House File 748 - Introduced HOUSE FILE 748 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 648) (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 2452HZ (3) 88 ec/rn

H.F. 748 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 2452HZ (3) 88 ec/rn 1/ 34

H.F. 748 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. 18 NEW SUBSECTION . 23. “Sports betting” means the acceptance 19 of wagers on an authorized sporting event by any system of 20 wagering as authorized by the commission. “Sports betting” 21 does not include wagering on a race as defined in section 22 99D.2, entering an internet fantasy sports contest as defined 23 in section 99E.1, or placing a wager on the performance or 24 nonperformance of any individual athlete participating in a 25 single game or match of a collegiate sporting event in which 26 a collegiate team from this state is a participant. “Sports 27 betting” also does not include wagering on the performance of 28 athletes in an international individual sporting event governed 29 by the international olympic committee in which any participant 30 in the sporting event is under eighteen years of age. 31 NEW SUBSECTION . 24. “Sports betting net receipts” means 32 the gross receipts less winnings paid to wagerers on sports 33 betting. 34 NEW SUBSECTION . 25. “Sports betting wagering area” means an 35 -2- LSB 2452HZ (3) 88 ec/rn 2/ 34

H.F. 748 area, as designated by the commission, in which sports betting 1 is conducted. 2 Sec. 4. Section 99F.1, subsection 17, Code 2019, is amended 3 to read as follows: 4 17. “Licensee” means any person licensed under section 99F.7 5 or 99F.7A . 6 Sec. 5. Section 99F.3, Code 2019, is amended to read as 7 follows: 8 99F.3 Gambling games and sports betting authorized. 9 The system of wagering on a gambling game and sports betting 10 as provided by this chapter is legal, when conducted on an 11 excursion gambling boat, gambling structure, or racetrack 12 enclosure at authorized locations by a licensee as provided in 13 this chapter . 14 Sec. 6. Section 99F.4, subsections 3 and 22, Code 2019, are 15 amended to read as follows: 16 3. To adopt standards under which all excursion gambling 17 boat operations shall be held and standards for the facilities 18 within which the gambling operations are to be held. The 19 commission may authorize the operation of gambling games on an 20 excursion gambling boat and sports betting in a sports betting 21 wagering area which is also licensed to sell or serve alcoholic 22 beverages, wine, or beer as defined in section 123.3 . 23 22. To establish a process to allow a person to be 24 voluntarily excluded from advance deposit wagering as defined 25 in section 99D.11, from an internet fantasy sports contest as 26 defined in section 99E.1, from advance deposit sports betting 27 wagering as defined in section 99F.9, from the gaming floor 28 and sports betting wagering area of an excursion gambling 29 boat, from the wagering area, as defined in section 99D.2 , 30 and from the gaming floor and sports betting wagering area 31 of all other licensed facilities under this chapter and 32 chapter 99D as provided in this subsection . The process shall 33 provide that an initial request by a person to be voluntarily 34 excluded shall be for a period of five years or life and any 35 -3- LSB 2452HZ (3) 88 ec/rn 3/ 34

H.F. 748 subsequent request following any five-year period shall be for 1 a period of five years or life. The process established shall 2 require that licensees be provided electronic access to names 3 and social security numbers of persons voluntarily excluded 4 through a secured interactive internet site maintained by 5 the commission and information regarding persons voluntarily 6 excluded shall be disseminated to all licensees under this 7 chapter and chapter 99D . The names, social security numbers, 8 and information regarding persons voluntarily excluded shall 9 be kept confidential unless otherwise ordered by a court or by 10 another person duly authorized to release such information. 11 The process established shall also require a person requesting 12 to be voluntarily excluded be provided information compiled 13 by the Iowa department of public health on gambling treatment 14 options. The state and any licensee under this chapter or 15 chapter 99D shall not be liable to any person for any claim 16 which may arise from this process. In addition to any other 17 penalty provided by law, any money or thing of value that has 18 been obtained by, or is owed to, a voluntarily excluded person 19 as a result of wagers made by the person after the person has 20 been voluntarily excluded shall be forfeited by the person and 21 shall be credited to the general fund of the state. 22 Sec. 7. Section 99F.4, Code 2019, is amended by adding the 23 following new subsection: 24 NEW SUBSECTION . 27. To adopt standards under which all 25 sports betting is conducted, including the scope and type of 26 wagers allowed, to identify occupations within sports betting 27 which require licensing, and to adopt standards for licensing 28 and background qualifications for occupations including 29 establishing fees for the occupational license. In considering 30 standards regarding the scope and type of wagers allowed for 31 sports betting, the commission shall consult with interested 32 professional and collegiate sports leagues and, if interested, 33 the international olympic committee. All revenue received by 34 the commission under this chapter from license fees shall be 35 -4- LSB 2452HZ (3) 88 ec/rn 4/ 34

