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House Study Bill 102 - IntroducedA Bill ForAn Act 1relating to wagering, by providing for fantasy sports
2contests and sports wagering, providing for taxes and fees,
3making penalties applicable, and including effective date
4provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SPORTS WAGERING
3 Section 1. NEW SECTION. 99C.1 Definitions.
4As used in this chapter, unless the context otherwise
5requires:
61. “Applicant” means a person applying for a license as an
7interactive sports wagering platform.
82. “Commission” means the state racing and gaming commission
9created under section 99D.5.
103. “Division” means the division of criminal investigation
11of the department of public safety as provided in section
1280.17.
134. “Gaming licensee” means any person licensed under section
1499F.4A or 99F.7 to conduct gambling games under chapter 99F.
155. “Interactive sports wagering platform” means a person
16licensed by the commission to conduct sports wagering pursuant
17to this chapter via a telephone-type device or any other
18electronic means to include an interactive internet site.
196. “Official league data” means statistics, results,
20outcomes, and other data relating to a sporting event obtained
21pursuant to an agreement with the relevant sports governing
22body, or an entity expressly authorized by the sports governing
23body to provide such information to sports wagering operators,
24which authorizes the use of such data for determining the
25outcome of tier two sports wagers.
267. “Registered sports governing body” means a sports
27governing body that is headquartered in the United States and
28has registered with the commission pursuant to this chapter.
298. “Sporting event” includes portions of a sporting event or
30sporting events, and any individual performance statistics of
31athletes in a sporting event or combination of sporting events.
329. “Sports governing body” means the organization that
33prescribes final rules and enforces codes of conduct with
34respect to a sporting event and participants therein.
3510. “Sports wagering” means accepting wagers on a sporting
-1-1event, by any system or method of wagering, including but not
2limited to in-person, over the internet through websites,
3and on mobile devices. “Sports wagering” includes but is not
4limited to single-game bets, teaser bets, parlays, over-under,
5moneyline, pools, exchange wagering, in-game wagering, in-play
6bets, proposition bets, and straight bets. “Sports wagering”
7does not include entering a fantasy sports contest as defined
8in section 99E.1.
911. “Sports wagering operator” means an interactive sports
10wagering platform who has entered into an agreement with a
11gaming licensee to conduct sports wagering on behalf of the
12gaming licensee or a gaming licensee that conducts sports
13wagering as provided by this chapter.
1412. “Tier one sports wager” means a sports wager that is
15determined solely by the final score or final outcome of the
16sporting event and is placed before the sporting event has
17begun.
1813. “Tier two sports wager” means a sports wager that is not
19a tier one sports wager.
2014. “Wager” or “bet” means the staking or risking by a
21person of something of value upon an agreement or understanding
22that the person or another person will receive something of
23value in the event of a certain outcome. “Wager” or “bet” does
24not include any activity governed by the securities laws of
25the United States or this state, any contract of indemnity or
26guarantee, any contract for insurance, or participation in
27any game or contest in which the participants do not stake
28or risk anything of value other than personal efforts of the
29participants in playing the game or contest or obtaining access
30to the internet, or points or credits that the sponsor of the
31game or contest provides to participants free of charge and
32that can be used or redeemed only for participation in games or
33contests offered by the sponsor.
34 Sec. 2. NEW SECTION. 99C.2 Sports wagering authorized.
35The system of sports wagering as provided by this chapter is
-2-1legal, when conducted by a sports wagering operator as provided
2in this chapter.
3 Sec. 3. NEW SECTION. 99C.3 Commission — powers.
41. The commission shall have full jurisdiction over and
5shall supervise sports wagering and sports wagering operators
6as governed by this chapter.
72. The commission shall have the following powers and shall
8adopt rules pursuant to chapter 17A to administer and implement
9this chapter:
10a. To review and investigate applicants and determine the
11eligibility of applicants for a license as an interactive
12sports wagering platform, pursuant to rules adopted by the
13commission.
14b. To license interactive sports wagering platforms and to
15regulate sports wagering operators subject to the requirements
16of this chapter.
17c. To provide for the prevention of practices detrimental
18to the public and to provide for the best interests of sports
19wagering.
20d. To investigate alleged violations of this chapter
21or the commission rules, orders, or final decisions and
22to take appropriate disciplinary action against a sports
23wagering operator, or institute appropriate legal action
24for enforcement, or both. Information gathered during an
25investigation is confidential during the pendency of the
26investigation.
27e. To assess fines and revoke or suspend licenses and to
28impose penalties for violations of this chapter.
29f. To establish procedures for allowing a sports governing
30body, upon notification of the commission, to restrict,
31limit, or exclude wagers on sporting events, or portions of
32sporting events, regulated by the sports governing body from
33sports wagering as provided by this chapter and to, without
34limitation, restrict the sources of data and associated video
35upon which a sports wagering operator may rely in offering
-3-1and paying wagers and the bet types that may be offered on a
2sporting event regulated by the sports governing body. The
3procedures will provide that the commission shall only deny
4a request made by a sports governing body pursuant to this
5paragraph if the commission deems such request arbitrary
6and capricious and shall provide a sports governing body
7with an opportunity for a hearing under chapter 17A if a
8request is denied. The procedures shall also provide that the
9administrator of the commission may temporarily grant a request
10by a sports governing body pending a final decision on whether
11to grant the request.
12g. To provide for a sports governing body to register with
13the commission if the sports governing body is headquartered
14in the United States upon completion of such registration form
15as the commission may require.
16h. To provide that advertisements for sports wagering by
17a sports wagering operator does not target minors or other
18persons who are ineligible to place wagers, problem gamblers,
19or other vulnerable persons, which may include limitations
20on the form, content, quantity, timing, and location of
21advertisements; discloses the identity of the sports wagering
22operator; provides information about or links to resources
23relating to gambling addiction; and are not false, misleading,
24or deceptive to a reasonable consumer.
