Senate File 617 - Introduced SENATE FILE 617 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 366) (SUCCESSOR TO SSB 1168) 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 2133SZ (5) 88 ec/rn

S.F. 617 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 2133SZ (5) 88 ec/rn 1/ 38

S.F. 617 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, or professional motor race 17 event. “Authorized sporting event” does not include a race as 18 defined in section 99D.2, a fantasy sports contest as defined 19 in section 99E.1, minor league sporting event, or any athletic 20 event or competition of an interscholastic sport as defined in 21 section 9A.102. 22 NEW SUBSECTION . 4A. “Collegiate sporting event” means an 23 athletic event or competition of an intercollegiate sport as 24 defined in section 9A.102. 25 NEW SUBSECTION . 16A. “International sporting event” means 26 an international team or individual sporting event governed by 27 an international sports federation or sports governing body, 28 including sporting events governed by the international olympic 29 committee and the international federation of association 30 football. 31 NEW SUBSECTION . 18A. “Minor league sporting event” means 32 a sporting event conducted by a sports league which is not 33 regarded as the premier league in the sport as determined by 34 the commission. 35 -2- LSB 2133SZ (5) 88 ec/rn 2/ 38

S.F. 617 NEW SUBSECTION . 19A. “Professional sporting event” means an 1 event, excluding a minor league sporting event, at which two 2 or more persons participate in sports or athletic events and 3 receive compensation in excess of actual expenses for their 4 participation in such event. 5 NEW SUBSECTION . 23. “Sports wagering” means the acceptance 6 of wagers on an authorized sporting event by any system of 7 wagering as authorized by the commission. “Sports wagering” 8 does not include placing a wager on the performance or 9 nonperformance of any individual athlete participating in 10 a single game or match of a collegiate sporting event in 11 which a collegiate team from this state is a participant, or 12 placing a wager on the performance of athletes in an individual 13 international sporting event governed by the international 14 olympic committee in which any participant in the international 15 sporting event is under eighteen years of age. 16 NEW SUBSECTION . 24. “Sports wagering area” means an area, 17 as designated by the commission, in which sports wagering is 18 conducted. 19 NEW SUBSECTION . 25. “Sports wagering net receipts” means 20 the gross receipts less winnings paid to wagerers on sports 21 wagering. 22 Sec. 4. Section 99F.1, subsection 17, Code 2019, is amended 23 to read as follows: 24 17. “Licensee” means any person licensed under section 99F.7 25 or 99F.7A . 26 Sec. 5. Section 99F.3, Code 2019, is amended to read as 27 follows: 28 99F.3 Gambling games and sports wagering authorized. 29 The system of wagering on a gambling game and sports wagering 30 as provided by this chapter is legal, when conducted on an 31 excursion gambling boat, gambling structure, or racetrack 32 enclosure at authorized locations by a licensee as provided 33 in this chapter . 34 Sec. 6. Section 99F.4, subsections 3 and 22, Code 2019, are 35 -3- LSB 2133SZ (5) 88 ec/rn 3/ 38

S.F. 617 amended to read as follows: 1 3. To adopt standards under which all excursion gambling 2 boat operations shall be held and standards for the facilities 3 within which the gambling operations are to be held. The 4 commission may authorize the operation of gambling games on 5 an excursion gambling boat and sports wagering in a sports 6 wagering area which is also licensed to sell or serve alcoholic 7 beverages, wine, or beer as defined in section 123.3 . 8 22. To establish a process to allow a person to be 9 voluntarily excluded from advance deposit wagering as defined 10 in section 99D.11, from an internet fantasy sports contest as 11 defined in section 99E.1, from advance deposit sports wagering 12 as defined in section 99F.9, from the gaming floor and sports 13 wagering area of an excursion gambling boat, from the wagering 14 area, as defined in section 99D.2 , and from the gaming floor 15 and sports wagering area of all other licensed facilities under 16 this chapter and chapter 99D as provided in this subsection . 17 The process shall provide that an initial request by a person 18 to be voluntarily excluded shall be for a period of five years 19 or life and any subsequent request following any five-year 20 period shall be for a period of five years or life. The 21 process established shall require that licensees be provided 22 electronic access to names and social security numbers of 23 persons voluntarily excluded through a secured interactive 24 internet site maintained by the commission and information 25 regarding persons voluntarily excluded shall be disseminated 26 to all licensees under this chapter and chapter 99D . The 27 names, social security numbers, and information regarding 28 persons voluntarily excluded shall be kept confidential 29 unless otherwise ordered by a court or by another person 30 duly authorized to release such information. The process 31 established shall also require a person requesting to be 32 voluntarily excluded be provided information compiled by the 33 Iowa department of public health on gambling treatment options. 34 The state and any licensee under this chapter or chapter 99D 35 -4- LSB 2133SZ (5) 88 ec/rn 4/ 38

