subject to the requirements of section 8.60. All revenue 11 received by the commission from regulatory fees shall be 12 deposited into the gaming regulatory revolving fund established 13 in section 99F.20. 14 Sec. 8. NEW SECTION . 99F.7A Sports wagering —— license —— 15 terms and conditions —— fees. 16 1. The commission shall, upon payment of an initial license 17 fee of an amount as determined by the general assembly and 18 submission of an application to the commission consistent with 19 the requirements of section 99F.6, issue a license to conduct 20 sports wagering to a licensee authorized to conduct gambling 21 games at a pari-mutuel racetrack enclosure or a licensee 22 authorized to operate an excursion gambling boat or gambling 23 structure, subject to the requirements of this chapter. The 24 annual renewal fee for a license to conduct or operate sports 25 wagering shall be an amount as determined by the general 26 assembly. 27 2. A licensee under this section shall include on the 28 internet site or mobile application used by the licensee to 29 conduct advance deposit sports wagering as authorized in 30 section 99F.9 the statewide telephone number authorized by the 31 Iowa department of public health to provide problem gambling 32 information, extensive responsible gaming features in addition 33 to those described in section 99F.4, subsection 22, and a 34 link to the internet site or mobile application used by an 35 -5- LSB 2133XC (11) 88 ec/rn 5/ 28
S.F. _____ advance deposit wagering operator to conduct advance deposit 1 wagering pursuant to section 99D.11. In addition, a licensee 2 may enter into operating agreements with one or two entities to 3 have up to a total of two individually branded internet sites 4 to conduct advance deposit sports wagering for the licensee, 5 unless one additional operating agreement or individually 6 branded internet site is authorized by the commission. 7 3. Except as provided by this subsection, sports wagering 8 on minor league sporting events or amateur athletic contests 9 or competitions is prohibited. However, the commission shall 10 have the authority, in its sole discretion and upon application 11 to the commission in a manner as provided by the commission, 12 to authorize sports wagering on minor league sporting events 13 or amateur athletic contests or competitions subject to the 14 requirements of this subsection. The application to the 15 commission shall specify what minor league sporting events 16 or amateur athletic contests or competitions the applicant 17 seeks commission authorization for sports wagering. In 18 determining whether to authorize sports wagering pursuant to 19 the requirements of this subsection, the commission shall, at a 20 minimum, consider whether allowing wagers on the results of the 21 sporting events that are the subject of the application will 22 not create a significant risk for manipulation and corruption 23 of the sporting events and will provide a quality and fair 24 wagering experience for bettors. 25 4. A licensee issued a license to conduct sports wagering 26 under this section shall employ commercially reasonable steps 27 to prohibit coaches, athletic trainers, officials, players, or 28 other individuals who participate in an authorized sporting 29 event that is the subject of sports wagering from sports 30 wagering under this chapter. In addition, a licensee shall 31 employ commercially reasonable steps to prohibit persons 32 who are employed in a position with direct involvement with 33 coaches, players, athletic trainers, officials, players, or 34 participants in an authorized sporting event that is the 35 -6- LSB 2133XC (11) 88 ec/rn 6/ 28
S.F. _____ subject of sports wagering from sports wagering under this 1 chapter. 2 Sec. 9. Section 99F.8, Code 2019, is amended to read as 3 follows: 4 99F.8 Bond of licensee. 5 A licensee licensed under section 99F.7 shall post a bond 6 to the state of Iowa before the license is issued in a sum 7 as the commission shall fix, with sureties to be approved by 8 the commission. The bond shall be used to guarantee that the 9 licensee faithfully makes the payments, keeps its books and 10 records and makes reports, and conducts its gambling games and 11 sports wagering in conformity with this chapter and the rules 12 adopted by the commission. The bond shall not be canceled by 13 a surety on less than thirty days’ notice in writing to the 14 commission. If a bond is canceled and the licensee fails to 15 file a new bond with the commission in the required amount on 16 or before the effective date of cancellation, the licensee’s 17 license shall be revoked. The total and aggregate liability 18 of the surety on the bond is limited to the amount specified in 19 the bond. 20 Sec. 10. Section 99F.9, subsection 1, Code 2019, is amended 21 to read as follows: 22 1. Except as permitted in this section , the licensee shall 23 not permit no sports wagering or any form of wagering on 24 gambling games. 25 Sec. 11. Section 99F.9, Code 2019, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 3A. a. For the purposes of this section, 28 unless the context otherwise requires: 29 (1) “Advance deposit sports wagering” means a method of 30 sports wagering in which an eligible individual may, in an 31 account established with a licensee under section 99F.7A, 32 deposit moneys into the account and use the account balance to 33 pay for sports wagering. Prior to January 1, 2021, an account 34 must be established by an eligible individual in person with 35 -7- LSB 2133XC (11) 88 ec/rn 7/ 28