25i. To take any other action as may be reasonable or
26appropriate to enforce this chapter and the commission rules.
27 Sec. 4. NEW SECTION. 99C.4 Authority to conduct sports
28wagering — licenses — fees.
291. a. An applicant for a license as an interactive sports
30wagering platform shall complete and sign an application on
31the form prescribed and published by the commission. The
32application shall include such information regarding the
33applicant that the commission deems necessary for purposes of
34issuing a license pursuant to this chapter.
35b. If the commission is satisfied that the requirements
-4-1of this chapter and its rules adopted under this chapter
2applicable to licensees have been or will be complied with,
3the commission may issue a license to an applicant as an
4interactive sports wagering platform to conduct sports wagering
5in this state. A licensed interactive sports wagering platform
6may enter into agreements to offer sports wagering on behalf of
7one or more gaming licensees without limitation. However, a
8gaming licensee authorized to conduct sports wagering pursuant
9to this section may enter into agreements with no more than two
10licensed interactive sports wagering platforms to offer sports
11wagering on behalf of the gaming licensee. The interactive
12sports wagering platform shall pay an initial license fee of
13ten thousand dollars and shall pay an annual renewal fee of
14five thousand dollars. Moneys collected by the commission from
15the license fees paid under this section shall be considered
16repayment receipts as defined in section 8.2.
172. The commission shall grant a gaming licensee, upon
18written request and agreement to conduct sports wagering in
19accordance with the requirements of this chapter, the authority
20to conduct sports wagering as a sports wagering operator under
21this chapter.
22 Sec. 5. NEW SECTION. 99C.5 Sports wagering operators —
23terms and conditions.
241. A sports wagering operator shall use commercially
25reasonable methods to comply with all of the following
26requirements:
27a. Prevent employees of the sports wagering operator and
28relatives living in the same household of such employees from
29sports wagering.
30b. Verify that a person placing a wager on a sporting event
31with a sports wagering operator is twenty-one years of age or
32older.
33c. Ensure that coaches, officials, players, contestants,
34or other individuals who participate in a sporting event
35sanctioned by a sports governing body that is the subject of
-5-1sports wagering are restricted from placing a wager on any
2sporting event sanctioned by that sports governing body.
3d. Restrict, limit, or exclude wagering on a sporting event
4regulated by a sports governing body, to include restricting
5sources of data and associated video upon which a sports
6wagering operator may rely in offering and paying wagers,
7pursuant to procedures established by the commission pursuant
8to section 99C.3.
9e. Allow individuals to restrict themselves from placing
10a wager on a sporting event with a sports wagering operator
11conducted by the sports wagering operator upon request and take
12reasonable steps to prevent those individuals from placing
13a wager on a sporting event with a sports wagering operator
14conducted by the sports wagering operator.
15f. Allow individuals to establish an account with an
16interactive sports wagering platform by utilizing electronic
17communication.
18g. Conduct background checks on newly hired employees, and
19annual background checks on all existing employees utilized
20to conduct sports wagering. Background checks shall search
21for criminal history, and any charges or convictions involving
22corruption or manipulation of sporting events and association
23with organized crime.
24h. Prohibit any individual with access to nonpublic
25confidential information held by the sports wagering operator
26from placing wagers with the sports wagering operator, prohibit
27persons from placing wagers as agents or proxies for others;
28and maintain the security of wagering data, customer data, and
29other confidential information from unauthorized access and
30dissemination; provided, however, that nothing in this chapter
31shall preclude the use of internet or cloud-based hosting of
32such data and information or disclosure as required by court
33order, other law, or this chapter.
34i. Report to the commission and a sports governing body any
35information relating to criminal or disciplinary proceedings
-6-1commenced against the sports wagering operator in connection
2with its operations, abnormal betting activity or patterns
3that may indicate a concern with the integrity of a sporting
4event, any potential breach of the relevant sports governing
5body’s internal rules and codes of conduct pertaining to sports
6wagering, any other conduct that corrupts a betting outcome
7of a sporting event or events for purposes of financial gain
8to include match fixing, and suspicious or illegal wagering
9activities, including use of funds derived from illegal
10activity, wagers to conceal or launder funds derived from
11illegal activity, using agents to place wagers, and using false
12identification.
13j. Maintain the confidentiality of information provided by
14a sports governing body to the sports wagering operator, unless
15disclosure is required by the commission, by law, or court
16order.
17k. Except as provided in section 99C.6, sports wagering
18operators may use any data source to determine the results of
19wagers on a sporting event, provided the data is not obtained
20directly or indirectly from live sporting event attendees who
21collect the data in violation of the terms of admittance to
22a sporting event or through automated computer programs that
23compile data from the internet in violation of the terms of
24service of the relevant website or other internet platform.
25l. Pay the sports wagering royalty fee as provided in
26section 99C.6.
272. A sports wagering operator shall be authorized to
28enter into an agreement with a sports governing body to share
29revenues derived from sports wagering on sporting events
30conducted by a sports governing body.
31 Sec. 6. NEW SECTION. 99C.6 Sports wagering requirements —
32royalty fee.
331. A sports governing body may notify the commission, in
34a form and manner as the commission may require, that the
35sports governing body desires to supply official league data
-7-1to sports wagering operators for determining the results of
2tier two sports wagers. On or after thirty days following such
3notification by a sports governing body to the commission,
4sports wagering operators shall use only official league data
5to determine the results of tier two sports wagers, unless the
6sports wagering operator can demonstrate to the commission that
7the sports governing body or its designee cannot provide a feed
8of official league data to the sports wagering operator on
9commercially reasonable terms.
