Senate File 617 - Reprinted SENATE FILE 617 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 366) (SUCCESSOR TO SSB 1168) (As Amended and Passed by the Senate April 17, 2019 ) 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 SF 617 (8) 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 an 13 initial request by a person to be voluntarily excluded shall be 14 for a period of five years or life and any subsequent request 15 following any five-year period shall be for a period of five 16 years or life. The process established shall require that 17 licensees be provided electronic access to names and social 18 security numbers of persons voluntarily excluded through a 19 secured interactive internet site maintained by the commission 20 and information regarding persons voluntarily excluded shall 21 be disseminated to all licensees under this chapter , chapter 22 99E, and chapter 99F . The names, social security numbers, and 23 information regarding persons voluntarily excluded shall be 24 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 , 30 chapter 99E, or chapter 99F shall not be liable to any person 31 for any claim which may arise from this process. In addition 32 to any other penalty provided by law, any money or thing of 33 value that has been obtained by, or is owed to, a voluntarily 34 excluded person as a result of wagers made by the person after 35 -1- SF 617 (8) 88 ec/rn 1/ 30

S.F. 617 the person has been voluntarily excluded shall be forfeited by 1 the person and shall be credited to the general fund of the 2 state. 3 Sec. 2. Section 99F.1, subsection 1, Code 2019, is amended 4 to read as follows: 5 1. “Adjusted gross receipts” means the gross receipts less 6 winnings paid to wagerers on gambling games . However, “adjusted 7 gross receipts” does not include promotional play receipts 8 received after the date in any fiscal year that the commission 9 determines that the wagering tax imposed pursuant to section 10 99F.11 on all licensees in that fiscal year on promotional 11 play receipts exceeds twenty-five million eight hundred twenty 12 thousand dollars. 13 Sec. 3. Section 99F.1, Code 2019, is amended by adding the 14 following new subsections: 15 NEW SUBSECTION . 2A. “Authorized sporting event” means 16 a professional sporting event, collegiate sporting event, 17 international sporting event, or professional motor race 18 event. “Authorized sporting event” does not include a race as 19 defined in section 99D.2, a fantasy sports contest as defined 20 in section 99E.1, minor league sporting event, or any athletic 21 event or competition of an interscholastic sport as defined in 22 section 9A.102. 23 NEW SUBSECTION . 4A. “Collegiate sporting event” means an 24 athletic event or competition of an intercollegiate sport as 25 defined in section 9A.102. 26 NEW SUBSECTION . 16A. “International sporting event” means 27 an international team or individual sporting event governed by 28 an international sports federation or sports governing body, 29 including sporting events governed by the international olympic 30 committee and the international federation of association 31 football. 32 NEW SUBSECTION . 18A. “Minor league sporting event” means 33 a sporting event conducted by a sports league which is not 34 regarded as the premier league in the sport as determined by 35 -2- SF 617 (8) 88 ec/rn 2/ 30

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

S.F. 617 Sec. 6. Section 99F.4, subsections 3 and 22, Code 2019, are 1 amended to read as follows: 2 3. To adopt standards under which all excursion gambling 3 boat operations shall be held and standards for the facilities 4 within which the gambling operations are to be held. The 5 commission may authorize the operation of gambling games on 6 an excursion gambling boat and sports wagering in a sports 7 wagering area which is also licensed to sell or serve alcoholic 8 beverages, wine, or beer as defined in section 123.3 . 9 22. To establish a process to allow a person to be 10 voluntarily excluded from advance deposit wagering as defined 11 in section 99D.11, from an internet fantasy sports contest as 12 defined in section 99E.1, from advance deposit sports wagering 13 as defined in section 99F.9, from the gaming floor and sports 14 wagering area of an excursion gambling boat, from the wagering 15 area, as defined in section 99D.2 , and from the gaming floor 16 and sports wagering area of all other licensed facilities under 17 this chapter and chapter 99D as provided in this subsection . 18 The process shall provide that an initial request by a person 19 to be voluntarily excluded shall be for a period of five years 20 or life and any subsequent request following any five-year 21 period shall be for a period of five years or life. The process 22 established shall require that licensees be provided electronic 23 access to names and social security numbers of persons 24 voluntarily excluded through a secured interactive internet 25 site maintained by the commission and information regarding 26 persons voluntarily excluded shall be disseminated to all 27 licensees under this chapter , and chapter 99D , and chapter 99E . 28 The names, social security numbers, and information regarding 29 persons voluntarily excluded shall be kept confidential 30 unless otherwise ordered by a court or by another person 31 duly authorized to release such information. The process 32 established shall also require a person requesting to be 33 voluntarily excluded be provided information compiled by the 34 Iowa department of public health on gambling treatment options. 35 -4- SF 617 (8) 88 ec/rn 4/ 30