S.F. _____ a licensee. 1 (2) “Advance deposit sports wagering operator” means an 2 advance deposit sports wagering operator licensed by the 3 commission who has entered into an agreement with a licensee 4 under section 99F.7A to provide advance deposit sports 5 wagering. 6 (3) “Eligible individual” means an individual who is at 7 least twenty-one years of age or older who is located within 8 this state. 9 b. The commission may authorize a licensee under section 10 99F.7A to conduct advance deposit sports wagering. An advance 11 deposit sports wager may be placed in person in the sports 12 wagering area, or from any other location via a telephone-type 13 device or any other electronic means. The commission may also 14 issue an advance deposit sports wagering operator license to 15 an entity who complies with this subsection and section 99F.6 16 and may require the advance deposit sports wagering operator to 17 conduct an audit consistent with the requirements of section 18 99F.13. 19 c. An unlicensed person taking or receiving sports wagers 20 from residents of this state is guilty of a class “D” felony. 21 Sec. 12. Section 99F.9, subsection 4, Code 2019, is amended 22 to read as follows: 23 4. A person under the age of twenty-one years shall not make 24 or attempt to make a wager pursuant to subsection 3A or on an 25 excursion gambling boat, gambling structure, or in a racetrack 26 enclosure and shall not be allowed on the gaming floor of 27 an excursion gambling boat or gambling structure or in the 28 wagering area, as defined in section 99D.2 , or on the gaming 29 floor of a racetrack enclosure. However, a person eighteen 30 years of age or older may be employed to work on the gaming 31 floor of an excursion gambling boat or gambling structure or 32 in the wagering area or on the gaming floor of a racetrack 33 enclosure. A person who violates this subsection with respect 34 to making or attempting to make a wager commits a scheduled 35 -8- LSB 2133XC (11) 88 ec/rn 8/ 28
S.F. _____ violation under section 805.8C, subsection 5 , paragraph “a” . 1 Sec. 13. Section 99F.12, subsection 2, Code 2019, is amended 2 to read as follows: 3 2. a. The licensee shall furnish to the commission reports 4 and information as the commission may require with respect to 5 the licensee’s activities. 6 b. A licensee under section 97F.7A shall promptly report 7 to the commission any criminal or disciplinary proceedings 8 commenced against the licensee or its employees in connection 9 with the licensee conducting sports wagering or advance 10 deposit sports wagering, any abnormal wagering activity or 11 patterns that may indicate a concern about the integrity of an 12 authorized sporting event or events, and any other conduct with 13 the potential to corrupt a wagering outcome of an authorized 14 sporting event for purposes of financial gain, including but 15 not limited to match fixing, and suspicious or illegal wagering 16 activities, including the use of funds derived from illegal 17 activity, wagers to conceal or launder funds derived from 18 illegal activity, use of agents to place wagers, or use of 19 false identification. The commission is authorized to share 20 any information received pursuant to this paragraph with any 21 law enforcement entity, sports team, sports governing body, or 22 regulatory agency the commission deems appropriate. 23 c. The gross receipts and adjusted gross receipts from 24 gambling shall be separately handled and accounted for from 25 all other moneys received from operation of an excursion 26 gambling boat or from operation of a racetrack enclosure or 27 gambling structure licensed to conduct gambling games. The 28 commission may designate a representative to board a licensed 29 excursion gambling boat or to enter a racetrack enclosure or 30 gambling structure licensed to conduct gambling games. The 31 representative shall have full access to all places within the 32 enclosure of the boat, the gambling structure, or the racetrack 33 enclosure and shall directly supervise the handling and 34 accounting of all gross receipts and adjusted gross receipts 35 -9- LSB 2133XC (11) 88 ec/rn 9/ 28
S.F. _____ from gambling. The representative shall supervise and check 1 the admissions. The compensation of a representative shall be 2 fixed by the commission but shall be paid by the licensee. 3 Sec. 14. Section 99F.15, subsection 1, paragraph c, Code 4 2019, is amended to read as follows: 5 c. Acting, or employing a person to act, as a shill or 6 decoy to encourage participation in a gambling game or sports 7 wagering . 8 Sec. 15. Section 99F.15, subsection 4, paragraphs d, h, and 9 i, Code 2019, are amended to read as follows: 10 d. Cheats at a gambling game, including but not limited to 11 committing any act which alters the outcome of the game , or 12 cheats at sports wagering . 13 h. Claims, collects, or takes, or attempts to claim, 14 collect, or take, money or anything of value in or from the 15 gambling games or sports wagering , with intent to defraud, 16 without having made a wager contingent on winning a gambling 17 game or sports wager , or claims, collects, or takes an amount 18 of money or thing of value of greater value than the amount 19 won. 20 i. Knowingly entices or induces a person to go to any place 21 where a gambling game or sports wagering is being conducted or 22 operated in violation of the provisions of this chapter with 23 the intent that the other person plays or participates in that 24 gambling game or sports wagering . 25 Sec. 16. Section 99F.20, subsection 1, Code 2019, is amended 26 to read as follows: 27 1. A gaming regulatory revolving fund is created in 28 the state treasury under the control of the department of 29 inspections and appeals. The fund shall consist of fees 30 collected and deposited into the fund paid by licensees 31 pursuant to section 99D.14, subsection 2 , paragraph “c” , fees 32 paid by licensees pursuant to section 99E.5, subsection 4, 33 paragraph “c” , regulatory fees paid by licensees pursuant 34 to section 99F.4, subsection 27, and fees paid by licensees 35 -10- LSB 2133XC (11) 88 ec/rn 10/ 28