102. a. Within thirty days of the end of each calendar
11quarter, a sports wagering operator shall remit to the
12commission a royalty fee of one-quarter of one percent of the
13amounts wagered on sporting events conducted by registered
14sports governing bodies.
15b. The royalty fee shall be remitted on a form as the
16commission may require, on which the sports wagering operator
17shall identify the percentage of wagering during the reporting
18period attributable to each registered sports governing body’s
19sporting events.
20c. No later than the thirtieth of April of each year, a
21registered sports governing body may submit a request for
22disbursement of funds remitted by sports wagering operators
23in the previous calendar year. The commission shall disburse
24the funds to the registered sports governing body in pro rata
25proportion of the total amount wagered on its sporting events.
26A registered sports governing body is not required to obtain
27a license from the commission in order to lawfully accept the
28funds provided for in this subsection.
29d. The commission shall annually publish a report stating
30the amount received from sports wagering operators in royalty
31fees and the amount paid to registered sports governing bodies.
32e. Any unclaimed royalty fees shall be distributed to the
33sports wagering operators that timely remitted the royalty fees
34required under this subsection to the commission. Such royalty
35fees shall be distributed to the eligible sports wagering
-8-1operators on a pro rata basis.
2f. The commission shall cooperate with a registered sports
3governing body and sports wagering operators to ensure the
4timely, efficient, and accurate sharing of information and
5the remittance of the royalty fee to the registered sports
6governing body or its designee.
7 Sec. 7. NEW SECTION. 99C.7 Records — confidentiality.
81. Sports wagering operators shall maintain records of
9all bets and wagers placed, including personally identifiable
10information of the bettor, amount and type of bet, time the bet
11was placed, location of the bet, including internet protocol
12address if applicable, the outcome of the bet, records of
13abnormal betting activity, and video camera recordings in
14the case of in-person wagers for at least three years after
15the sporting event occurs and make such data available for
16inspection upon request of the commission or as required by
17court order. In addition, if a sports governing body has
18notified the commission that real-time information sharing
19for wagers placed on its sporting events is necessary and
20desirable, the commission shall require sports wagering
21operators to share in real time the information required to be
22retained pursuant to this subsection, other than video camera
23recordings, with the sports governing body or its designee with
24respect to wagers on its sporting events.
252. Records provided to the commission pursuant to this
26chapter shall be governed by the provisions of chapter
2722, provided that, in addition to records that may be kept
28confidential pursuant to section 22.7, the following records
29provided by a sports wagering operator to the commission shall
30be kept confidential, except as otherwise provided in this
31section, unless otherwise ordered by a court, by the lawful
32custodian of the records, or by another person duly authorized
33to release such information:
34a. Patron and customer records.
35b. Surveillance records.
-9- 1c. Security reports and network audits.
2d. Internal control and compliance records.
3e. Employee records.
4f. Marketing expenses.
5g. Any information specifically requested for inspection by
6the commission or a representative of the commission.
73. Information provided by a sports governing body to a
8sports wagering operator shall be kept confidential unless
9otherwise ordered by a court or disclosure is otherwise
10required by law or the commission.
11 Sec. 8. NEW SECTION. 99C.8 Investigations.
121. If the commission has reasonable cause to believe that
13a sports wagering operator has committed a violation of this
14chapter, the commission may request the division of criminal
15investigation of the department of public safety to investigate
16to determine compliance with the requirements of this chapter.
17The criminal investigation division and the commission shall
18cooperate to the maximum extent possible on an investigation.
19The commission shall assess the sports wagering operator the
20reasonable costs of the investigation. The costs may be
21retained by the division and shall be considered repayment
22receipts as defined in section 8.2.
232. The commission and sports wagering operators shall
24cooperate with investigations conducted by sports governing
25bodies or the division, including but not limited to providing
26or facilitating the provision of account-level betting
27information and audio or video files relating to persons
28placing wagers.
29 Sec. 9. NEW SECTION. 99C.9 Penalties — liability.
301. A person who willfully fails to comply with the
31requirements of this chapter and the rules adopted pursuant
32to chapter 17A under this chapter shall be liable for a
33civil penalty of not more than one thousand dollars for each
34violation, not to exceed ten thousand dollars for violations
35arising out of the same transaction or occurrence, which shall
-10-1accrue to the state and may be recovered in a civil action
2brought by the commission.
32. A person is guilty of a class “C” felony for any of the
4following:
5a. Placing, or causing to be placed, a bet or wager on the
6basis of material nonpublic information relating to that bet
7or wager. For purposes of this paragraph, a bet or wager is
8“on the basis of material nonpublic information relating to
9that bet or wager” if the person placing the bet or wager, or
10causing it to be placed, was aware of the material nonpublic
11information when such person placed the bet or wager or caused
12it to be placed.
13b. Knowingly engaging in, facilitating, or concealing
14conduct that intends to improperly influence a betting
15outcome of a sporting event for purposes of financial gain, in
16connection with betting or wagering on a sporting event.
173. A person who violates subsection 2, paragraph “b”, shall
18be liable to the relevant sports governing body, which sports
19governing body may sue either at law or in equity in any court
20of competent jurisdiction.
21 Sec. 10. Section 99G.3, subsection 7, Code 2019, is amended
22to read as follows:
237. “Lottery”, “lotteries”, “lottery game”, “lottery games”,
24or “lottery products” means any game of chance approved by
25the board and operated pursuant to this chapter and games
26using mechanical or electronic devices, provided that the
27authority shall not authorize a monitor vending machine or
28a player-activated gaming machine that utilizes an internal
29randomizer to determine winning and nonwinning plays and that
30upon random internal selection of a winning play dispenses
31coins, currency, or a ticket, credit, or token to the player
32that is redeemable for cash or a prize, and excluding gambling
33or gaming conducted pursuant to chapter 99B, 99C, 99D, or 99F.