S.F. 617 The state and any licensee under this chapter , or chapter 99D , 1 or chapter 99E shall not be liable to any person for any claim 2 which may arise from this process. In addition to any other 3 penalty provided by law, any money or thing of value that has 4 been obtained by, or is owed to, a voluntarily excluded person 5 as a result of wagers made by the person after the person has 6 been voluntarily excluded shall be forfeited by the person and 7 shall be credited to the general fund of the state. 8 Sec. 7. Section 99F.4, Code 2019, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 27. To adopt standards under which all 11 sports wagering is conducted, including the scope and type of 12 wagers allowed, to identify occupations within sports wagering 13 which require licensing, and to adopt standards for licensing 14 and background qualifications for occupations including 15 establishing fees for the occupational license. All revenue 16 received by the commission under this chapter from license fees 17 shall be deposited in the general fund of the state and shall 18 be subject to the requirements of section 8.60. All revenue 19 received by the commission from regulatory fees shall be 20 deposited into the gaming regulatory revolving fund established 21 in section 99F.20. 22 Sec. 8. Section 99F.5, subsection 1, Code 2019, is amended 23 to read as follows: 24 1. A qualified sponsoring organization may apply to the 25 commission for a license to conduct gambling games on an 26 excursion gambling boat or gambling structure as provided in 27 this chapter . A person may apply to the commission for a 28 license to operate an excursion gambling boat. An operating 29 agreement entered into on or after May 6, 2004, between 30 a qualified sponsoring organization and an operator of an 31 excursion gambling boat or gambling structure shall provide for 32 a minimum distribution by the qualified sponsoring organization 33 for educational, civic, public, charitable, patriotic, or 34 religious uses as defined in section 99B.1 , that averages at 35 -5- SF 617 (8) 88 ec/rn 5/ 30

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

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

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

S.F. 617 athletic trainers, officials, players, or participants in 1 an authorized sporting event that is the subject of sports 2 wagering from sports wagering under this chapter. 3 Sec. 11. Section 99F.8, Code 2019, is amended to read as 4 follows: 5 99F.8 Bond of licensee. 6 A licensee licensed under section 99F.7 shall post a bond 7 to the state of Iowa before the license is issued in a sum 8 as the commission shall fix, with sureties to be approved by 9 the commission. The bond shall be used to guarantee that the 10 licensee faithfully makes the payments, keeps its books and 11 records and makes reports, and conducts its gambling games and 12 sports wagering in conformity with this chapter and the rules 13 adopted by the commission. The bond shall not be canceled by 14 a surety on less than thirty days’ notice in writing to the 15 commission. If a bond is canceled and the licensee fails to 16 file a new bond with the commission in the required amount on 17 or before the effective date of cancellation, the licensee’s 18 license shall be revoked. The total and aggregate liability 19 of the surety on the bond is limited to the amount specified in 20 the bond. 21 Sec. 12. Section 99F.9, subsection 1, Code 2019, is amended 22 to read as follows: 23 1. Except as permitted in this section , the licensee shall 24 not permit no sports wagering or any form of wagering on 25 gambling games. 26 Sec. 13. Section 99F.9, Code 2019, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 3A. a. For the purposes of this section, 29 unless the context otherwise requires: 30 (1) “Advance deposit sports wagering” means a method of 31 sports wagering in which an eligible individual may, in an 32 account established with a licensee under section 99F.7A, 33 deposit moneys into the account and use the account balance to 34 pay for sports wagering. Prior to January 1, 2021, an account 35 -9- SF 617 (8) 88 ec/rn 9/ 30