H.F. 748 deposited in the general fund of the state and shall be subject 1 to the requirements of section 8.60. All revenue received by 2 the commission from regulatory fees shall be deposited into the 3 gaming regulatory revolving fund established in section 99F.20. 4 Sec. 8. Section 99F.6, subsection 4, paragraph a, 5 subparagraphs (3) and (5), Code 2019, are amended to read as 6 follows: 7 (3) The commission shall authorize, subject to the 8 debt payments for horse racetracks and the provisions of 9 paragraph “b” for dog racetracks, a licensee who is also 10 licensed to conduct pari-mutuel dog or horse racing to use 11 receipts from gambling games and sports betting within the 12 racetrack enclosure to support the horse racing industry and to 13 supplement purses for races particularly for Iowa-bred horses 14 pursuant to an agreement which shall be negotiated between the 15 licensee and representatives of the dog or horse owners. For 16 agreements subject to commission approval concerning purses 17 for horse racing beginning on or after January 1, 2006, the 18 agreements shall provide that total annual purses for all horse 19 racing shall be no less than eleven percent of the first two 20 hundred million dollars of net receipts, and six percent of 21 net receipts above two hundred million dollars. In addition, 22 live standardbred horse racing shall not be conducted at the 23 horse racetrack in Polk county, but the purse moneys designated 24 for standardbred racing pursuant to section 99D.7, subsection 25 5 , paragraph “b” , shall be included in calculating the total 26 annual purses required to be paid pursuant to this subsection . 27 Agreements that are subject to commission approval concerning 28 horse purses for a period of time beginning on or after January 29 1, 2006, shall be jointly submitted to the commission for 30 approval. 31 (5) For purposes of this paragraph, “net receipts” means 32 the annual adjusted gross receipts from all gambling games and 33 sports betting net receipts, less the annual amount of money 34 pledged by the owner of the facility to fund a project approved 35 -5- LSB 2452HZ (3) 88 ec/rn 5/ 34

H.F. 748 to receive vision Iowa funds as of July 1, 2004. 1 Sec. 9. NEW SECTION . 99F.7A Sports betting —— license —— 2 terms and conditions —— fees. 3 1. The commission shall, upon payment of an initial 4 license fee of fifteen thousand dollars and submission of an 5 application to the commission consistent with the requirements 6 of section 99F.6, issue a license to conduct sports betting 7 to a licensee authorized to conduct gambling games at a 8 pari-mutuel racetrack enclosure or a licensee authorized to 9 operate an excursion gambling boat or gambling structure, 10 subject to the requirements of this chapter. The annual 11 renewal fee for a license to conduct sports betting shall be 12 fifteen thousand dollars. 13 2. A licensee under this section shall do all of the 14 following: 15 a. Include on the internet site or mobile application used 16 by the licensee to conduct advance deposit sports betting 17 wagering as authorized in section 99F.9 the statewide telephone 18 number authorized by the Iowa department of public health to 19 provide problem gambling information and extensive responsible 20 gaming features in addition to those described in section 21 99F.4, subsection 22. 22 b. Establish, subject to commission approval, sports betting 23 wagering rules that specify the amounts to be paid on winning 24 sports betting wagers, the effect of changes in the scheduling 25 of an authorized sporting event subject to sports betting, and 26 the source of the information used to determine the outcome 27 of a sports betting wager. The sports betting wagering rules 28 shall be displayed in the licensee’s sports betting wagering 29 area, posted on the internet site or mobile application used by 30 the licensee to conduct advance deposit sports betting wagering 31 as authorized in section 99F.9, and included in the terms and 32 conditions of the licensee’s advance deposit account sports 33 betting wagering system. 34 3. A licensee issued a license to conduct sports betting 35 -6- LSB 2452HZ (3) 88 ec/rn 6/ 34