S.F. _____ pursuant to section 99F.10, subsection 4 , paragraph “c” . All 1 costs relating to racetrack, excursion boat, and gambling 2 structure regulation shall be paid from the fund as provided in 3 appropriations made for this purpose by the general assembly. 4 The department shall provide quarterly reports to the 5 department of management and the legislative services agency 6 specifying revenues billed and collected and expenditures 7 from the fund in a format as determined by the department 8 of management in consultation with the legislative services 9 agency. 10 Sec. 17. SPORTS WAGERING TAX —— FEES —— ALLOCATIONS. It is 11 the intent of the general assembly to establish sports wagering 12 licensee fees, a tax on sports wagering net receipts, and to 13 provide for the allocation of revenues derived from the tax. 14 DIVISION II 15 FANTASY SPORTS CONTESTS 16 Sec. 18. NEW SECTION . 99E.1 Definitions. 17 As used in this chapter, unless the context otherwise 18 requires: 19 1. “Applicant” means an internet fantasy sports contest 20 service provider applying for a license to conduct internet 21 fantasy sports contests under this chapter. 22 2. “Commission” means the state racing and gaming commission 23 created under section 99D.5. 24 3. “Fantasy sports contest” includes any fantasy or 25 simulated game or contest in which the fantasy sports contest 26 operator is not a participant in the game or contest, the value 27 of all prizes and awards offered to winning participants are 28 established and made known to the participants in advance 29 of the contest, all winning outcomes reflect the relative 30 knowledge and skill of the participants and shall be determined 31 by accumulated statistical results of the performance of 32 individuals, including athletes in the case of sporting events, 33 and no winning outcome is based on the score, point spread, or 34 any performance or performances of any single actual team or 35 -11- LSB 2133XC (11) 88 ec/rn 11/ 28
S.F. _____ solely on any single performance of an individual athlete or 1 player in any single actual event. 2 4. “Internet fantasy sports contest” means a method of 3 entering a fantasy sports contest by which a person may 4 establish an account with an internet fantasy sports contest 5 service provider, deposit money into the account, and use 6 the account balance for entering a fantasy sports contest by 7 utilizing electronic communication. 8 5. “Internet fantasy sports contest adjusted revenues” means, 9 for each internet fantasy sports contest, the amount equal to 10 the total charges and fees collected from all participants 11 entering the internet fantasy sports contest less winnings paid 12 to participants in the contest, multiplied by the location 13 percentage. 14 6. “Internet fantasy sports contest player” means a person 15 who is at least twenty-one years of age and participates in an 16 internet fantasy sports contest operated by an internet fantasy 17 sports contest service provider. 18 7. “Internet fantasy sports contest service provider” means 19 a person, including a licensee under chapter 99D or 99F, who 20 conducts an internet fantasy sports contest as authorized by 21 this chapter. 22 8. “Location percentage” means, for each internet fantasy 23 sports contest, the percentage, rounded to the nearest tenth of 24 a percent, equal to the total charges and fees collected from 25 all internet fantasy sports contest players located in this 26 state divided by the total charges and fees collected from all 27 participants in the internet fantasy sports contest. 28 Sec. 19. NEW SECTION . 99E.2 Internet fantasy sports 29 contests authorized. 30 The system of entering an internet fantasy sports contest as 31 provided by this chapter is legal when conducted by a licensed 32 internet fantasy sports contest service provider as provided in 33 this chapter. 34 Sec. 20. NEW SECTION . 99E.3 Commission —— powers. 35 -12- LSB 2133XC (11) 88 ec/rn 12/ 28
S.F. _____ 1. The commission shall have full jurisdiction over and 1 shall supervise internet fantasy sports contests and internet 2 fantasy sports contest service providers as governed by this 3 chapter. 4 2. The commission shall have the following powers and shall 5 adopt rules pursuant to chapter 17A to administer and implement 6 this chapter: 7 a. To review and investigate applicants and determine the 8 eligibility of applicants for a license to conduct internet 9 fantasy sports contests, pursuant to rules adopted by the 10 commission. 11 b. To license and regulate internet fantasy sports contest 12 service providers subject to the requirements of this chapter. 13 c. To provide for the prevention of practices detrimental to 14 the public and to provide for the best interests of internet 15 fantasy sports contests. 16 d. To investigate alleged violations of this chapter 17 or the commission rules, orders, or final decisions and to 18 take appropriate disciplinary action against a licensee, or 19 institute appropriate legal action for enforcement, or both. 20 Information gathered during an investigation is confidential 21 during the pendency of the investigation. 22 e. To assess fines and revoke or suspend licenses and to 23 impose penalties for violations of this chapter. 24 f. To take any other action as may be reasonable or 25 appropriate to enforce this chapter and the commission rules. 26 Sec. 21. NEW SECTION . 99E.4 Requirements of applicant —— 27 fee. 28 1. An applicant for a license to conduct internet fantasy 29 sports contests shall complete and sign an application on 30 the form prescribed and published by the commission. The 31 application shall include such information of the applicant 32 that the commission deems necessary for purposes of issuing a 33 license pursuant to this chapter. 34 2. An applicant shall submit fingerprints and information 35 -13- LSB 2133XC (11) 88 ec/rn 13/ 28