34 Sec. 11. Section 123.49, subsection 2, paragraph a, Code
352019, is amended to read as follows:
-11- 1a. Knowingly permit any gambling, except in accordance
2with chapter 99B, 99C, 99D, 99F, or 99G, or knowingly permit
3solicitation for immoral purposes, or immoral or disorderly
4conduct on the premises covered by the license or permit.
5 Sec. 12. Section 232C.4, subsection 3, Code 2019, is amended
6to read as follows:
73. An emancipated minor shall remain subject to voting
8restrictions under chapter 48A, gambling restrictions under
9chapter 99B, 99C, 99D, 99F, 99G, or 725, alcohol restrictions
10under chapter 123, compulsory attendance requirements under
11chapter 299, and cigarette tobacco restrictions under chapter
12453A.
13 Sec. 13. Section 537A.4, subsection 2, Code 2019, is amended
14to read as follows:
152. This section does not apply to a contract for the
16operation of or for the sale or rental of equipment for games
17of skill or games of chance, if both the contract and the games
18are in compliance with chapter 99B. This section does not
19apply to wagering authorized by chapter 99C. This section does
20not apply to wagering under the pari-mutuel method of wagering
21authorized by chapter 99D. This section does not apply to the
22sale, purchase, or redemption of a ticket or share in the state
23lottery in compliance with chapter 99G. This section does not
24apply to wagering authorized by chapter 99F. This section does
25not apply to the sale, purchase, or redemption of any ticket
26or similar gambling device legally purchased in Indian lands
27within this state.
28 Sec. 14. Section 714B.10, subsection 1, Code 2019, is
29amended to read as follows:
301. Advertising by sponsors registered pursuant to chapter
31557B, licensed pursuant to chapter 99B, or regulated pursuant
32to chapter 99C, 99D, 99F, or 99G.
33 Sec. 15. Section 725.13, Code 2019, is amended to read as
34follows:
35725.13 Definition of bookmaking.
-12- 1“Bookmaking” means advancing gambling activity by accepting
2bets upon the outcome of future contingent events as a business
3other than as permitted in chapters 99B, 99C, 99D, and 99F.
4These events include, but are not limited to, the results of
5a trial or contest of skill, speed, power, or endurance of
6a person or beast or between persons, beasts, fowl, motor
7vehicles, or mechanical apparatus or upon the result of any
8chance, casualty, unknown, or contingent event.
9 Sec. 16. Section 725.15, Code 2019, is amended to read as
10follows:
11725.15 Exceptions for legal gambling.
12Sections 725.5 through 725.10 and 725.12 do not apply to
13a game, activity, ticket, or device when lawfully possessed,
14used, conducted, or participated in pursuant to chapter 99B,
1599C, 99F, or 99G.
16 Sec. 17. TRANSITIONAL LICENSE. Notwithstanding any
17provisions of chapter 99C as enacted by this Act to the
18contrary, a person granted a license or registration by two
19or more states to conduct sports wagering as an interactive
20sports wagering platform may apply for and shall be granted a
21transitional license by the racing and gaming commission as
22an interactive sports wagering platform in this state subject
23to the requirements of chapter 99C, as enacted by this Act.
24The transitional license shall be valid until the earlier of
25the date the racing and gaming commission grants or denies a
26license under section 99C.4 to the person as an interactive
27sports wagering platform, or twelve months from the date the
28racing and gaming commission accepts applications for issuance
29of a license as an interactive sports wagering platform under
30section 99C.4.
31 Sec. 18. EFFECTIVE DATE. This division of this Act, being
32deemed of immediate importance, takes effect upon enactment.
33DIVISION II
34FANTASY SPORTS CONTESTS
35 Sec. 19. NEW SECTION. 99E.1 Definitions.
-13- 1As used in this chapter, unless the context otherwise
2requires:
31. “Applicant” means an internet fantasy sports contest
4service provider applying for a license to conduct internet
5fantasy sports contests under this chapter.
62. “Commission” means the state racing and gaming commission
7created under section 99D.5.
83. “Fantasy sports contest” includes any fantasy or
9simulated game or contest in which the fantasy sports contest
10operator is not a participant in the game or contest, the value
11of all prizes and awards offered to winning participants are
12established and made known to the participants in advance
13of the contest, all winning outcomes reflect the relative
14knowledge and skill of the participants and shall be determined
15by accumulated statistical results of the performance of
16individuals, including athletes in the case of sporting events,
17and no winning outcome is based on the score, point spread, or
18any performance or performances of any single actual team or
19solely on any single performance of an individual athlete or
20player in any single actual event.
214. “Internet fantasy sports contest” means a method of
22entering a fantasy sports contest by which a person may
23establish an account with an internet fantasy sports contest
24service provider, deposit money into the account, and use
25the account balance for entering a fantasy sports contest by
26utilizing electronic communication.
275. “Internet fantasy sports contest adjusted revenues” means,
28for each internet fantasy sports contest, the amount equal to
29the total charges and fees collected from all participants
30entering the internet fantasy sports contest less winnings paid
31to participants in the contest, multiplied by the location
32percentage.
336. “Internet fantasy sports contest player” means a person
34who is at least twenty-one years of age and participates in an
35internet fantasy sports contest operated by an internet fantasy
-14-1sports contest service provider.
27. “Internet fantasy sports contest service provider” means
3a person, including a licensee under chapter 99D or 99F, who
4conducts an internet fantasy sports contest as authorized by
5this chapter.
68. “Location percentage” means, for each internet fantasy
7sports contest, the percentage, rounded to the nearest tenth of
8a percent, equal to the total charges and fees collected from
9all internet fantasy sports contest players located in this
10state divided by the total charges and fees collected from all
11participants in the internet fantasy sports contest.