S.F. 617 shall not be liable to any person for any claim which may arise 1 from this process. In addition to any other penalty provided 2 by law, any money or thing of value that has been obtained by, 3 or is owed to, a voluntarily excluded person as a result of 4 wagers made by the person after the person has been voluntarily 5 excluded shall be forfeited by the person and shall be credited 6 to the general fund of the state. 7 Sec. 7. Section 99F.4, Code 2019, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 27. To adopt standards under which all 10 sports wagering is conducted, including the scope and type 11 of wagers allowed, to identify occupations within sports 12 wagering which require licensing, and to adopt standards 13 for licensing and background qualifications for occupations 14 including establishing fees for the occupational license. All 15 revenue received by the commission under this chapter from 16 license fees shall be deposited in the state philanthropy, 17 opportunity, reinvestment, and tourism fund created in section 18 8.57. All revenue received by the commission from regulatory 19 fees shall be deposited into the gaming regulatory revolving 20 fund established in section 99F.20. 21 Sec. 8. Section 99F.5, subsection 1, Code 2019, is amended 22 to read as follows: 23 1. A qualified sponsoring organization may apply to the 24 commission for a license to conduct gambling games on an 25 excursion gambling boat or gambling structure as provided in 26 this chapter . A person may apply to the commission for a 27 license to operate an excursion gambling boat. An operating 28 agreement entered into on or after May 6, 2004, between 29 a qualified sponsoring organization and an operator of an 30 excursion gambling boat or gambling structure shall provide for 31 a minimum distribution by the qualified sponsoring organization 32 for educational, civic, public, charitable, patriotic, or 33 religious uses as defined in section 99B.1 , that averages at 34 least three percent of the adjusted gross receipts for each 35 -5- LSB 2133SZ (5) 88 ec/rn 5/ 38

S.F. 617 license year and, if also licensed to conduct sports wagering, 1 three-quarters of one percent of sports wagering net receipts 2 for each license year . The application shall be filed with the 3 administrator of the commission at least ninety days before 4 the first day of the next excursion season as determined by 5 the commission, shall identify the excursion gambling boat 6 upon which gambling games will be authorized, shall specify 7 the exact location where the excursion gambling boat will be 8 docked, and shall be in a form and contain information as the 9 commission prescribes. The minimum capacity of an excursion 10 gambling boat or gambling structure is two hundred fifty 11 persons. 12 Sec. 9. Section 99F.6, subsection 4, paragraph a, 13 subparagraphs (2), (3), and (5), Code 2019, are amended to read 14 as follows: 15 (2) A qualified sponsoring organization licensed to operate 16 gambling games under this chapter shall distribute the receipts 17 of all gambling games, less reasonable expenses, charges, 18 taxes, fees, and deductions allowed under this chapter , as 19 winnings to players or participants or shall distribute the 20 receipts for educational, civic, public, charitable, patriotic, 21 or religious uses as defined in section 99B.1 . However, a 22 licensee to conduct gambling games under this chapter shall, 23 unless an operating agreement for an excursion gambling boat 24 otherwise provides, distribute at least three percent of the 25 adjusted gross receipts and, if also licensed to conduct sports 26 wagering, three-quarters of one percent of sports wagering net 27 receipts for each license year for educational, civic, public, 28 charitable, patriotic, or religious uses as defined in section 29 99B.1 . However, if a licensee who is also licensed to conduct 30 pari-mutuel wagering at a horse racetrack has unpaid debt from 31 the pari-mutuel racetrack operations, the first receipts of 32 the gambling games operated within the racetrack enclosure 33 less reasonable operating expenses, taxes, and fees allowed 34 under this chapter shall be first used to pay the annual 35 -6- LSB 2133SZ (5) 88 ec/rn 6/ 38