H.F. 748 under this section shall employ commercially reasonable steps 1 to prohibit coaches, athletic trainers, officials, players, or 2 other individuals who participate in an authorized sporting 3 event that is the subject of sports betting from sports betting 4 under this chapter. In addition, a licensee shall employ 5 commercially reasonable steps to prohibit persons who are 6 employed in a position with direct involvement with coaches, 7 players, athletic trainers, officials, players, or participants 8 in an authorized sporting event that is the subject of sports 9 betting from sports betting under this chapter. 10 Sec. 10. Section 99F.8, Code 2019, is amended to read as 11 follows: 12 99F.8 Bond of licensee. 13 A licensee licensed under section 99F.7 shall post a bond 14 to the state of Iowa before the license is issued in a sum 15 as the commission shall fix, with sureties to be approved by 16 the commission. The bond shall be used to guarantee that the 17 licensee faithfully makes the payments, keeps its books and 18 records and makes reports, and conducts its gambling games and 19 sports betting in conformity with this chapter and the rules 20 adopted by the commission. The bond shall not be canceled by 21 a surety on less than thirty days’ notice in writing to the 22 commission. If a bond is canceled and the licensee fails to 23 file a new bond with the commission in the required amount on 24 or before the effective date of cancellation, the licensee’s 25 license shall be revoked. The total and aggregate liability 26 of the surety on the bond is limited to the amount specified in 27 the bond. 28 Sec. 11. Section 99F.9, subsection 1, Code 2019, is amended 29 to read as follows: 30 1. Except as permitted in this section , the licensee 31 shall not permit no sports betting or any form of wagering on 32 gambling games. 33 Sec. 12. Section 99F.9, Code 2019, is amended by adding the 34 following new subsection: 35 -7- LSB 2452HZ (3) 88 ec/rn 7/ 34

H.F. 748 NEW SUBSECTION . 3A. a. For the purposes of this section, 1 unless the context otherwise requires: 2 (1) “Advance deposit sports betting wagering” means a method 3 of sports betting in which an eligible individual may, in an 4 account established with a licensee under section 99F.7A, 5 deposit moneys into the account and use the account balance to 6 pay for sports betting. Prior to January 1, 2021, an account 7 must be established by an eligible individual in person with 8 a licensee. 9 (2) “Advance deposit sports betting wagering operator” means 10 an advance deposit sports betting wagering operator licensed 11 by the commission who has entered into an agreement with a 12 licensee under section 99F.7A to provide advance deposit sports 13 betting wagering. 14 (3) “Eligible individual” means an individual who is at 15 least twenty-one years of age or older who is located within 16 this state. 17 b. The commission may authorize a licensee under section 18 99F.7A to conduct advance deposit sports betting wagering. An 19 advance deposit sports betting wager may be placed in person 20 in the sports wagering area, or from any other location via 21 a telephone-type device or any other electronic means. The 22 commission may also issue an advance deposit sports betting 23 wagering operator license to an entity who complies with this 24 subsection and section 99F.6 and may require the advance 25 deposit sports wagering operator to conduct an audit consistent 26 with the requirements of section 99F.13. 27 Sec. 13. Section 99F.9, subsection 4, Code 2019, is amended 28 to read as follows: 29 4. A person under the age of twenty-one years shall not make 30 or attempt to make a wager pursuant to subsection 3A or on an 31 excursion gambling boat, gambling structure, or in a racetrack 32 enclosure and shall not be allowed on the gaming floor of 33 an excursion gambling boat or gambling structure or in the 34 wagering area, as defined in section 99D.2 , or on the gaming 35 -8- LSB 2452HZ (3) 88 ec/rn 8/ 34