12 Sec. 20. NEW SECTION. 99E.2 Internet fantasy sports
13contests authorized.
14The system of entering an internet fantasy sports contest as
15provided by this chapter is legal when conducted by a licensed
16internet fantasy sports contest service provider as provided in
17this chapter.
18 Sec. 21. NEW SECTION. 99E.3 Commission — powers.
191. The commission shall have full jurisdiction over and
20shall supervise internet fantasy sports contests and internet
21fantasy sports contest service providers as governed by this
22chapter.
232. The commission shall have the following powers and shall
24adopt rules pursuant to chapter 17A to administer and implement
25this chapter:
26a. To review and investigate applicants and determine the
27eligibility of applicants for a license to conduct internet
28fantasy sports contests, pursuant to rules adopted by the
29commission.
30b. To license and regulate internet fantasy sports contest
31service providers subject to the requirements of this chapter.
32c. To provide for the prevention of practices detrimental to
33the public and to provide for the best interests of internet
34fantasy sports contests.
35d. To investigate alleged violations of this chapter
-15-1or the commission rules, orders, or final decisions and to
2take appropriate disciplinary action against a licensee, or
3institute appropriate legal action for enforcement, or both.
4Information gathered during an investigation is confidential
5during the pendency of the investigation.
6e. To assess fines and revoke or suspend licenses and to
7impose penalties for violations of this chapter.
8f. To take any other action as may be reasonable or
9appropriate to enforce this chapter and the commission rules.
10 Sec. 22. NEW SECTION. 99E.4 Requirements of applicant —
11fee.
121. An applicant for a license to conduct internet fantasy
13sports contests shall complete and sign an application on
14the form prescribed and published by the commission. The
15application shall include such information of the applicant
16that the commission deems necessary for purposes of issuing a
17license pursuant to this chapter.
182. An applicant shall submit fingerprints and information
19that the commission deems necessary to the commission in the
20manner prescribed on the application forms. The fingerprints
21may be submitted to the federal bureau of investigation by
22the department of public safety through the state criminal
23history repository for the purpose of a national criminal
24history check. The results of a criminal history record check
25conducted pursuant to this subsection shall be considered a
26confidential record under chapter 22.
273. If the commission is not satisfied that it can determine
28if an applicant meets the requirements necessary for issuing
29a license pursuant to this chapter, the commission may
30request the department of public safety, division of criminal
31investigation, to investigate and obtain the information
32necessary for the commission to make a determination on whether
33to issue the applicant a license.
344. The commission shall charge the applicant a reasonable
35fee set by the department of public safety, division of
-16-1criminal investigation, to defray those costs associated
2with the fingerprint and national criminal history check
3requirements of subsection 2 concerning the applicant. In
4addition, if the commission requests that an additional
5investigation be conducted by the division of criminal
6investigation as provided in subsection 3, the commission shall
7charge the applicant the reasonable costs of this additional
8investigation. These fees and costs are in addition to any
9other license fees and costs charged by the commission. The
10fees and costs may be retained by the department of public
11safety, division of criminal investigation, and shall be
12considered repayment receipts as defined in section 8.2.
135. The commission shall not grant a license to an applicant
14if there is substantial evidence that any of the following
15apply:
16a. A license issued to the applicant to conduct internet
17fantasy sports contests in another jurisdiction has been
18revoked by an entity licensing persons to conduct such contests
19in that jurisdiction.
20b. The applicant has not demonstrated financial
21responsibility sufficient to adequately meet the requirements
22of the enterprise proposed.
23c. The applicant does not adequately disclose the true
24owners of the enterprise proposed.
25d. The applicant has knowingly made a false statement of a
26material fact to the commission.
27e. The applicant has failed to meet a monetary obligation in
28connection with conducting an internet fantasy sports contest.
29f. The applicant is not of good repute and moral character
30or the applicant has pled guilty to, or has been convicted of,
31a felony.
32g. Any member of the board of directors of the applicant is
33not twenty-one years of age or older.
346. A person who knowingly makes a false statement on the
35application is guilty of an aggravated misdemeanor.
-17- 17. For the purposes of this section, “applicant” includes
2each member of the board of directors of an internet fantasy
3sports contest service provider.
4 Sec. 23. NEW SECTION. 99E.5 Licenses — fees — terms and
5conditions — revocation.
61. If the commission is satisfied that the requirements
7of this chapter and its rules adopted under this chapter
8applicable to licensees have been or will be complied with, the
9commission shall issue a license for a period of not more than
10three years to an applicant to conduct internet fantasy sports
11contests in this state.
122. A licensed internet fantasy sports contest service
13provider shall use commercially reasonable methods to comply
14with all of the following requirements:
15a. Prevent employees of the internet fantasy sports contest
16service provider and relatives living in the same household of
17such employees from competing in any internet fantasy sports
18contest on the service provider’s digital platform in which the
19service provider offers a cash prize to the public.
20b. Verify that an internet fantasy sports contest player
21located in this state is twenty-one years of age or older.
22c. Ensure that coaches, officials, players, contestants,
23or other individuals who participate in a game or contest
24that is the subject of an internet fantasy sports contest are
25restricted from entering an internet fantasy sports contest in
26which the outcome is determined, in whole or in part, by the
27accumulated statistical results of a team of individuals in the
28game or contest in which they participate.
29d. Allow individuals to restrict themselves from entering
30an internet fantasy sports contest conducted by the internet
31fantasy sports contest service provider upon request and take
32reasonable steps to prevent those individuals from entering
33any internet fantasy sports contests conducted by the internet
34fantasy sports contest service provider.
35e. Allow individuals to establish an account with an
-18-1internet fantasy sports contest service provider by utilizing
2electronic communication.