S.F. 617 indebtedness. 1 (3) The commission shall authorize, subject to the 2 debt payments for horse racetracks and the provisions of 3 paragraph “b” for dog racetracks, a licensee who is also 4 licensed to conduct pari-mutuel dog or horse racing to use 5 receipts from gambling games and sports wagering within the 6 racetrack enclosure to support the horse racing industry and to 7 supplement purses for races particularly for Iowa-bred horses 8 pursuant to an agreement which shall be negotiated between the 9 licensee and representatives of the dog or horse owners. For 10 agreements subject to commission approval concerning purses 11 for horse racing beginning on or after January 1, 2006, the 12 agreements shall provide that total annual purses for all horse 13 racing shall be no less than eleven percent of the first two 14 hundred million dollars of net receipts, and six percent of 15 net receipts above two hundred million dollars. In addition, 16 live standardbred horse racing shall not be conducted at the 17 horse racetrack in Polk county, but the purse moneys designated 18 for standardbred racing pursuant to section 99D.7, subsection 19 5 , paragraph “b” , shall be included in calculating the total 20 annual purses required to be paid pursuant to this subsection . 21 Agreements that are subject to commission approval concerning 22 horse purses for a period of time beginning on or after January 23 1, 2006, shall be jointly submitted to the commission for 24 approval. 25 (5) For purposes of this paragraph, “net receipts” means 26 the annual adjusted gross receipts from all gambling games and 27 sports wagering net receipts, less the annual amount of money 28 pledged by the owner of the facility to fund a project approved 29 to receive vision Iowa funds as of July 1, 2004. 30 Sec. 10. NEW SECTION . 99F.7A Sports wagering —— license —— 31 terms and conditions —— fees. 32 1. The commission shall, upon payment of an initial license 33 fee of seventy-five thousand dollars and submission of an 34 application to the commission consistent with the requirements 35 -7- LSB 2133SZ (5) 88 ec/rn 7/ 38

S.F. 617 of section 99F.6, issue a license to conduct sports wagering 1 to a licensee authorized to conduct gambling games at a 2 pari-mutuel racetrack enclosure or a licensee authorized to 3 operate an excursion gambling boat or gambling structure, 4 subject to the requirements of this chapter. The annual 5 renewal fee for a license to conduct or operate sports wagering 6 shall be five thousand dollars. 7 2. A licensee under this section shall do all of the 8 following: 9 a. Include on the internet site or mobile application used 10 by the licensee to conduct advance deposit sports wagering as 11 authorized in section 99F.9 the statewide telephone number 12 authorized by the Iowa department of public health to provide 13 problem gambling information and extensive responsible gaming 14 features in addition to those described in section 99F.4, 15 subsection 22. 16 b. Establish, subject to commission approval, sports 17 wagering rules that specify the amounts to be paid on winning 18 sports wagers, the effect of changes in the scheduling of an 19 authorized sporting event subject to sports wagering, and the 20 source of the information used to determine the outcome of a 21 sports wager. The sports wagering rules shall be displayed in 22 the licensee’s sports wagering area, posted on the internet 23 site or mobile application used by the licensee to conduct 24 advance deposit sports wagering as authorized in section 99F.9, 25 and included in the terms and conditions of the licensee’s 26 advance deposit sports wagering system. 27 3. A licensee under this section may enter into operating 28 agreements with one or two entities to have up to a total of 29 two individually branded internet sites to conduct advance 30 deposit sports wagering for the licensee, unless one additional 31 operating agreement or individually branded internet site is 32 authorized by the commission. 33 4. A licensee issued a license to conduct sports wagering 34 under this section shall employ reasonable steps to prohibit 35 -8- LSB 2133SZ (5) 88 ec/rn 8/ 38