S.F. _____ that the commission deems necessary to the commission in the 1 manner prescribed on the application forms. The fingerprints 2 may be submitted to the federal bureau of investigation by 3 the department of public safety through the state criminal 4 history repository for the purpose of a national criminal 5 history check. The results of a criminal history record check 6 conducted pursuant to this subsection shall be considered a 7 confidential record under chapter 22. 8 3. If the commission is not satisfied that it can determine 9 if an applicant meets the requirements necessary for issuing 10 a license pursuant to this chapter, the commission may 11 request the department of public safety, division of criminal 12 investigation, to investigate and obtain the information 13 necessary for the commission to make a determination on whether 14 to issue the applicant a license. 15 4. The commission shall charge the applicant a reasonable 16 fee set by the department of public safety, division of 17 criminal investigation, to defray those costs associated 18 with the fingerprint and national criminal history check 19 requirements of subsection 2 concerning the applicant. In 20 addition, if the commission requests that an additional 21 investigation be conducted by the division of criminal 22 investigation as provided in subsection 3, the commission shall 23 charge the applicant the reasonable costs of this additional 24 investigation. These fees and costs are in addition to any 25 other license fees and costs charged by the commission. The 26 fees and costs may be retained by the department of public 27 safety, division of criminal investigation, and shall be 28 considered repayment receipts as defined in section 8.2. 29 5. The commission shall not grant a license to an applicant 30 if there is substantial evidence that any of the following 31 apply: 32 a. A license issued to the applicant to conduct internet 33 fantasy sports contests in another jurisdiction has been 34 revoked, or a request for a license to conduct internet fantasy 35 -14- LSB 2133XC (11) 88 ec/rn 14/ 28
S.F. _____ sports contests in another jurisdiction has been denied, by 1 an entity licensing persons to conduct such contests in that 2 jurisdiction. 3 b. The applicant has not demonstrated financial 4 responsibility sufficient to adequately meet the requirements 5 of the enterprise proposed. 6 c. The applicant does not adequately disclose the true 7 owners of the enterprise proposed. 8 d. The applicant has knowingly made a false statement of a 9 material fact to the commission. 10 e. The applicant has failed to meet a monetary obligation in 11 connection with conducting an internet fantasy sports contest. 12 f. The applicant is not of good repute and moral character 13 or the applicant has pled guilty to, or has been convicted of, 14 a felony. 15 g. Any member of the board of directors of the applicant is 16 not twenty-one years of age or older. 17 6. A person who knowingly makes a false statement on the 18 application is guilty of an aggravated misdemeanor. 19 7. For the purposes of this section, “applicant” includes 20 each member of the board of directors of an internet fantasy 21 sports contest service provider. 22 Sec. 22. NEW SECTION . 99E.5 Licenses —— fees —— terms and 23 conditions —— revocation. 24 1. If the commission is satisfied that the requirements 25 of this chapter and its rules adopted under this chapter 26 applicable to licensees have been or will be complied with, the 27 commission shall issue a license for a period of not more than 28 three years to an applicant to conduct internet fantasy sports 29 contests in this state. 30 2. A licensed internet fantasy sports contest service 31 provider shall use commercially reasonable methods to comply 32 with all of the following requirements: 33 a. Prevent employees of the internet fantasy sports contest 34 service provider and relatives living in the same household of 35 -15- LSB 2133XC (11) 88 ec/rn 15/ 28
S.F. _____ such employees from competing in any internet fantasy sports 1 contest on the service provider’s digital platform in which the 2 service provider offers a cash prize to the public. 3 b. Verify that an internet fantasy sports contest player 4 located in this state is twenty-one years of age or older. 5 c. Ensure that coaches, officials, players, contestants, 6 or other individuals who participate in a game or contest 7 that is the subject of an internet fantasy sports contest are 8 restricted from entering an internet fantasy sports contest in 9 which the outcome is determined, in whole or in part, by the 10 accumulated statistical results of a team of individuals in the 11 game or contest in which they participate. 12 d. Allow individuals to restrict themselves from entering 13 an internet fantasy sports contest conducted by the internet 14 fantasy sports contest service provider upon request and take 15 reasonable steps to prevent those individuals from entering 16 any internet fantasy sports contests conducted by the internet 17 fantasy sports contest service provider. 18 e. Allow individuals to establish an account with an 19 internet fantasy sports contest service provider by utilizing 20 electronic communication. 21 f. Disclose the number of entries a single internet fantasy 22 sports contest player may submit to each internet fantasy 23 sports contest and take reasonable steps to prevent players 24 from submitting more than the allowable number of entries for 25 that internet fantasy sports contest. 26 g. Segregate internet fantasy sports contest player funds 27 from operational funds or maintain a reserve in the form of 28 cash, cash equivalents, an irrevocable letter of credit, 29 payment processor reserves and receivables, a bond, or a 30 combination thereof in the amount of the deposits in internet 31 fantasy sports contest player accounts for the benefit and 32 protection of internet fantasy sports contest player funds held 33 in internet fantasy sports contest accounts by the internet 34 fantasy sports contest service provider. 35 -16- LSB 2133XC (11) 88 ec/rn 16/ 28