3f. Disclose the number of entries a single internet fantasy
4sports contest player may submit to each internet fantasy
5sports contest and take reasonable steps to prevent players
6from submitting more than the allowable number of entries for
7that internet fantasy sports contest.
8g. Segregate internet fantasy sports contest player funds
9from operational funds or maintain a reserve in the form of
10cash, cash equivalents, an irrevocable letter of credit,
11payment processor reserves and receivables, a bond, or a
12combination thereof in the amount of the deposits in internet
13fantasy sports contest player accounts for the benefit and
14protection of internet fantasy sports contest player funds held
15in internet fantasy sports contest accounts by the internet
16fantasy sports contest service provider.
17h. Annually contract with a third party to perform an
18independent examination, consistent with the attestation
19standards established by the American institute of certified
20public accountants, to ensure compliance with all of the
21requirements in this chapter and submit the results of the
22independent audit to the commission. The audit shall be
23submitted to the commission by July 1 of the year following the
24year subject to the audit.
25i. Pay the tax as provided in section 99E.6.
263. The annual license fee to conduct internet fantasy sports
27contests shall be five hundred dollars. Moneys collected by
28the commission from the annual license fee paid under this
29subsection shall be considered repayment receipts as defined
30in section 8.2.
314. a. A licensed internet fantasy sports contest service
32provider shall pay a regulatory fee to the commission. The
33regulatory fee shall be established by the commission based on
34the costs of administering and enforcing this chapter.
35b. A licensed internet fantasy sports contest service
-19-1provider shall receive a credit for the amount of the
2regulatory fee paid by the provider against the taxes to be
3paid pursuant to section 99E.6.
4c. Moneys collected by the commission from the regulatory
5fees paid under this subsection shall be considered repayment
6receipts as defined in section 8.2.
75. Upon a violation of any of the conditions listed in
8section 99E.4 or this section by a licensee, the commission
9shall immediately revoke the license.
10 Sec. 24. NEW SECTION. 99E.6 Internet fantasy sports contest
11tax — rate — allocations.
121. A tax of seven and one-half percent is imposed on
13internet fantasy sports contest adjusted revenues. The tax
14imposed by this section shall be paid by the internet fantasy
15sports contest service provider to the commission as provided
16by the commission.
172. Of the revenues collected pursuant to this section, an
18amount equal to one-half of one percent of internet fantasy
19sports contest adjusted revenues is transferred to a special
20revenue account in the general fund of the state to be used,
21subject to an appropriation by the general assembly, by the
22department of public health for purposes of the gambling
23treatment program established pursuant to section 135.150. The
24remaining amount of the revenues collected pursuant to this
25section shall be deposited in the rebuild Iowa infrastructure
26fund created in section 8.57.
27 Sec. 25. NEW SECTION. 99E.7 Internet fantasy sports
28contests — age restrictions.
29A person under the age of twenty-one years shall not enter an
30internet fantasy sports contest. A person who violates this
31section with respect to entering an internet fantasy sports
32contest commits a scheduled violation under section 805.8C,
33subsection 12.
34 Sec. 26. NEW SECTION. 99E.8 Division of criminal
35investigation.
-20- 1If the commission has reasonable cause to believe that
2a licensee has committed a violation of this chapter, the
3commission may request the division of criminal investigation
4of the department of public safety to investigate to determine
5licensee compliance with the requirements of this chapter.
6The criminal investigation division and the commission shall
7cooperate to the maximum extent possible on an investigation.
8The commission shall assess the licensee the reasonable costs
9of the investigation conducted by the division of criminal
10investigation pursuant to a request by the commission under
11this section. The costs may be retained by the department of
12public safety, division of criminal investigation, and shall be
13considered repayment receipts as defined in section 8.2.
14 Sec. 27. NEW SECTION. 99E.9 Civil penalty.
15A person who willfully fails to comply with the requirements
16of this chapter and the rules adopted pursuant to chapter 17A
17under this chapter shall be liable for a civil penalty of
18not more than one thousand dollars for each violation, not
19to exceed ten thousand dollars for violations arising out of
20the same transaction or occurrence, which shall accrue to the
21state and may be recovered in a civil action brought by the
22commission.
23 Sec. 28. Section 232C.4, subsection 3, Code 2019, is amended
24to read as follows:
253. An emancipated minor shall remain subject to voting
26restrictions under chapter 48A, gambling restrictions under
27chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
28contest restrictions under chapter 99E, alcohol restrictions
29under chapter 123, compulsory attendance requirements under
30chapter 299, and cigarette tobacco restrictions under chapter
31453A.
32 Sec. 29. Section 714B.10, subsection 1, Code 2019, is
33amended to read as follows:
341. Advertising by sponsors registered pursuant to chapter
35557B, licensed pursuant to chapter 99B, or regulated pursuant
-21-1to chapter 99D, 99E, 99F, or 99G.
2 Sec. 30. Section 725.15, Code 2019, is amended to read as
3follows:
4725.15 Exceptions for legal gambling.
5Sections 725.5 through 725.10 and 725.12 do not apply to
6a game, activity, ticket, or device when lawfully possessed,
7used, conducted, or participated in pursuant to chapter 99B,
899E, 99F, or 99G.
9 Sec. 31. Section 805.8C, Code 2019, is amended by adding the
10following new subsection:
11 NEW SUBSECTION. 12. Internet fantasy sports contest
12violations. For violations of legal age for entering an
13internet fantasy sports contest under section 99E.7, the
14scheduled fine is five hundred dollars. Failure to pay the
15fine by a person under the age of eighteen shall not result in
16the person being detained in a secure facility.