S.F. 617 coaches, athletic trainers, officials, players, or other 1 individuals who participate in an authorized sporting event 2 that is the subject of sports wagering from sports wagering 3 under this chapter. In addition, a licensee shall employ 4 reasonable steps to prohibit persons who are employed in 5 a position with direct involvement with coaches, players, 6 athletic trainers, officials, players, or participants in 7 an authorized sporting event that is the subject of sports 8 wagering from sports wagering under this chapter. 9 Sec. 11. Section 99F.8, Code 2019, is amended to read as 10 follows: 11 99F.8 Bond of licensee. 12 A licensee licensed under section 99F.7 shall post a bond 13 to the state of Iowa before the license is issued in a sum 14 as the commission shall fix, with sureties to be approved by 15 the commission. The bond shall be used to guarantee that the 16 licensee faithfully makes the payments, keeps its books and 17 records and makes reports, and conducts its gambling games and 18 sports wagering in conformity with this chapter and the rules 19 adopted by the commission. The bond shall not be canceled by 20 a surety on less than thirty days’ notice in writing to the 21 commission. If a bond is canceled and the licensee fails to 22 file a new bond with the commission in the required amount on 23 or before the effective date of cancellation, the licensee’s 24 license shall be revoked. The total and aggregate liability 25 of the surety on the bond is limited to the amount specified in 26 the bond. 27 Sec. 12. Section 99F.9, subsection 1, Code 2019, is amended 28 to read as follows: 29 1. Except as permitted in this section , the licensee shall 30 not permit no sports wagering or any form of wagering on 31 gambling games. 32 Sec. 13. Section 99F.9, Code 2019, is amended by adding the 33 following new subsection: 34 NEW SUBSECTION . 3A. a. For the purposes of this section, 35 -9- LSB 2133SZ (5) 88 ec/rn 9/ 38

S.F. 617 unless the context otherwise requires: 1 (1) “Advance deposit sports wagering” means a method of 2 sports wagering in which an eligible individual may, in an 3 account established with a licensee under section 99F.7A, 4 deposit moneys into the account and use the account balance to 5 pay for sports wagering. Prior to January 1, 2021, an account 6 must be established by an eligible individual in person with 7 a licensee. 8 (2) “Advance deposit sports wagering operator” means an 9 advance deposit sports wagering operator licensed by the 10 commission who has entered into an agreement with a licensee 11 under section 99F.7A to provide advance deposit sports 12 wagering. 13 (3) “Eligible individual” means an individual who is at 14 least twenty-one years of age or older who is located within 15 this state. 16 b. The commission may authorize a licensee under section 17 99F.7A to conduct advance deposit sports wagering. An advance 18 deposit sports wager may be placed in person in the sports 19 wagering area, or from any other location via a telephone-type 20 device or any other electronic means. The commission may also 21 issue an advance deposit sports wagering operator license to 22 an entity who complies with this subsection and section 99F.6 23 and may require the advance deposit sports wagering operator to 24 conduct an audit consistent with the requirements of section 25 99F.13. 26 c. An unlicensed person taking or receiving sports wagers 27 from residents of this state is guilty of a class “D” felony. 28 Sec. 14. Section 99F.9, subsection 4, Code 2019, is amended 29 to read as follows: 30 4. A person under the age of twenty-one years shall not make 31 or attempt to make a wager pursuant to subsection 3A or on an 32 excursion gambling boat, gambling structure, or in a racetrack 33 enclosure and shall not be allowed on the gaming floor of 34 an excursion gambling boat or gambling structure or in the 35 -10- LSB 2133SZ (5) 88 ec/rn 10/ 38

