Senate File 166 H-8102 Amend Senate File 166, as amended, passed, and 1 reprinted by the Senate, as follows: 2 1. By striking everything after the enacting clause 3 and inserting: 4 < Section 1. NEW SECTION . 99E.1 Definitions. 5 As used in this chapter, unless the context 6 otherwise requires: 7 1. “Applicant” means an internet fantasy sports 8 contest service provider applying for a license to 9 conduct internet fantasy sports contests under this 10 chapter. 11 2. “Commission” means the state racing and gaming 12 commission created under section 99D.5. 13 3. “Fantasy sports contest” includes any fantasy or 14 simulated game or contest in which the fantasy sports 15 contest operator is not a participant in the game or 16 contest, the value of all prizes and awards offered to 17 winning participants are established and made known 18 to the participants in advance of the contest, all 19 winning outcomes reflect the relative knowledge and 20 skill of the participants and shall be determined by 21 accumulated statistical results of the performance 22 of individuals, including athletes in the case of 23 sporting events, and no winning outcome is based on the 24 score, point spread, or any performance or performances 25 of any single actual team or solely on any single 26 performance of an individual athlete or player in any 27 single actual event. For purposes of this subsection, 28 “athlete” does not include an athlete participating in 29 any extracurricular interscholastic athletic contest or 30 competition which is sponsored or administered by an 31 organization as defined in section 280.13. 32 4. “Internet fantasy sports contest” means a method 33 of entering a fantasy sports contest by which a person 34 may establish an account with an internet fantasy 35 -1- SF166.3021 (4) 86 ec/nh 1/ 10 #1.

sports contest service provider, deposit money into 1 the account, and use the account balance for entering 2 a fantasy sports contest by utilizing electronic 3 communication. 4 5. “Internet fantasy sports contest adjusted 5 revenues” means, for each internet fantasy sports 6 contest, the amount equal to the total charges and 7 fees collected from all participants entering the 8 internet fantasy sports contest less winnings paid to 9 participants in the contest, multiplied by the resident 10 percentage. 11 6. “Internet fantasy sports contest player” means a 12 person who is at least twenty-one years of age, is a 13 resident of this state, and participates in an internet 14 fantasy sports contest operated by an internet fantasy 15 sports contest service provider. 16 7. “Internet fantasy sports contest service 17 provider” means a person, including a licensee under 18 chapter 99D or 99F, who conducts an internet fantasy 19 sports contest as authorized by this chapter. 20 8. “Resident percentage” means, for each internet 21 fantasy sports contest, the percentage, rounded to the 22 nearest tenth of a percent, equal to the total charges 23 and fees collected from all internet fantasy sports 24 contest players divided by the total charges and fees 25 collected from all participants in the internet fantasy 26 sports contest. 27 Sec. 2. NEW SECTION . 99E.2 Internet fantasy sports 28 contests authorized. 29 The system of entering an internet fantasy sports 30 contest as provided by this chapter is legal when 31 conducted by a licensed internet fantasy sports contest 32 service provider as provided in this chapter. 33 Sec. 3. NEW SECTION . 99E.3 Commission —— powers. 34 The commission shall have full jurisdiction over and 35 -2- SF166.3021 (4) 86 ec/nh 2/ 10