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

S.F. 617 to making or attempting to make a wager commits a scheduled 1 violation under section 805.8C, subsection 5 , paragraph “a” . 2 Sec. 15. Section 99F.11, subsection 3, unnumbered paragraph 3 1, Code 2019, is amended to read as follows: 4 The taxes imposed by this section on adjusted gross receipts 5 from gambling games authorized under this chapter shall be paid 6 by the licensee to the treasurer of state within ten days after 7 the close of the day when the wagers were made and shall be 8 distributed as follows: 9 Sec. 16. Section 99F.11, Code 2019, is amended by adding the 10 following new subsection: 11 NEW SUBSECTION . 4. a. A tax is imposed on the sports 12 wagering net receipts received each fiscal year by a licensed 13 operator from sports wagering authorized under this chapter at 14 the rate of six and three-quarters percent. 15 b. The taxes imposed by this subsection for sports wagering 16 authorized under this chapter shall be paid by the licensed 17 operator to the treasurer of state as determined by the 18 commission and shall be credited as provided in section 8.57, 19 subsection 6. 20 Sec. 17. Section 99F.12, subsection 2, Code 2019, is amended 21 to read as follows: 22 2. a. The licensee shall furnish to the commission reports 23 and information as the commission may require with respect to 24 the licensee’s activities. 25 b. A licensee under section 99F.7A shall promptly report 26 to the commission any criminal or disciplinary proceedings 27 commenced against the licensee or its employees in connection 28 with the licensee conducting sports wagering or advance 29 deposit sports wagering, any abnormal wagering activity or 30 patterns that may indicate a concern about the integrity of an 31 authorized sporting event or events, and any other conduct with 32 the potential to corrupt a wagering outcome of an authorized 33 sporting event for purposes of financial gain, including 34 but not limited to match fixing, and suspicious or illegal 35 -11- SF 617 (8) 88 ec/rn 11/ 30

S.F. 617 wagering activities, including the use of funds derived from 1 illegal activity, wagers to conceal or launder funds derived 2 from illegal activity, use of agents to place wagers, or use 3 of false identification. The commission is required to share 4 any information received pursuant to this paragraph with the 5 division of criminal investigation, any other law enforcement 6 entity upon request, or any regulatory agency the commission 7 deems appropriate. The commission shall promptly report any 8 information received pursuant to this paragraph with any 9 sports team or sports governing body as the commission deems 10 appropriate, but shall not share any information that would 11 interfere with an ongoing criminal investigation. 12 c. The gross receipts and adjusted gross receipts from 13 gambling shall be separately handled and accounted for from 14 all other moneys received from operation of an excursion 15 gambling boat or from operation of a racetrack enclosure or 16 gambling structure licensed to conduct gambling games. The 17 commission may designate a representative to board a licensed 18 excursion gambling boat or to enter a racetrack enclosure or 19 gambling structure licensed to conduct gambling games. The 20 representative shall have full access to all places within the 21 enclosure of the boat, the gambling structure, or the racetrack 22 enclosure and shall directly supervise the handling and 23 accounting of all gross receipts and adjusted gross receipts 24 from gambling. The representative shall supervise and check 25 the admissions. The compensation of a representative shall be 26 fixed by the commission but shall be paid by the licensee. 27 d. With the approval of the commission, a licensee under 28 section 99F.7A shall cooperate with investigations conducted 29 by sports governing bodies, including but not limited to 30 providing or facilitating the provision of account-level 31 betting information and audio or video files relating to 32 persons placing wagers. However, a licensee shall not share 33 information that would interfere with an ongoing criminal 34 investigation. 35 -12- SF 617 (8) 88 ec/rn 12/ 30

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

S.F. 617 section 99E.1, and sports wagering regulation shall be paid 1 from the fund as provided in appropriations made for this 2 purpose by the general assembly. The department shall provide 3 quarterly reports to the department of management and the 4 legislative services agency specifying revenues billed and 5 collected and expenditures from the fund in a format as 6 determined by the department of management in consultation with 7 the legislative services agency. 8 Sec. 21. EMERGENCY RULES. The state racing and gaming 9 commission created under section 99D.5 may adopt emergency 10 rules under section 17A.4, subsection 3, and section 17A.5, 11 subsection 2, paragraph “b”, to implement the provisions of 12 this division of this Act and the rules shall be effective 13 immediately upon filing unless a later date is specified in the 14 rules but in no event earlier than July 4, 2019. Any rules 15 adopted in accordance with this section shall also be published 16 as a notice of intended action as provided in section 17A.4. 17 Sec. 22. IMPLEMENTATION. The racing and gaming commission 18 shall not implement this division of this Act until the later 19 of July 4, 2019, or the date the commission has adopted rules 20 pursuant to chapter 17A providing for such implementation and 21 such rules have become effective. 22 Sec. 23. EFFECTIVE DATE. This division of this Act, being 23 deemed of immediate importance, takes effect upon enactment. 24 DIVISION II 25 FANTASY SPORTS CONTESTS 26 Sec. 24. Section 80.25A, Code 2019, is amended to read as 27 follows: 28 80.25A Pari-mutuel and gambling game Gaming operations 29 investigation and enforcement. 30 The commissioner of public safety shall direct the chief 31 of the division of criminal investigation to establish a 32 subdivision to be the primary criminal investigative and 33 enforcement agency for the purpose of enforcement of chapters 34 99D , 99E, and 99F . The commissioner of public safety shall 35 -14- SF 617 (8) 88 ec/rn 14/ 30