S.F. 617 wagering area, as defined in section 99D.2 , or on the gaming 1 floor of a racetrack enclosure. However, a person eighteen 2 years of age or older may be employed to work on the gaming 3 floor of an excursion gambling boat or gambling structure or 4 in the wagering area or on the gaming floor of a racetrack 5 enclosure. A person who violates this subsection with respect 6 to making or attempting to make a wager commits a scheduled 7 violation under section 805.8C, subsection 5 , paragraph “a” . 8 Sec. 15. Section 99F.11, Code 2019, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 4. a. A tax is imposed on the sports 11 wagering net receipts received each fiscal year by a licensed 12 operator from sports wagering authorized under this chapter at 13 the rate of six and three-quarters percent. 14 b. The taxes imposed by this subsection for sports wagering 15 authorized under this chapter shall be paid by the licensed 16 operator to the treasurer of state as determined by the 17 commission and shall be distributed as follows: 18 (1) An amount equal to one-half of one percent of sports 19 wagering net receipts shall be deposited in the county 20 endowment fund created in section 15E.311. 21 (2) The remaining amount of sports wagering net receipts 22 taxes imposed pursuant to this subsection shall be credited as 23 provided in section 8.57, subsection 6. 24 Sec. 16. Section 99F.12, subsection 2, Code 2019, is amended 25 to read as follows: 26 2. a. The licensee shall furnish to the commission reports 27 and information as the commission may require with respect to 28 the licensee’s activities. 29 b. A licensee under section 99F.7A shall promptly report 30 to the commission any criminal or disciplinary proceedings 31 commenced against the licensee or its employees in connection 32 with the licensee conducting sports wagering or advance 33 deposit sports wagering, any abnormal wagering activity or 34 patterns that may indicate a concern about the integrity of an 35 -11- LSB 2133SZ (5) 88 ec/rn 11/ 38

S.F. 617 authorized sporting event or events, and any other conduct with 1 the potential to corrupt a wagering outcome of an authorized 2 sporting event for purposes of financial gain, including but 3 not limited to match fixing, and suspicious or illegal wagering 4 activities, including the use of funds derived from illegal 5 activity, wagers to conceal or launder funds derived from 6 illegal activity, use of agents to place wagers, or use of 7 false identification. The commission shall promptly report 8 any information received pursuant to this paragraph with any 9 law enforcement entity, sports team, sports governing body, or 10 regulatory agency the commission deems appropriate. 11 c. The gross receipts and adjusted gross receipts from 12 gambling shall be separately handled and accounted for from 13 all other moneys received from operation of an excursion 14 gambling boat or from operation of a racetrack enclosure or 15 gambling structure licensed to conduct gambling games. The 16 commission may designate a representative to board a licensed 17 excursion gambling boat or to enter a racetrack enclosure or 18 gambling structure licensed to conduct gambling games. The 19 representative shall have full access to all places within the 20 enclosure of the boat, the gambling structure, or the racetrack 21 enclosure and shall directly supervise the handling and 22 accounting of all gross receipts and adjusted gross receipts 23 from gambling. The representative shall supervise and check 24 the admissions. The compensation of a representative shall be 25 fixed by the commission but shall be paid by the licensee. 26 d. With the approval of the commission, a licensee under 27 section 99F.7A shall cooperate with investigations conducted 28 by sports governing bodies, including but not limited to 29 providing or facilitating the provision of account-level 30 betting information and audio or video files relating to 31 persons placing wagers. 32 Sec. 17. Section 99F.15, subsection 1, paragraph c, Code 33 2019, is amended to read as follows: 34 c. Acting, or employing a person to act, as a shill or 35 -12- LSB 2133SZ (5) 88 ec/rn 12/ 38