S.F. _____ h. Annually contract with a third party to perform an 1 independent examination, consistent with the attestation 2 standards established by the American institute of certified 3 public accountants, to ensure compliance with all of the 4 requirements in this chapter and submit the results of the 5 independent audit to the commission. The audit shall be 6 submitted to the commission by July 1 of the year following the 7 year subject to the audit. 8 i. Pay the tax as provided in section 99E.6. 9 3. The annual license fee to conduct internet fantasy 10 sports contests shall be an amount as determined by the general 11 assembly. Moneys collected by the commission from the annual 12 license fee paid under this subsection shall be considered 13 repayment receipts as defined in section 8.2. 14 4. a. A licensed internet fantasy sports contest service 15 provider shall pay a regulatory fee to the commission. The 16 regulatory fee shall be established by the commission based on 17 the costs of administering and enforcing this chapter. 18 b. A licensed internet fantasy sports contest service 19 provider shall receive a credit for the amount of the 20 regulatory fee paid by the provider against the taxes to be 21 paid pursuant to section 99E.6. 22 c. Notwithstanding section 8.60, the portion of the fee 23 paid pursuant to paragraph “a” relating to the costs of the 24 commission shall be deposited into the gaming regulatory 25 revolving fund established in section 99F.20. 26 5. Upon a violation of any of the conditions listed in 27 section 99E.4 or this section by a licensee, the commission 28 shall immediately revoke the license. 29 Sec. 23. NEW SECTION . 99E.6 Internet fantasy sports contest 30 tax —— fees —— intent. 31 It is the intent of the general assembly to establish 32 internet fantasy sports contest license fees, a tax on internet 33 fantasy sports contest adjusted revenues, and to provide for 34 the allocation of revenues derived from the tax. 35 -17- LSB 2133XC (11) 88 ec/rn 17/ 28
S.F. _____ Sec. 24. NEW SECTION . 99E.7 Internet fantasy sports 1 contests —— age restrictions. 2 A person under the age of twenty-one years shall not enter an 3 internet fantasy sports contest. A person who violates this 4 section with respect to entering an internet fantasy sports 5 contest commits a scheduled violation under section 805.8C, 6 subsection 12. 7 Sec. 25. NEW SECTION . 99E.8 Division of criminal 8 investigation. 9 If the commission has reasonable cause to believe that 10 a licensee has committed a violation of this chapter, the 11 commission may request the division of criminal investigation 12 of the department of public safety to investigate to determine 13 licensee compliance with the requirements of this chapter. 14 The criminal investigation division and the commission shall 15 cooperate to the maximum extent possible on an investigation. 16 The commission shall assess the licensee the reasonable costs 17 of the investigation conducted by the division of criminal 18 investigation pursuant to a request by the commission under 19 this section. The costs may be retained by the department of 20 public safety, division of criminal investigation, and shall be 21 considered repayment receipts as defined in section 8.2. 22 Sec. 26. NEW SECTION . 99E.9 Civil penalty. 23 A person who willfully fails to comply with the requirements 24 of this chapter and the rules adopted pursuant to chapter 17A 25 under this chapter shall be liable for a civil penalty of not 26 more than one thousand dollars for each violation, not to 27 exceed ten thousand dollars for violations arising out of the 28 same transaction or occurrence, which shall accrue to the state 29 and may be recovered in a civil action. 30 Sec. 27. Section 99F.2, Code 2019, is amended to read as 31 follows: 32 99F.2 Scope of provisions. 33 This chapter does not apply to the pari-mutuel system of 34 wagering used or intended to be used in connection with the 35 -18- LSB 2133XC (11) 88 ec/rn 18/ 28
S.F. _____ horse-race or dog-race meetings as authorized under chapter 1 99D , internet fantasy sports contests authorized under chapter 2 99E, lottery or lotto games authorized under chapter 99G , or 3 bingo or games of skill or chance authorized under chapter 99B . 4 Sec. 28. Section 232C.4, subsection 3, Code 2019, is amended 5 to read as follows: 6 3. An emancipated minor shall remain subject to voting 7 restrictions under chapter 48A , gambling restrictions under 8 chapter 99B , 99D , 99F , 99G , or 725 , internet fantasy sports 9 contest restrictions under chapter 99E, alcohol restrictions 10 under chapter 123 , compulsory attendance requirements under 11 chapter 299 , and cigarette tobacco restrictions under chapter 12 453A . 13 Sec. 29. Section 714B.10, subsection 1, Code 2019, is 14 amended to read as follows: 15 1. Advertising by sponsors registered pursuant to chapter 16 557B , licensed pursuant to chapter 99B , or regulated pursuant 17 to chapter 99D , 99E, 99F , or 99G . 18 Sec. 30. Section 725.15, Code 2019, is amended to read as 19 follows: 20 725.15 Exceptions for legal gambling. 21 Sections 725.5 through 725.10 and 725.12 do not apply to 22 a game, activity, ticket, or device when lawfully possessed, 23 used, conducted, or participated in pursuant to chapter 99B , 24 99E, 99F , or 99G . 25 Sec. 31. Section 805.8C, Code 2019, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 12. Internet fantasy sports contest 28 violations. For violations of legal age for entering an 29 internet fantasy sports contest under section 99E.7, the 30 scheduled fine is five hundred dollars. Failure to pay the 31 fine by a person under the age of eighteen shall not result in 32 the person being detained in a secure facility. 33 DIVISION III 34 GAMBLING REGULATION 35 -19- LSB 2133XC (11) 88 ec/rn 19/ 28