shall supervise internet fantasy sports contests and 1 internet fantasy sports contest service providers as 2 governed by this chapter. The commission shall have 3 the following powers and shall adopt rules pursuant to 4 chapter 17A to implement this chapter: 5 1. To investigate applicants and determine the 6 eligibility of applicants for a license to conduct 7 internet fantasy sports contests. 8 2. To license and regulate internet fantasy sports 9 contest service providers subject to the requirements 10 of this chapter. 11 3. To investigate alleged violations of this 12 chapter or the commission rules, orders, or final 13 decisions and to take appropriate disciplinary action 14 against a licensee, or institute appropriate legal 15 action for enforcement, or both. Information gathered 16 during an investigation is confidential during the 17 pendency of the investigation. 18 4. To assess fines and revoke or suspend licenses. 19 5. To require, beginning July 1, 2018, licensees 20 to establish a process with the state for licensees to 21 have electronic access to names and social security 22 numbers of debtors of claimant agencies through a 23 secured interactive internet site maintained by the 24 state. 25 6. To take any other action as may be reasonable or 26 appropriate to enforce this chapter and the commission 27 rules. 28 Sec. 4. NEW SECTION . 99E.4 Requirements of 29 applicant —— fee —— penalty. 30 1. An applicant for a license to conduct internet 31 fantasy sports contests shall complete and sign an 32 application on the form prescribed and published by 33 the commission. The application shall include such 34 information of the applicant that the commission deems 35 -3- SF166.3021 (4) 86 ec/nh 3/ 10

necessary for purposes of issuing a license pursuant 1 to this chapter. 2 2. The commission shall charge the applicant a fee 3 set by the department of public safety, division of 4 criminal investigation, to defray the costs associated 5 with any investigations conducted pursuant to the 6 requirements of this section concerning the applicant. 7 This fee is in addition to any other license fee 8 charged by the commission. The fee may be retained by 9 the department of public safety, division of criminal 10 investigation, and shall be considered repayment 11 receipts as defined in section 8.2. 12 3. A license shall not be granted to an applicant 13 if there is substantial evidence that any of the 14 following apply: 15 a. A license issued to the applicant to conduct 16 internet fantasy sports contests in another 17 jurisdiction has been revoked by an entity licensing 18 persons to conduct such contests in that jurisdiction. 19 b. The applicant has not demonstrated financial 20 responsibility sufficient to adequately meet the 21 requirements of the enterprise proposed. 22 c. The applicant does not adequately disclose the 23 true owners of the enterprise proposed. 24 d. The applicant has knowingly made a false 25 statement of a material fact to the commission. 26 e. The applicant has failed to meet a monetary 27 obligation in connection with conducting an internet 28 fantasy sports contest. 29 f. The applicant is not of good repute and moral 30 character or the applicant has pled guilty to, or has 31 been convicted of, a felony. 32 4. A person who knowingly makes a false statement 33 on the application is guilty of an aggravated 34 misdemeanor. 35 -4- SF166.3021 (4) 86 ec/nh 4/ 10

5. For the purposes of this section, “applicant” 1 includes each member of the board of directors of an 2 internet fantasy sports contest service provider. 3 Sec. 5. NEW SECTION . 99E.5 Licenses —— fees —— 4 terms and conditions —— revocation. 5 1. If the commission is satisfied that the 6 requirements of this chapter and its rules adopted 7 under this chapter applicable to licensees have been 8 or will be complied with, the commission shall issue a 9 license for a period of not more than three years to an 10 applicant to conduct internet fantasy sports contests 11 in this state. 12 2. A licensed internet fantasy sports contest 13 service provider shall comply with all of the following 14 requirements: 15 a. Prevent employees of the internet fantasy sports 16 contest service provider and relatives living in the 17 same household as such employees from competing in 18 any internet fantasy sports contest conducted by the 19 service provider in which the service provider offers a 20 cash prize over five dollars. 21 b. Verify that an internet fantasy sports contest 22 player is twenty-one years of age or older and is a 23 resident of Iowa. 24 c. Ensure that individuals who participate in a 25 game or contest that is the subject of an internet 26 fantasy sports contest are restricted from entering an 27 internet fantasy sports contest in which the outcome 28 is determined, in whole or in part, by the accumulated 29 statistical results of a team of individuals in the 30 game or contest in which they participate. 31 d. Allow individuals to restrict themselves from 32 entering an internet fantasy sports contest conducted 33 by the internet fantasy sports contest service provider 34 upon request and take reasonable steps to prevent those 35 -5- SF166.3021 (4) 86 ec/nh 5/ 10