S.F. 617 decoy to encourage participation in a gambling game or sports 1 wagering . 2 Sec. 18. Section 99F.15, subsection 4, paragraphs d, h, and 3 i, Code 2019, are amended to read as follows: 4 d. Cheats at a gambling game, including but not limited to 5 committing any act which alters the outcome of the game , or 6 cheats at sports wagering . 7 h. Claims, collects, or takes, or attempts to claim, 8 collect, or take, money or anything of value in or from the 9 gambling games or sports wagering , with intent to defraud, 10 without having made a wager contingent on winning a gambling 11 game or sports wager , or claims, collects, or takes an amount 12 of money or thing of value of greater value than the amount 13 won. 14 i. Knowingly entices or induces a person to go to any place 15 where a gambling game or sports wagering is being conducted or 16 operated in violation of the provisions of this chapter with 17 the intent that the other person plays or participates in that 18 gambling game or sports wagering . 19 Sec. 19. Section 99F.20, subsection 1, Code 2019, is amended 20 to read as follows: 21 1. A gaming regulatory revolving fund is created in 22 the state treasury under the control of the department of 23 inspections and appeals. The fund shall consist of fees 24 collected and deposited into the fund paid by licensees 25 pursuant to section 99D.14, subsection 2 , paragraph “c” , fees 26 paid by licensees pursuant to section 99E.5, subsection 4, 27 paragraph “c” , regulatory fees paid by licensees pursuant 28 to section 99F.4, subsection 27, and fees paid by licensees 29 pursuant to section 99F.10, subsection 4 , paragraph “c” . All 30 costs relating to racetrack, excursion boat, and gambling 31 structure , internet fantasy sports contests as defined in 32 section 99E.1, and sports wagering regulation shall be paid 33 from the fund as provided in appropriations made for this 34 purpose by the general assembly. The department shall provide 35 -13- LSB 2133SZ (5) 88 ec/rn 13/ 38

S.F. 617 quarterly reports to the department of management and the 1 legislative services agency specifying revenues billed and 2 collected and expenditures from the fund in a format as 3 determined by the department of management in consultation with 4 the legislative services agency. 5 Sec. 20. TEMPORARY LICENSE —— ADVANCE DEPOSIT SPORTS 6 WAGERING OPERATOR. The racing and gaming commission shall, 7 upon submission of an application to the commission on a form 8 prescribed by the commission, issue a temporary license as an 9 advance deposit sports wagering operator to a person that the 10 commission has determined is authorized and in good standing 11 by another state, territory, or district of the United States 12 to operate sports wagering, has paid any required fees, and 13 is otherwise in compliance with this section. The temporary 14 license shall authorize the person to provide advance deposit 15 sports wagering for a licensee under section 99F.7A, as enacted 16 by this Act, as an advance deposit sports wagering operator 17 pursuant to an agreement with the licensee under section 18 99F.7A, as enacted by this Act. The temporary license shall 19 be valid until the earlier of the date the racing and gaming 20 commission grants or denies a license to the advance deposit 21 sports wagering operator or twelve months from the date the 22 racing and gaming commission issues the temporary license 23 pursuant to this section. 24 Sec. 21. EMERGENCY RULES. The state racing and gaming 25 commission created under section 99D.5 may adopt emergency 26 rules under section 17A.4, subsection 3, and section 17A.5, 27 subsection 2, paragraph “b”, to implement the provisions of 28 this division of this Act and the rules shall be effective 29 immediately upon filing unless a later date is specified in the 30 rules but in no event earlier than July 4, 2019. Any rules 31 adopted in accordance with this section shall also be published 32 as a notice of intended action as provided in section 17A.4. 33 Sec. 22. IMPLEMENTATION. The racing and gaming commission 34 shall not implement this division of this Act until the later 35 -14- LSB 2133SZ (5) 88 ec/rn 14/ 38