H.F. 748 floor of a racetrack enclosure. However, a person eighteen 1 years of age or older may be employed to work on the gaming 2 floor of an excursion gambling boat or gambling structure or 3 in the wagering area or on the gaming floor of a racetrack 4 enclosure. A person who violates this subsection with respect 5 to making or attempting to make a wager commits a scheduled 6 violation under section 805.8C, subsection 5 , paragraph “a” . 7 Sec. 14. Section 99F.11, subsection 3, unnumbered paragraph 8 1, Code 2019, is amended to read as follows: 9 The taxes imposed by this section on adjusted gross receipts 10 from gambling games authorized under this chapter shall be paid 11 by the licensee to the treasurer of state within ten days after 12 the close of the day when the wagers were made and shall be 13 distributed as follows: 14 Sec. 15. Section 99F.11, Code 2019, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 4. a. A tax is imposed on the sports 17 betting net receipts received each fiscal year by a licensed 18 operator from sports betting authorized under this chapter at 19 the rate of six and three-quarters percent. 20 b. The taxes imposed by this subsection for sports betting 21 authorized under this chapter shall be paid by the licensed 22 operator to the treasurer of state as determined by the 23 commission and shall be distributed as follows: 24 (1) An amount equal to one-fourth of one percent of sports 25 betting net receipts is appropriated to the Iowa department of 26 public health for purposes of the gambling treatment program 27 established in section 135.150. 28 (2) The remaining amount of sports betting net receipts 29 taxes imposed pursuant to this subsection shall be credited as 30 provided in section 8.57, subsection 5. 31 Sec. 16. Section 99F.12, subsection 2, Code 2019, is amended 32 to read as follows: 33 2. a. The licensee shall furnish to the commission reports 34 and information as the commission may require with respect to 35 -9- LSB 2452HZ (3) 88 ec/rn 9/ 34

H.F. 748 the licensee’s activities. 1 b. A licensee under section 99F.7A shall promptly report 2 to the commission any criminal or disciplinary proceedings 3 commenced against the licensee or its employees in connection 4 with the licensee conducting sports betting including advance 5 deposit sports betting wagering, any abnormal wagering activity 6 or patterns that may indicate a concern about the integrity 7 of an authorized sporting event or events, and any other 8 conduct with the potential to corrupt a wagering outcome of 9 an authorized sporting event for purposes of financial gain, 10 including but not limited to match fixing, and suspicious or 11 illegal wagering activities, including the use of funds derived 12 from illegal activity, wagers to conceal or launder funds 13 derived from illegal activity, use of agents to place wagers, 14 or use of false identification. The commission is required 15 to share any information received pursuant to this paragraph 16 with the division of criminal investigation, any other law 17 enforcement entity upon request, or any regulatory agency the 18 commission deems appropriate. The commission may also share 19 any information received pursuant to this paragraph with any 20 sports team or sports governing body as the commission deems 21 appropriate, but shall not share any information that would 22 interfere with an ongoing criminal investigation. 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 -10- LSB 2452HZ (3) 88 ec/rn 10/ 34

H.F. 748 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. 17. 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 betting . 8 Sec. 18. 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 betting . 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 betting , with intent to defraud, 16 without having made a wager contingent on winning a gambling 17 game or sports betting wager , or claims, collects, or takes an 18 amount of money or thing of value of greater value than the 19 amount won. 20 i. Knowingly entices or induces a person to go to any place 21 where a gambling game or sports betting 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 betting . 25 Sec. 19. 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 -11- LSB 2452HZ (3) 88 ec/rn 11/ 34

H.F. 748 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. 20. EMERGENCY RULES. The state racing and gaming 11 commission created under section 99D.5 may adopt emergency 12 rules under section 17A.4, subsection 3, and section 17A.5, 13 subsection 2, paragraph “b”, to implement the provisions of 14 this division of this Act and the rules shall be effective 15 immediately upon filing unless a later date is specified in the 16 rules. Any rules adopted in accordance with this section shall 17 also be published as a notice of intended action as provided 18 in section 17A.4. 19 Sec. 21. IMPLEMENTATION. The racing and gaming commission 20 shall not implement this division of this Act until the date 21 the commission has adopted rules pursuant to chapter 17A 22 providing for such implementation and such rules have become 23 effective. 24 Sec. 22. EFFECTIVE DATE. This division of this Act, being 25 deemed of immediate importance, takes effect upon enactment. 26 DIVISION II 27 INTERNET FANTASY SPORTS CONTESTS 28 Sec. 23. Section 80.25A, Code 2019, is amended to read as 29 follows: 30 80.25A Pari-mutuel and gambling game Gaming operations —— 31 investigation and enforcement. 32 The commissioner of public safety shall direct the chief 33 of the division of criminal investigation to establish a 34 subdivision to be the primary criminal investigative and 35 -12- LSB 2452HZ (3) 88 ec/rn 12/ 34