individuals from entering any internet fantasy sports 1 contests conducted by the internet fantasy sports 2 contest service provider. 3 e. Disclose the number of entries a single internet 4 fantasy sports contest player may submit to each 5 internet fantasy sports contest and take reasonable 6 steps to prevent players from submitting more than the 7 allowable number of entries for that internet fantasy 8 sports contest. 9 f. Segregate internet fantasy sports contest player 10 funds from operational funds and maintain a reserve 11 in the form of cash, cash equivalents, an irrevocable 12 letter of credit, a bond, or a combination thereof in 13 the amount of the deposits in internet fantasy sports 14 contest player accounts for the benefit and protection 15 of internet fantasy sports contest player funds held 16 in internet fantasy sports contest accounts by the 17 internet fantasy sports contest service provider. 18 g. Annually contract with a third party to 19 perform an independent audit, consistent with the 20 standards established by the public company accounting 21 oversight board, to ensure compliance with all of the 22 requirements in this chapter and submit the results of 23 the independent audit to the commission. 24 h. Pay the tax as provided in section 99E.6. 25 3. The annual license fee to conduct internet 26 fantasy sports contests shall be five hundred dollars. 27 Moneys collected by the commission from the annual 28 license fee paid under this subsection shall be 29 considered repayment receipts as defined in section 30 8.2. 31 4. Upon a violation of any of the conditions listed 32 in section 99E.4 or this section by a licensee, the 33 commission shall immediately revoke the license. 34 Sec. 6. NEW SECTION . 99E.6 Internet fantasy sports 35 -6- SF166.3021 (4) 86 ec/nh 6/ 10

contest tax —— rate. 1 A tax of seven and one-half percent is imposed on 2 internet fantasy sports contest adjusted revenues. 3 The tax imposed by this section shall be paid by the 4 internet fantasy sports contest service provider to 5 the commission as provided by the commission. The tax 6 shall be deposited in the rebuild Iowa infrastructure 7 fund created in section 8.57. 8 Sec. 7. NEW SECTION . 99E.7 Internet fantasy sports 9 contests —— age restrictions. 10 A person under the age of twenty-one years shall not 11 enter an internet fantasy sports contest. A person 12 who violates this section with respect to entering an 13 internet fantasy sports contest commits a scheduled 14 violation under section 805.8C, subsection 11. 15 Sec. 8. NEW SECTION . 99E.8 Division of criminal 16 investigation. 17 The division of criminal investigation of the 18 department of public safety may investigate to 19 determine licensee compliance with the requirements 20 of this chapter . Investigations may be conducted 21 either on the criminal investigation division’s own 22 initiative or at the request of the commission. The 23 criminal investigation division and the commission 24 shall cooperate to the maximum extent possible on an 25 investigation. 26 Sec. 9. NEW SECTION . 99E.9 Setoff. 27 1. A licensee or a person acting on behalf of a 28 licensee shall be provided electronic access to the 29 names of the persons indebted to a claimant agency 30 pursuant to the process established pursuant to section 31 99E.3, subsection 5 . The electronic access provided 32 by the claimant agency shall include access to the 33 names of the debtors, their social security numbers, 34 and any other information that assists the licensee 35 -7- SF166.3021 (4) 86 ec/nh 7/ 10

in identifying the debtors. If the name of a debtor 1 provided to the licensee through electronic access is 2 retrieved by the licensee and the winnings are equal 3 to or greater than one thousand two hundred dollars 4 per occurrence, the retrieval of such a name shall 5 constitute a valid lien upon and claim of lien against 6 the winnings of the debtor whose name is electronically 7 retrieved from the claimant agency. If a debtor’s 8 winnings are equal to or greater than one thousand two 9 hundred dollars per occurrence, the full amount of the 10 debt shall be collectible from any winnings due the 11 debtor without regard to limitations on the amounts 12 that may be collectible in increments through setoff 13 or other proceedings. 14 2. The licensee is authorized and directed to 15 withhold any winnings of a debtor which are paid out 16 directly by the licensee subject to the lien created by 17 this section and provide notice of such withholding to 18 the winner when the winner appears and claims winnings 19 in person. The licensee shall pay the funds over to 20 the collection entity which administers the setoff 21 program pursuant to section 8A.504 . 22 3. Notwithstanding any other provision of law to 23 the contrary, the licensee may provide to a claimant 24 agency all information necessary to accomplish and 25 effectuate the intent of this section , and likewise the 26 claimant agency may provide all information necessary 27 to accomplish and effectuate the intent of this 28 section . 29 4. The information obtained by a claimant agency 30 from the licensee in accordance with this section shall 31 retain its confidentiality and shall only be used by a 32 claimant agency in the pursuit of its debt collection 33 duties and practices. An employee or prior employee 34 of a claimant agency who unlawfully discloses any such 35 -8- SF166.3021 (4) 86 ec/nh 8/ 10