S.F. 617 of July 4, 2019, or the date the commission has adopted rules 1 pursuant to chapter 17A providing for such implementation and 2 such rules have become effective. 3 Sec. 23. EFFECTIVE DATE. This division of this Act, being 4 deemed of immediate importance, takes effect upon enactment. 5 DIVISION II 6 FANTASY SPORTS CONTESTS 7 Sec. 24. Section 80.25A, Code 2019, is amended to read as 8 follows: 9 80.25A Pari-mutuel and gambling game Gaming operations 10 investigation and enforcement. 11 The commissioner of public safety shall direct the chief 12 of the division of criminal investigation to establish a 13 subdivision to be the primary criminal investigative and 14 enforcement agency for the purpose of enforcement of chapters 15 99D , 99E, and 99F . The commissioner of public safety shall 16 appoint or assign other agents to the division as necessary to 17 enforce chapters 99D , 99E, and 99F . All enforcement officers, 18 assistants, and agents of the division are subject to section 19 80.15 except clerical workers. 20 Sec. 25. NEW SECTION . 99E.1 Definitions. 21 As used in this chapter, unless the context otherwise 22 requires: 23 1. “Applicant” means an internet fantasy sports contest 24 service provider applying for a license to conduct internet 25 fantasy sports contests under this chapter. 26 2. “Commission” means the state racing and gaming commission 27 created under section 99D.5. 28 3. “Fantasy sports contest” includes any fantasy or 29 simulated game or contest in which the fantasy sports contest 30 operator is not a participant in the game or contest, the value 31 of all prizes and awards offered to winning participants are 32 established and made known to the participants in advance 33 of the contest, all winning outcomes reflect the relative 34 knowledge and skill of the participants and shall be determined 35 -15- LSB 2133SZ (5) 88 ec/rn 15/ 38

S.F. 617 by accumulated statistical results of the performance of 1 individuals, including athletes in the case of sporting events, 2 and no winning outcome is solely based on the score, point 3 spread, or any performance or performances of any single actual 4 team or solely on any single performance of an individual 5 athlete or player in any single actual event. 6 4. “Internet fantasy sports contest” means a method of 7 entering a fantasy sports contest by which a person may 8 establish an account with an internet fantasy sports contest 9 service provider, deposit money into the account, and use 10 the account balance for entering a fantasy sports contest by 11 utilizing electronic communication. 12 5. “Internet fantasy sports contest adjusted revenues” means, 13 for each internet fantasy sports contest, the amount equal to 14 the total charges and fees collected from all participants 15 entering the internet fantasy sports contest less winnings paid 16 to participants in the contest, multiplied by the location 17 percentage. 18 6. “Internet fantasy sports contest player” means a person 19 who is at least twenty-one years of age and participates in an 20 internet fantasy sports contest operated by an internet fantasy 21 sports contest service provider. 22 7. “Internet fantasy sports contest service provider” means 23 a person, including a licensee under chapter 99D or 99F, who 24 conducts an internet fantasy sports contest as authorized by 25 this chapter. 26 8. “Location percentage” means, for each internet fantasy 27 sports contest, the percentage, rounded to the nearest tenth of 28 a percent, equal to the total charges and fees collected from 29 all internet fantasy sports contest players located in this 30 state divided by the total charges and fees collected from all 31 participants in the internet fantasy sports contest. 32 Sec. 26. NEW SECTION . 99E.2 Internet fantasy sports 33 contests authorized. 34 The system of entering an internet fantasy sports contest as 35 -16- LSB 2133SZ (5) 88 ec/rn 16/ 38

S.F. 617 provided by this chapter is legal when conducted by a licensed 1 internet fantasy sports contest service provider as provided in 2 this chapter. 3 Sec. 27. NEW SECTION . 99E.3 Commission —— powers. 4 1. The commission shall have full jurisdiction over and 5 shall supervise internet fantasy sports contests and internet 6 fantasy sports contest service providers as governed by this 7 chapter. 8 2. The commission shall have the following powers and shall 9 adopt rules pursuant to chapter 17A to administer and implement 10 this chapter: 11 a. To review and investigate applicants and determine the 12 eligibility of applicants for a license to conduct internet 13 fantasy sports contests, pursuant to rules adopted by the 14 commission. 15 b. To license and regulate internet fantasy sports contest 16 service providers subject to the requirements of this chapter. 17 c. To provide for the prevention of practices detrimental to 18 the public and to provide for the best interests of internet 19 fantasy sports contests. 20 d. To investigate alleged violations of this chapter 21 or the commission rules, orders, or final decisions and to 22 take appropriate disciplinary action against a licensee, or 23 institute appropriate legal action for enforcement, or both. 24 Information gathered during an investigation is confidential 25 during the pendency of the investigation. 26 e. To assess fines and revoke or suspend licenses and to 27 impose penalties for violations of this chapter. 28 f. To take any other action as may be reasonable or 29 appropriate to enforce this chapter and the commission rules. 30 Sec. 28. NEW SECTION . 99E.4 Requirements of applicant —— 31 fee. 32 1. An applicant for a license to conduct internet fantasy 33 sports contests shall complete and sign an application on 34 the form prescribed and published by the commission. The 35 -17- LSB 2133SZ (5) 88 ec/rn 17/ 38