H.F. 748 enforcement agency for the purpose of enforcement of chapters 1 99D , 99E, and 99F . The commissioner of public safety shall 2 appoint or assign other agents to the division as necessary to 3 enforce chapters 99D , 99E, and 99F . All enforcement officers, 4 assistants, and agents of the division are subject to section 5 80.15 except clerical workers. 6 Sec. 24. NEW SECTION . 99E.1 Definitions. 7 As used in this chapter, unless the context otherwise 8 requires: 9 1. “Applicant” means an internet fantasy sports contest 10 service provider applying for a license to conduct internet 11 fantasy sports contests under this chapter. 12 2. “Commission” means the state racing and gaming commission 13 created under section 99D.5. 14 3. “Fantasy sports contest” includes any fantasy or 15 simulated game or contest in which the fantasy sports contest 16 operator is not a participant in the game or contest, the value 17 of all prizes and awards offered to winning participants are 18 established and made known to the participants in advance 19 of the contest, all winning outcomes reflect the relative 20 knowledge and skill of the participants and shall be determined 21 by accumulated statistical results of the performance of 22 individuals, including athletes in the case of sporting events, 23 and no winning outcome is based on the score, point spread, or 24 any performance or performances of any single actual team or 25 solely on any single performance of an individual athlete or 26 player in any single actual event. 27 4. “Internet fantasy sports contest” means a method of 28 entering a fantasy sports contest by which a person may 29 establish an account with an internet fantasy sports contest 30 service provider, deposit money into the account, and use 31 the account balance for entering a fantasy sports contest by 32 utilizing electronic communication. 33 5. “Internet fantasy sports contest adjusted revenues” means, 34 for each internet fantasy sports contest, the amount equal to 35 -13- LSB 2452HZ (3) 88 ec/rn 13/ 34

H.F. 748 the total charges and fees collected from all participants 1 entering the internet fantasy sports contest less winnings paid 2 to participants in the contest, multiplied by the location 3 percentage. 4 6. “Internet fantasy sports contest player” means a person 5 who is at least twenty-one years of age and participates in an 6 internet fantasy sports contest operated by an internet fantasy 7 sports contest service provider. 8 7. “Internet fantasy sports contest service provider” means 9 a person, including a licensee under chapter 99D or 99F, who 10 conducts an internet fantasy sports contest as authorized by 11 this chapter. 12 8. “Licensee” means any person licensed under section 99E.5 13 to conduct internet fantasy sports contests. 14 9. “Location percentage” means, for each internet fantasy 15 sports contest, the percentage, rounded to the nearest tenth of 16 a percent, equal to the total charges and fees collected from 17 all internet fantasy sports contest players located in this 18 state divided by the total charges and fees collected from all 19 participants in the internet fantasy sports contest. 20 Sec. 25. NEW SECTION . 99E.2 Internet fantasy sports 21 contests authorized. 22 The system of entering an internet fantasy sports contest as 23 provided by this chapter is legal when conducted by a licensed 24 internet fantasy sports contest service provider as provided in 25 this chapter. 26 Sec. 26. NEW SECTION . 99E.3 Commission —— powers. 27 1. The commission shall have full jurisdiction over and 28 shall supervise internet fantasy sports contests and internet 29 fantasy sports contest service providers as governed by this 30 chapter. 31 2. The commission shall have the following powers and shall 32 adopt rules pursuant to chapter 17A to administer and implement 33 this chapter: 34 a. To review and investigate applicants and determine the 35 -14- LSB 2452HZ (3) 88 ec/rn 14/ 34