information for any other purpose, except as otherwise 1 specifically authorized by law, shall be subject to the 2 penalties specified by law for unauthorized disclosure 3 of confidential information by an agent or employee of 4 the claimant agency. 5 5. The information obtained by a licensee from a 6 claimant agency in accordance with this section shall 7 retain its confidentiality and only be used by the 8 licensee in the pursuit of debt collection duties and 9 practices. An employee or prior employee of a licensee 10 who unlawfully discloses any such information for 11 any other purpose, except as otherwise specifically 12 authorized by law, shall be subject to the same 13 penalties specified by law for unauthorized disclosure 14 of confidential information by an agent or employee of 15 the licensee. 16 6. Except as otherwise provided in this chapter , 17 attachments, setoffs, or executions authorized and 18 issued pursuant to law shall be withheld if timely 19 served upon the licensee. 20 7. A claimant agency or licensee, acting in good 21 faith, shall not be liable to any person for actions 22 taken pursuant to this section . 23 Sec. 10. NEW SECTION . 99E.10 Penalties. 24 In addition to any other penalty specified in this 25 chapter, a person who willfully fails to comply with 26 the requirements of this chapter and the rules adopted 27 pursuant to chapter 17A commits a class “D” felony and, 28 in addition, shall be barred for life from internet 29 fantasy sports contests. 30 Sec. 11. Section 232C.4, subsection 3, Code 2016, 31 is amended to read as follows: 32 3. An emancipated minor shall remain subject 33 to voting restrictions under chapter 48A , gambling 34 restrictions under chapter 99B , 99D , 99F , 99G , or 725 , 35 -9- SF166.3021 (4) 86 ec/nh 9/ 10

internet fantasy sports contest restrictions under 1 chapter 99E, alcohol restrictions under chapter 123 , 2 compulsory attendance requirements under chapter 299 , 3 and cigarette tobacco restrictions under chapter 453A . 4 Sec. 12. Section 714B.10, subsection 1, Code 2016, 5 is amended to read as follows: 6 1. Advertising by sponsors registered pursuant 7 to chapter 557B , licensed pursuant to chapter 99B , or 8 regulated pursuant to chapter 99D , 99E, 99F , or 99G . 9 Sec. 13. Section 805.8C, Code 2016, is amended by 10 adding the following new subsection: 11 NEW SUBSECTION . 11. Internet fantasy sports contest 12 violations. For violations of legal age for entering 13 an internet fantasy sports contest under section 99E.7, 14 the scheduled fine is five hundred dollars. Failure 15 to pay the fine by a person under the age of eighteen 16 shall not result in the person being detained in a 17 secure facility. 18 Sec. 14. IMPLEMENTATION DATE. The following 19 provision or provisions of this Act shall not be 20 implemented until July 1, 2018: 21 1. The section of this Act enacting section 99E.9. > 22 2. Title page, line 1, after < contests > by 23 inserting < , providing for a tax, making penalties 24 applicable, and including implementation provisions > 25 ______________________________ COMMITTEE ON STATE GOVERNMENT VANDER LINDEN of Mahaska, Chairperson -10- SF166.3021 (4) 86 ec/nh 10/ 10 #2.