S.F. 617 application shall include such information of the applicant 1 that the commission deems necessary for purposes of issuing a 2 license pursuant to this chapter. 3 2. An applicant shall submit fingerprints and information 4 that the commission deems necessary to the commission in the 5 manner prescribed on the application forms. The fingerprints 6 may be submitted to the federal bureau of investigation by 7 the department of public safety through the state criminal 8 history repository for the purpose of a national criminal 9 history check. The results of a criminal history record check 10 conducted pursuant to this subsection shall be considered a 11 confidential record under chapter 22. 12 3. If the commission is not satisfied that it can determine 13 if an applicant meets the requirements necessary for issuing 14 a license pursuant to this chapter, the commission may 15 request the department of public safety, division of criminal 16 investigation, to investigate and obtain the information 17 necessary for the commission to make a determination on whether 18 to issue the applicant a license. 19 4. The commission shall charge the applicant a reasonable 20 fee set by the department of public safety, division of 21 criminal investigation, to defray those costs associated 22 with the fingerprint and national criminal history check 23 requirements of subsection 2 concerning the applicant. In 24 addition, if the commission requests that an additional 25 investigation be conducted by the division of criminal 26 investigation as provided in subsection 3, the commission shall 27 charge the applicant the reasonable costs of this additional 28 investigation. These fees and costs are in addition to any 29 other license fees and costs charged by the commission. The 30 fees and costs may be retained by the department of public 31 safety, division of criminal investigation, and shall be 32 considered repayment receipts as defined in section 8.2. 33 5. The commission shall not grant a license to an applicant 34 if there is substantial evidence that any of the following 35 -18- LSB 2133SZ (5) 88 ec/rn 18/ 38

S.F. 617 apply: 1 a. A license issued to the applicant to conduct internet 2 fantasy sports contests in another jurisdiction has been 3 revoked, or a request for a license to conduct internet fantasy 4 sports contests in another jurisdiction has been denied, by 5 an entity licensing persons to conduct such contests in that 6 jurisdiction. 7 b. The applicant has not demonstrated financial 8 responsibility sufficient to adequately meet the requirements 9 of the enterprise proposed. 10 c. The applicant does not adequately disclose the true 11 owners of the enterprise proposed. 12 d. The applicant has knowingly made a false statement of a 13 material fact to the commission. 14 e. The applicant has failed to meet a monetary obligation in 15 connection with conducting an internet fantasy sports contest. 16 f. The applicant is not of good repute and moral character 17 or the applicant has pled guilty to, or has been convicted of, 18 a felony. 19 g. Any member of the board of directors of the applicant is 20 not twenty-one years of age or older. 21 6. A person who knowingly makes a false statement on the 22 application is guilty of an aggravated misdemeanor. 23 7. For the purposes of this section, “applicant” includes 24 each member of the board of directors of an internet fantasy 25 sports contest service provider. 26 Sec. 29. NEW SECTION . 99E.5 Licenses —— fees —— terms and 27 conditions —— revocation. 28 1. If the commission is satisfied that the requirements 29 of this chapter and its rules adopted under this chapter 30 applicable to licensees have been or will be complied with, the 31 commission shall, upon payment of an initial annual license 32 fee of five thousand dollars, issue a license for a period of 33 not more than three years to an applicant to conduct internet 34 fantasy sports contests in this state. 35 -19- LSB 2133SZ (5) 88 ec/rn 19/ 38