S.F. _____ Sec. 32. Section 99F.6, Code 2019, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 9. The board of directors of a qualified 3 sponsoring organization licensed to operate gambling games 4 under this chapter shall include, as ex officio, nonvoting 5 members of the board, a member of the county board of 6 supervisors and a member of a city council for each county and 7 city that has a licensed gambling games facility operated by 8 the qualified sponsoring organization. The ex officio members 9 shall serve terms of the same duration as voting members of the 10 board. 11 Sec. 33. Section 99F.17A, Code 2019, is amended to read as 12 follows: 13 99F.17A Inspection of gambling Gambling games or implements 14 of gambling —— inspection —— wagering requirements . 15 1. A licensed manufacturer or distributor of gambling games 16 or implements of gambling shall deliver the gambling games or 17 implements of gambling to a location approved by the commission 18 for inspection and approval prior to being placed in operation. 19 Gambling games or implements of gambling acquired pursuant 20 to section 99F.17, subsection 6 , shall be inspected and 21 approved by the commission prior to being placed in operation. 22 Gambling games or implements of gambling passing inspection 23 and receiving approval may then be placed in operation on an 24 excursion gambling boat. 25 2. A licensee that offers gambling games containing a wheel 26 and ball, or virtual simulation, shall have at least one of 27 these games that provide for a house edge under three percent 28 for a single number wager. 29 DIVISION IV 30 EFFECTIVE DATE AND IMPLEMENTATION PROVISIONS 31 Sec. 34. 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 -20- LSB 2133XC (11) 88 ec/rn 20/ 28
S.F. _____ this Act and the rules shall be effective immediately upon 1 filing unless a later date is specified in the rules but in 2 no event earlier than July 4, 2019. Any rules adopted in 3 accordance with this section shall also be published as a 4 notice of intended action as provided in section 17A.4. 5 Sec. 35. IMPLEMENTATION. The racing and gaming commission 6 shall not implement this Act until the later of July 4, 2019, 7 or the date the commission has adopted rules pursuant to 8 chapter 17A providing for such implementation and such rules 9 have become effective. 10 Sec. 36. EFFECTIVE DATE. This Act, being deemed of 11 immediate importance, takes effect upon enactment. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 This bill authorizes wagering on sporting events and fantasy 16 sports contests and amends provisions relating to gambling game 17 regulation. 18 SPORTS WAGERING. Division I of the bill authorizes wagering 19 on certain sporting events and provides for the licensing and 20 regulation of sports wagering. 21 Code section 99F.1, concerning definitions, is amended. The 22 bill defines “sports wagering” as acceptance of wagers on an 23 authorized sporting event by any system of wagering authorized 24 by the commission. 25 The bill defines “authorized sporting event” as a 26 professional sporting event, collegiate sporting event, 27 international sporting event, professional motor race event, or 28 any other minor league or amateur sporting event as authorized 29 by the commission pursuant to the bill. The bill specifically 30 excludes from the definition of “authorized sporting event” a 31 race as defined in Code section 99D.2, a fantasy sports contest 32 as defined in Code section 99E.1 as provided in the bill, or 33 any athletic event or competition of an interscholastic sport 34 as defined in Code section 9A.102. The bill further defines 35 -21- LSB 2133XC (11) 88 ec/rn 21/ 28
S.F. _____ each sporting event included in the definition of authorized 1 sporting event and defines and excludes from the definition of 2 “professional sporting event”, a minor league sporting event. 3 “Sports wagering net receipts” is defined as gross receipts 4 less winnings paid to wagerers on sports wagering. “Sports 5 wagering area” is defined as an area, as designated by the 6 commission, in which sports wagering is conducted. 7 Code sections 99D.7(23) and 99F.4(22), concerning persons 8 voluntarily excluded from wagering or gaming areas, are amended 9 to include internet fantasy sports contests, advance deposit 10 wagering, advance deposit sports wagering, and the sports 11 wagering area. 12 Code section 99F.3, concerning authorized wagering under 13 Code chapter 99F, is amended to authorize sports wagering. 14 Code section 99F.4, concerning racing and gaming commission 15 powers, is amended to authorize the operation of sports 16 wagering in a sports wagering area on an excursion gambling 17 boat which is also licensed to serve alcoholic beverages, 18 grants the racing and gaming commission the authority to adopt 19 standards under which sports wagering is conducted including 20 the scope and type of wagers allowed. The bill provides that 21 revenue received by the commission from license fees for sports 22 wagering shall be deposited in the general fund of the state 23 and revenue received by the commission from regulatory fees 24 shall be deposited into the gaming regulatory revolving fund 25 established in Code section 99F.20. 26 New Code section 99F.7A provides specific requirements 27 relative to the licensing, operation, and fees applicable to 28 sports wagering. 29 The bill provides that the commission shall, upon payment 30 of an initial license fee, issue a license to conduct sports 31 wagering to a licensee authorized to conduct gambling games at 32 a pari-mutuel racetrack enclosure or a licensee authorized to 33 operate an excursion gambling boat or gambling structure. The 34 bill provides for an annual renewal fee. The new Code section 35 -22- LSB 2133XC (11) 88 ec/rn 22/ 28