H.F. 748 eligibility of applicants for a license to conduct internet 1 fantasy sports contests, pursuant to rules adopted by the 2 commission. 3 b. To license and regulate internet fantasy sports contest 4 service providers subject to the requirements of this chapter. 5 c. To provide for the prevention of practices detrimental to 6 the public and to provide for the best interests of internet 7 fantasy sports contests. 8 d. To investigate alleged violations of this chapter 9 or the commission rules, orders, or final decisions and to 10 take appropriate disciplinary action against a licensee, or 11 institute appropriate legal action for enforcement, or both. 12 Information gathered during an investigation is confidential 13 during the pendency of the investigation. 14 e. To assess fines and revoke or suspend licenses and to 15 impose penalties for violations of this chapter. 16 f. To take any other action as may be reasonable or 17 appropriate to enforce this chapter and the commission rules. 18 Sec. 27. NEW SECTION . 99E.4 Requirements of applicant —— 19 fee. 20 1. An applicant for a license to conduct internet fantasy 21 sports contests shall complete and sign an application on 22 the form prescribed and published by the commission. The 23 application shall include such information of the applicant 24 that the commission deems necessary for purposes of issuing a 25 license pursuant to this chapter. 26 2. An applicant shall submit fingerprints and information 27 that the commission deems necessary to the commission in the 28 manner prescribed on the application forms. The fingerprints 29 may be submitted to the federal bureau of investigation by 30 the department of public safety through the state criminal 31 history repository for the purpose of a national criminal 32 history check. The results of a criminal history record check 33 conducted pursuant to this subsection shall be considered a 34 confidential record under chapter 22. 35 -15- LSB 2452HZ (3) 88 ec/rn 15/ 34

H.F. 748 3. Before a license is granted, the division of criminal 1 investigation of the department of public safety shall conduct 2 a thorough background investigation of the applicant for a 3 license to conduct internet fantasy sports contests. The 4 applicant shall provide information on a form as required by 5 the division of criminal investigation. 6 4. The commission shall charge the applicant a reasonable 7 fee set by the division of criminal investigation of the 8 department of public safety, to defray those costs associated 9 with the fingerprint and national criminal history check 10 requirements of subsection 2 and background investigations 11 conducted by agents of the division of criminal investigation 12 as provided in subsection 3. These fees and costs are in 13 addition to any other license fees and costs charged by the 14 commission. 15 5. The commission shall not grant a license to an applicant 16 if there is substantial evidence that any of the following 17 apply: 18 a. A license issued to the applicant to conduct internet 19 fantasy sports contests in another jurisdiction has been 20 revoked, or a request for a license to conduct internet fantasy 21 sports contests in another jurisdiction has been denied, by 22 an entity licensing persons to conduct such contests in that 23 jurisdiction. 24 b. The applicant has not demonstrated financial 25 responsibility sufficient to adequately meet the requirements 26 of the enterprise proposed. 27 c. The applicant does not adequately disclose the true 28 owners of the enterprise proposed. 29 d. The applicant has knowingly made a false statement of a 30 material fact to the commission. 31 e. The applicant has failed to meet a monetary obligation in 32 connection with conducting an internet fantasy sports contest. 33 f. The applicant is not of good repute and moral character 34 or the applicant has pled guilty to, or has been convicted of, 35 -16- LSB 2452HZ (3) 88 ec/rn 16/ 34

H.F. 748 a felony. 1 g. Any member of the board of directors of the applicant is 2 not twenty-one years of age or older. 3 6. A person who knowingly makes a false statement on the 4 application is guilty of an aggravated misdemeanor. 5 7. For the purposes of this section, “applicant” includes 6 each member of the board of directors of an internet fantasy 7 sports contest service provider. 8 Sec. 28. NEW SECTION . 99E.5 Licenses —— fees —— terms and 9 conditions —— revocation. 10 1. If the commission is satisfied that the requirements 11 of this chapter and its rules adopted under this chapter 12 applicable to licensees have been or will be complied with, the 13 commission shall, upon payment of an initial annual license 14 fee of five thousand dollars, issue a license for a period of 15 not more than three years to an applicant to conduct internet 16 fantasy sports contests in this state. 17 2. A licensed internet fantasy sports contest service 18 provider shall use commercially reasonable methods to comply 19 with all of the following requirements: 20 a. Prevent employees of the internet fantasy sports contest 21 service provider and relatives living in the same household of 22 such employees from competing in any internet fantasy sports 23 contest on the service provider’s digital platform in which the 24 service provider offers a cash prize to the public. 25 b. Verify that an internet fantasy sports contest player 26 located in this state is twenty-one years of age or older. 27 c. Ensure that coaches, officials, players, contestants, 28 or other individuals who participate in a game or contest 29 that is the subject of an internet fantasy sports contest are 30 restricted from entering an internet fantasy sports contest in 31 which the outcome is determined, in whole or in part, by the 32 accumulated statistical results of a team of individuals in the 33 game or contest in which they participate. 34 d. Allow individuals to restrict themselves from entering 35 -17- LSB 2452HZ (3) 88 ec/rn 17/ 34