17 Sec. 32. TRANSITIONAL LICENSE. Notwithstanding any
18provisions of chapter 99E as enacted by this Act to the
19contrary, a person granted a license or registration by two or
20more states to conduct internet fantasy sports contests may
21apply for and shall be granted a transitional license by the
22racing and gaming commission to conduct internet fantasy sports
23contests in this state subject to the requirements of chapter
2499E, as enacted by this Act. The transitional license shall
25be valid until the earlier of the date the racing and gaming
26commission grants or denies a license under section 99E.5 to
27the person to conduct internet fantasy sports contests, or
28twelve months from the date the racing and gaming commission
29accepts applications for issuance of a license to conduct
30internet fantasy sports contests under section 99E.5.
31 Sec. 33. EFFECTIVE DATE. This division of this Act, being
32deemed of immediate importance, takes effect upon enactment.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-22- 1This bill authorizes wagering on sporting events and fantasy
2sports contests.
3SPORTS WAGERING. Division I of the bill authorizes wagering
4on sporting events and certain sporting contests and provides
5for the licensing and regulation of sports wagering.
6New Code section 99C.1 provides for definitions. “Sporting
7event” is defined to include portions of a sporting event and
8individual performance statistics of athletes in a sporting
9event or combination of sporting events. “Interactive sports
10wagering platform” is defined to mean a person licensed to
11conduct sports wagering via any electronic means to include
12an internet site. “Official league data” is defined to mean
13any data related to a sporting event obtained and authorized
14for use through the relevant sports governing body of that
15sporting event. “Sports governing body” is defined to mean
16the organization that prescribes final rules and codes of
17conduct with respect to a sporting event and “registered sports
18governing body” is defined to mean a sports governing body that
19is headquartered in the United States and has registered with
20the racing and gaming commission. “Sports wagering operator”
21is defined to mean an interactive sports wagering platform that
22has entered into an agreement with a gaming licensee to conduct
23sports wagering and a gaming licensee that conducts sports
24wagering pursuant to the requirements of the new Code chapter.
25“Gaming licensee” is defined as a person licensed to conduct
26gambling games under Code chapter 99F. “Sports wagering” is
27defined to exclude entering a fantasy sports contest as defined
28in new Code section 99E.1. “Tier one sports wager” means a
29sports wager that is solely determined by the final score or
30outcome of a sporting event that is placed before the sporting
31event begins and “tier two sports wager” means a sports wager
32that is not a tier one sports wager.
33New Code section 99C.2 provides that the system of sports
34wagering is legal when conducted by a sports wagering operator
35as provided in the new Code chapter.
-23- 1New Code section 99C.3 establishes the powers of the
2racing and gaming commission to license and regulate sports
3wagering. The Code section authorizes the commission to
4investigate applicants for a license as an interactive
5sports wagering platform, assess fines and revoke or suspend
6licenses, impose penalties for violations of the new Code
7chapter, regulate advertisements for sports wagering and sports
8wagering operators, and to take any other action to enforce
9the requirements of the new Code chapter. The Code section
10also authorizes the commission to establish procedures for
11sports governing bodies to register with the commission and
12to restrict, limit, or exclude wagers on certain sporting
13events and to restrict sources of data that may be utilized for
14purposes of sports wagering.
15New Code section 99C.4 establishes requirements for an
16applicant receiving a license as an interactive sports wagering
17platform and for authorizing a gaming licensee to conduct
18sports wagering. The Code section sets the initial fee for a
19license as an interactive sports wagering platform at $10,000
20with an annual renewal fee of $5,000.
21New Code section 99C.5 establishes terms and conditions for
22sports wagering operators. The Code section provides that a
23sports wagering operator shall use commercially reasonable
24methods to prevent any employees and certain family members
25from participating in sports wagering, verify that a person
26placing a wager on a sporting event is age 21 or older, ensure
27that participants in a sporting event sanctioned by a sports
28governing body shall not be allowed to place a wager on any
29sporting event sanctioned by that sports governing body,
30permit individuals to establish an account with an interactive
31sports wagering platform by utilizing electronic communication
32and to restrict themselves from wagering on a sporting event
33with a sports wagering operator, conduct background checks on
34employees involved in sports wagering, prevent individuals
35with nonpublic confidential information from placing wagers,
-24-1report criminal and disciplinary proceedings and abnormal
2betting activity to the racing and gaming commission and the
3relevant sports governing body, maintain the confidentiality
4of information provided by a sports governing body to the
5sports wagering operator, and pay the royalty fee imposed by
6the new Code chapter. In addition, the Code section authorizes
7a sports wagering operator to share revenue with a sports
8governing body.
9New Code section 99C.6 establishes sports wagering
10requirements and a royalty fee. The Code section provides that
1130 days after notification by a sports governing body, a sports
12wagering operator shall use only official league data for tier
13two sports wagers unless the sports governing body is unable to
14provide the data on commercially reasonable terms. The Code
15section also requires sports wagering operators to remit to the
16racing and gaming commission a royalty fee of one-quarter of
17one percent of amounts wagered on sporting events conducted by
18registered sports governing bodies. The Code section provides
19the mechanism for distributing royalty fee funds remitted to
20the commission to registered sports governing bodies.
21New Code section 99C.7 concerns records and confidentiality.
22The Code section requires sports wagering operators to maintain
23records of all bets and wagers and to provide information on
24bets and wagers on sporting events sanctioned by a sports
25governing body to the sports governing body upon notice to
26the racing and gaming commission. The Code section provides
27that certain records provided by a sports wagering operator to
28the racing and gaming commission shall be kept confidential
29by the commission, except as otherwise provided by the Code
30section, unless otherwise ordered by a court, by the lawful
31custodian of the records, or by another person duly authorized
32to release such information. The bill lists the records to be
33kept confidential as promotional play receipts records, patron
34and customer records, surveillance records, security reports
35and network audits, internal control records, employee records,
-25-1marketing expenses, and any information specifically requested
2for inspection by the commission.