S.F. 617 appoint or assign other agents to the division as necessary to 1 enforce chapters 99D , 99E, and 99F . All enforcement officers, 2 assistants, and agents of the division are subject to section 3 80.15 except clerical workers. 4 Sec. 25. Section 80.43, subsection 1, Code 2019, is amended 5 to read as follows: 6 1. A gaming enforcement revolving fund is created in the 7 state treasury under the control of the department. The fund 8 shall consist of fees collected and deposited into the fund 9 paid by licensees pursuant to section 99D.14, subsection 2 , 10 paragraph “b” , fees and costs paid by applicants pursuant 11 to section 99E.4, subsection 4, and fees paid by licensees 12 pursuant to section 99F.10, subsection 4 , paragraph “b” . All 13 costs for agents and officers plus any direct support costs 14 for such agents and officers of the division of criminal 15 investigation’s racetrack, excursion boat, or gambling 16 structure , and internet fantasy sports contests as defined in 17 section 99E.1 enforcement activities shall be paid from the 18 fund as provided in appropriations made for this purpose by the 19 general assembly. 20 Sec. 26. 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- SF 617 (8) 88 ec/rn 15/ 30

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. However, until 6 May 1, 2020, “fantasy sports contest” does not include any 7 fantasy or simulated game or contest in which any winning 8 outcomes are based on statistical results from a collegiate 9 sporting event as defined in section 99F.1. 10 4. “Internet fantasy sports contest” means a method of 11 entering a fantasy sports contest by which a person may 12 establish an account with an internet fantasy sports contest 13 service provider, deposit money into the account, and use 14 the account balance for entering a fantasy sports contest by 15 utilizing electronic communication. 16 5. “Internet fantasy sports contest adjusted revenues” means, 17 for each internet fantasy sports contest, the amount equal to 18 the total charges and fees collected from all participants 19 entering the internet fantasy sports contest less winnings paid 20 to participants in the contest, multiplied by the location 21 percentage. 22 6. “Internet fantasy sports contest player” means a person 23 who is at least twenty-one years of age and participates in an 24 internet fantasy sports contest operated by an internet fantasy 25 sports contest service provider. 26 7. “Internet fantasy sports contest service provider” means 27 a person, including a licensee under chapter 99D or 99F, who 28 conducts an internet fantasy sports contest as authorized by 29 this chapter. 30 8. “Licensee” means any person licensed under section 99E.5 31 to conduct internet fantasy sports contests. 32 9. “Location percentage” means, for each internet fantasy 33 sports contest, the percentage, rounded to the nearest tenth of 34 a percent, equal to the total charges and fees collected from 35 -16- SF 617 (8) 88 ec/rn 16/ 30

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

S.F. 617 appropriate to enforce this chapter and the commission rules. 1 Sec. 29. NEW SECTION . 99E.4 Requirements of applicant —— 2 fee. 3 1. An applicant for a license to conduct internet fantasy 4 sports contests shall complete and sign an application on 5 the form prescribed and published by the commission. The 6 application shall include such information of the applicant 7 that the commission deems necessary for purposes of issuing a 8 license pursuant to this chapter. 9 2. An applicant shall submit fingerprints and information 10 that the commission deems necessary to the commission in the 11 manner prescribed on the application forms. The fingerprints 12 may be submitted to the federal bureau of investigation by 13 the department of public safety through the state criminal 14 history repository for the purpose of a national criminal 15 history check. The results of a criminal history record check 16 conducted pursuant to this subsection shall be considered a 17 confidential record under chapter 22. 18 3. Before a license is granted, the division of criminal 19 investigation of the department of public safety shall conduct 20 a thorough background investigation of the applicant for a 21 license to conduct internet fantasy sports contests. The 22 applicant shall provide information on a form as required by 23 the division of criminal investigation. 24 4. The commission shall charge the applicant a reasonable 25 fee set by the division of criminal investigation of the 26 department of public safety, to defray those costs associated 27 with the fingerprint and national criminal history check 28 requirements of subsection 2 and background investigations 29 conducted by agents of the division of criminal investigation 30 as provided in subsection 3. These fees and costs are in 31 addition to any other license fees and costs charged by the 32 commission. The fees and costs received by the commission 33 shall be deposited in the gaming enforcement revolving fund 34 established in section 80.43. 35 -18- SF 617 (8) 88 ec/rn 18/ 30

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