S.F. _____ also provides that a licensee shall include on the internet 1 site or mobile application used by the licensee to conduct 2 advance deposit sports wagering the statewide telephone number 3 authorized by the Iowa department of public health to provide 4 problem gambling information, extensive responsible gaming 5 features, and a link to the internet site or mobile application 6 used to conduct advance deposit wagering as authorized by Code 7 section 99D.11. The new Code section also provides that the 8 commission, upon application, may authorize sports wagering 9 on minor league sporting events or amateur athletic contests 10 or competitions. The new Code section also provides that a 11 licensee issued a license to conduct sports wagering shall 12 employ commercially reasonable steps to prohibit coaches, 13 athletic trainers, officials, players, participants, or other 14 persons employed in a position with direct involvement with 15 such individuals from sports wagering under Code chapter 99F. 16 Code section 99F.8, concerning licensee bonding 17 requirements, is amended to make such requirements applicable 18 to sports wagering. 19 Code section 99F.9, concerning wagering on gambling games, 20 is amended to allow the commission to authorize gambling game 21 licensees under Code chapter 99F to conduct advance deposit 22 sports wagering. The bill also allows a licensee under Code 23 section 99F.7A to enter into an agreement with an advance 24 deposit sports wagering operator licensed by the commission to 25 provide advance deposit sports wagering for the licensee and 26 allows the commission to require the advance deposit sports 27 wagering operator to conduct an audit. The bill would allow 28 for an advance deposit wager to be placed in person at a 29 licensed facility authorized to conduct gambling games or from 30 any other location by telephone or other electronic means. 31 The bill defines “advance deposit sports wagering” as a form 32 of wagering where an eligible individual creates an account 33 with a licensee, deposits money into that account, and can use 34 the balance within the account for sports wagering. Prior to 35 -23- LSB 2133XC (11) 88 ec/rn 23/ 28
S.F. _____ January 1, 2021, an account must be established in person with 1 a licensee. The bill defines an “eligible individual” for 2 purposes of advance deposit sports wagering as an individual 3 21 years of age or older who is located within this state. The 4 bill provides that an unlicensed person taking sports wagers 5 from Iowa residents is guilty of a class “D” felony, punishable 6 by confinement for no more than five years and a fine of at 7 least $750 but not more than $7,500. The Code section is also 8 amended to provide that a person under the age of 21 shall 9 not make or attempt to make a wager by advance deposit sports 10 wagering. 11 Code section 99F.12, concerning certain required reports 12 and records of licensees, is amended to provide that a sports 13 wagering licensee shall promptly report to the commission any 14 criminal or disciplinary proceedings commenced against the 15 licensee, any abnormal sports wagering activity, and any other 16 conduct with the potential to corrupt a wagering outcome of an 17 authorized sporting event. The bill authorizes the commission 18 to share any information received with any law enforcement 19 entity, sports team, sports governing body, or regulatory 20 agency the commission deems appropriate. 21 Code section 99F.15, concerning certain prohibited 22 activities and penalties, is amended to provide that current 23 prohibitions on cheating at a gambling game, claiming anything 24 of value from a gambling game with intent to defraud, and 25 knowingly enticing a person to go where a gambling game is 26 conducted in violation of Code chapter 99F also applies to 27 sports wagering. 28 Code section 99F.20, concerning the gaming regulatory 29 revolving fund, is amended to provide that regulatory fees 30 by an internet fantasy sports contest service provider and 31 by a licensee authorized to conduct sports wagering shall be 32 deposited in the fund. 33 The bill also provides that it is the intent of the general 34 assembly to establish sports wagering license fees, a tax on 35 -24- LSB 2133XC (11) 88 ec/rn 24/ 28
S.F. _____ sports wagering net receipts, and to provide for the allocation 1 of revenues derived from the tax. 2 FANTASY SPORTS CONTESTS. Division II of the bill authorizes 3 internet fantasy sports contests and provides for the 4 licensing, regulation, and taxation of internet fantasy sports 5 contests. 6 New Code section 99E.1 provides for definitions. A “fantasy 7 sports contest” is defined as any fantasy or simulated game 8 or contest in which all prizes and awards offered to winning 9 participants are established and made known in advance of the 10 contest, all winning outcomes reflect the relative knowledge 11 and skill of the participants and are determined predominantly 12 by accumulated statistical results of the performance of 13 individuals, and no winning outcome is based on the score, or 14 performance of any single actual team or combination of such 15 teams or solely on any single performance of an individual 16 athlete in any single actual sporting or other event. An 17 “internet fantasy sports contest” is defined as a method of 18 entering a fantasy sports contest by establishing an account 19 with an internet fantasy sports contest service provider. An 20 “internet fantasy sports contest player” is defined as a person 21 who is at least 21 years of age who participates in an internet 22 fantasy sports contest. The bill also defines “internet 23 fantasy sports contest adjusted revenues”, “internet fantasy 24 sports contest service provider”, and “location percentage”. 25 New Code section 99E.2 provides that the system of entering 26 an internet fantasy sports contest is legal when conducted by a 27 licensed internet fantasy sports contest service provider as 28 provided in the new Code chapter. 29 New Code section 99E.3 establishes the powers of the racing 30 and gaming commission in relation to internet fantasy sports 31 contests and internet fantasy sports contest service providers. 32 Specifically, the Code section authorizes the commission 33 to investigate and license internet fantasy sports contest 34 service providers, assess fines and revoke or suspend licenses, 35 -25- LSB 2133XC (11) 88 ec/rn 25/ 28