H.F. 748 an internet fantasy sports contest conducted by the internet 1 fantasy sports contest service provider upon request and take 2 reasonable steps to prevent those individuals from entering 3 any internet fantasy sports contests conducted by the internet 4 fantasy sports contest service provider. 5 e. Allow individuals to establish an account with an 6 internet fantasy sports contest service provider by utilizing 7 electronic communication. 8 f. Disclose the number of entries a single internet fantasy 9 sports contest player may submit to each internet fantasy 10 sports contest and take reasonable steps to prevent players 11 from submitting more than the allowable number of entries for 12 that internet fantasy sports contest. 13 g. Segregate internet fantasy sports contest player funds 14 from operational funds or maintain a reserve in the form of 15 cash, cash equivalents, an irrevocable letter of credit, 16 payment processor reserves and receivables, a bond, or a 17 combination thereof in the amount of the deposits in internet 18 fantasy sports contest player accounts for the benefit and 19 protection of internet fantasy sports contest player funds held 20 in internet fantasy sports contest accounts by the internet 21 fantasy sports contest service provider. 22 h. Conduct an annual audit under section 99E.9. 23 i. Pay the tax as provided in section 99E.6. 24 3. The annual renewal fee for a license to conduct internet 25 fantasy sports contests shall be five thousand dollars. Moneys 26 collected by the commission from the annual renewal fee for 27 a license paid under this subsection shall be considered 28 repayment receipts as defined in section 8.2. 29 4. a. A licensed internet fantasy sports contest service 30 provider shall pay a regulatory fee to the commission. The 31 regulatory fee shall be established by the commission based on 32 the costs of administering and enforcing this chapter. 33 b. A licensed internet fantasy sports contest service 34 provider shall receive a credit for the amount of the license 35 -18- LSB 2452HZ (3) 88 ec/rn 18/ 34

H.F. 748 and regulatory fee paid by the provider against the taxes to be 1 paid pursuant to section 99E.6. 2 c. Notwithstanding section 8.60, the portion of the fee 3 paid pursuant to paragraph “a” relating to the costs of the 4 commission shall be deposited into the gaming regulatory 5 revolving fund established in section 99F.20. 6 5. Upon a violation of any of the conditions listed in 7 section 99E.4 or this section by a licensee, the commission 8 shall immediately revoke the license. 9 Sec. 29. NEW SECTION . 99E.6 Internet fantasy sports contest 10 tax —— rate. 11 1. A tax is imposed on internet fantasy sports contest 12 adjusted revenues received each fiscal year by an internet 13 fantasy sports contest service provider from internet fantasy 14 sports contests authorized under this chapter at the rate of 15 six and three-quarters percent. 16 2. The taxes imposed by this section for internet fantasy 17 sports contests authorized under this chapter shall be paid by 18 the internet fantasy sports contest service provider to the 19 treasurer of state as determined by the commission and shall be 20 distributed as follows: 21 a. An amount equal to one-fourth of one percent of internet 22 fantasy sports contest adjusted revenues is appropriated to the 23 Iowa department of public health for purposes of the gambling 24 treatment program established in section 135.150. 25 b. The remaining amount of internet fantasy sports contest 26 adjusted revenues taxes imposed pursuant to this section shall 27 be credited as provided in section 8.57, subsection 5. 28 Sec. 30. NEW SECTION . 99E.7 Internet fantasy sports 29 contests —— age restrictions. 30 A person under the age of twenty-one years shall not enter an 31 internet fantasy sports contest. A person who violates this 32 section with respect to entering an internet fantasy sports 33 contest commits a scheduled violation under section 805.8C, 34 subsection 12. 35 -19- LSB 2452HZ (3) 88 ec/rn 19/ 34