S.F. _____ impose penalties for violations of the Code chapter, and take 1 any other action to enforce the requirements of the new Code 2 chapter. 3 New Code section 99E.4 establishes the requirements for an 4 applicant to be granted a license to conduct internet fantasy 5 sports contests. The Code section allows the commission 6 to charge the applicant a fee for the department of public 7 safety, division of criminal investigation, to defray the 8 costs associated with any investigation. The new Code 9 section provides that a license shall not be issued if there 10 is evidence that the applicant has failed to meet certain 11 qualifying requirements. The Code section provides that a 12 person who knowingly makes a false statement on the application 13 is guilty of an aggravated misdemeanor. 14 New Code section 99E.5 establishes the terms and conditions 15 of licenses issued to conduct internet fantasy sports contests. 16 The Code section provides that a license may be issued for 17 a period of not more than three years and provides for an 18 annual license fee. The Code section also provides for the 19 payment of a regulatory fee to be set by the racing and gaming 20 commission based on the costs of administering and enforcing 21 the new Code chapter. The Code section further provides that 22 each licensee shall receive a credit for the amount of the 23 regulatory fee paid against taxes to be paid pursuant to the 24 new Code chapter. The Code section provides that a licensed 25 internet fantasy sports contest service provider shall use 26 commercially reasonable methods to prevent any employees and 27 certain family members from participating in internet fantasy 28 sports contests on the service provider’s digital platform, 29 verify that internet fantasy sports contest players located 30 in this state are 21 or older, ensure that participants in 31 a game or contest shall not be allowed to enter an internet 32 fantasy sports contest involving that game or contest, permit 33 individuals to establish an account with an internet fantasy 34 sports contest service provider by electronic communication and 35 -26- LSB 2133XC (11) 88 ec/rn 26/ 28
S.F. _____ to restrict themselves from entering an internet fantasy sports 1 contest, perform an independent audit, and pay the tax imposed 2 by the new Code chapter. 3 New Code section 99E.6 provides that it is the intent of 4 the general assembly to establish internet fantasy sports 5 contest license fees and to tax internet fantasy sports contest 6 adjusted revenues. The bill defines, in new Code section 7 99E.1, “internet fantasy sports contest adjusted revenues” as 8 the total of fees and charges collected, less winnings, in an 9 internet fantasy sports contest multiplied by the percentage of 10 fees and charges paid by participants who are located in this 11 state in that contest. 12 New Code section 99E.7 provides that a person under the 13 age of 21 shall not enter an internet fantasy sports contest. 14 A person who violates this Code section commits a scheduled 15 violation under Code section 805.8C and is subject to a $500 16 fine. Code section 805.8C is amended to reflect this violation 17 and applicable fine. 18 New Code section 99E.8 authorizes the division of criminal 19 investigation of the department of public safety to investigate 20 licensee compliance with the requirements of the new Code 21 chapter. 22 New Code section 99E.9 establishes civil penalties. The 23 new Code section provides that a person who willfully fails to 24 comply with the requirements of this new Code chapter shall be 25 liable for a civil penalty of not more than $1,000 for each 26 violation, not to exceed $10,000 for violations arising out of 27 the same transaction or occurrence. 28 The bill also makes changes to Code sections 99F.2, 232C.4, 29 714B.10, and 725.15 to provide that provisions in those Code 30 sections that list some or all Code chapters that govern lawful 31 gambling also lists the new Code chapter provided in this 32 division of the bill. 33 GAMBLING REGULATION. Code section 99F.6 is amended to 34 provide that a qualified sponsoring organization licensed 35 -27- LSB 2133XC (11) 88 ec/rn 27/ 28
S.F. _____ to operate gambling games shall include, as ex officio, 1 nonvoting members of the board, a member of the county board of 2 supervisors and a member of a city council for each county and 3 city that has a licensed gambling games facility operated by 4 the qualified sponsoring organization. 5 Code section 99F.17A, concerning gambling games or 6 implements of gambling, is amended to provide that if a 7 licensee offers gambling games containing a wheel and ball, or 8 virtual simulation, at least one of these games shall provide 9 for a house edge under 3 percent for a single number wager. 10 EFFECTIVE DATE AND IMPLEMENTATION PROVISIONS. The bill 11 takes effect upon enactment. However, the bill authorizes 12 the racing and gaming commission to adopt emergency rules to 13 implement the bill and provides that the racing and gaming 14 commission shall not implement the bill until the later of July 15 4, 2019, or the date the commission has adopted rules pursuant 16 to Code chapter 17A providing for such implementation and such 17 rules have become effective. 18 -28- LSB 2133XC (11) 88 ec/rn 28/ 28
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