3New Code section 99C.8 authorizes the division of criminal
4investigation of the department of public safety to investigate
5compliance by sports wagering operators with the requirements
6of the new Code chapter.
7New Code section 99C.9 establishes civil and criminal
8penalties for certain violations. The Code section provides
9that a person who willfully fails to comply with the
10requirements of this new Code chapter shall be liable for a
11civil penalty of not more than $1,000 for each violation,
12not to exceed $10,000 for violations arising out of the same
13transaction or occurrence. The bill also establishes that a
14person is guilty of a class “C” felony for placing a bet or
15wager on the basis of material nonpublic information relating
16to the bet or wager or knowingly engaging in or concealing
17conduct intended to improperly influence a betting outcome.
18A class “C” felony is punishable by confinement for no more
19than 10 years and a fine of at least $1,000 but not more than
20$10,000.
21The bill also makes changes to Code sections 99G.3, 123.49,
22232C.4, 537A.4, 714B.10, 725.13, and 725.15 to provide that
23provisions in those Code sections that list some or all Code
24chapters that govern lawful gambling also lists the new Code
25chapter provided in the bill.
26The bill provides for the issuance of a transitional license
27by the racing and gaming commission to a person to conduct
28sports wagering as an interactive sports wagering platform
29in this state if the person has been granted a license or
30registration by two or more other states to conduct sports
31wagering. The bill provides that the transitional license
32shall be valid until the earlier of the date the commission
33grants or denies a license to the person or 12 months from
34the date the commission accepts applications for issuance of
35a license.
-26- 1The bill provides that this division takes effect upon
2enactment.
3FANTASY SPORTS CONTESTS. Division II of the bill authorizes
4internet fantasy sports contests and provides for the
5licensing, regulation, and taxation of internet fantasy sports
6contests.
7New Code section 99E.1 provides for definitions. A “fantasy
8sports contest” is defined as any fantasy or simulated game
9or contest in which all prizes and awards offered to winning
10participants are established and made known in advance of the
11contest, all winning outcomes reflect the relative knowledge
12and skill of the participants and are determined predominantly
13by accumulated statistical results of the performance of
14individuals, and no winning outcome is based on the score, or
15performance of any single actual team or combination of such
16teams or solely on any single performance of an individual
17athlete in any single actual sporting or other event. An
18“internet fantasy sports contest” is defined as a method of
19entering a fantasy sports contest by establishing an account
20with an internet fantasy sports contest service provider. An
21“internet fantasy sports contest player” is defined as a person
22who is at least 21 years of age who participates in an internet
23fantasy sports contest. The bill also defines “internet
24fantasy sports contest adjusted revenues”, “internet fantasy
25sports contest service provider”, and “location percentage”.
26New Code section 99E.2 provides that the system of entering
27an internet fantasy sports contest is legal when conducted by a
28licensed internet fantasy sports contest service provider as
29provided in the new Code chapter.
30New Code section 99E.3 establishes the powers of the racing
31and gaming commission in relation to internet fantasy sports
32contests and internet fantasy sports contest service providers.
33Specifically, the Code section authorizes the commission
34to investigate and license internet fantasy sports contest
35service providers, assess fines and revoke or suspend licenses,
-27-1impose penalties for violations of the Code chapter, and take
2any other action to enforce the requirements of the new Code
3chapter.
4New Code section 99E.4 establishes the requirements for an
5applicant to be granted a license to conduct internet fantasy
6sports contests. The Code section allows the commission
7to charge the applicant a fee for the department of public
8safety, division of criminal investigation, to defray the
9costs associated with any investigation. The new Code
10section provides that a license shall not be issued if there
11is evidence that the applicant has failed to meet certain
12qualifying requirements. The Code section provides that a
13person who knowingly makes a false statement on the application
14is guilty of an aggravated misdemeanor.
15New Code section 99E.5 establishes the terms and conditions
16of licenses issued to conduct internet fantasy sports contests.
17The Code section provides that a license may be issued for a
18period of not more than three years and provides that the
19annual license fee shall be $500. The Code section also
20provides for the payment of a regulatory fee to be set
21by the racing and gaming commission based on the costs of
22administering and enforcing the new Code chapter. The Code
23section further provides that each licensee shall receive
24a credit for the amount of the regulatory fee paid against
25taxes to be paid pursuant to the new Code chapter. The Code
26section provides that a licensed internet fantasy sports
27contest service provider shall use commercially reasonable
28methods to prevent any employees and certain family members
29from participating in internet fantasy sports contests on the
30service provider’s digital platform, verify that internet
31fantasy sports contest players located in this state are 21
32or older, ensure that participants in a game or contest shall
33not be allowed to enter an internet fantasy sports contest
34involving that game or contest, permit individuals to establish
35an account with an internet fantasy sports contest service
-28-1provider by electronic communication and to restrict themselves
2from entering an internet fantasy sports contest, perform an
3independent audit, and pay the tax imposed by the new Code
4chapter.
5New Code section 99E.6 provides for a tax of 7.5 percent
6to be imposed on internet fantasy sports contest adjusted
7revenues. The bill defines, in new Code section 99E.1,
8“internet fantasy sports contest adjusted revenues” as the
9total of fees and charges collected, less winnings, in an
10internet fantasy sports contest multiplied by the percentage
11of fees and charges paid by participants who are located in
12this state in that contest. The bill provides that of the
13revenues collected, an amount equal to .5 percent of internet
14fantasy sports contest adjusted revenues is transferred to a
15special revenue account in the general fund to be used, subject
16to an appropriation, by the department of public health for
17gambling treatment with the remainder of revenues collected to
18be deposited in the rebuild Iowa infrastructure fund.
19New Code section 99E.7 provides that a person under the
20age of 21 shall not enter an internet fantasy sports contest.
21A person who violates this Code section commits a scheduled
22violation under Code section 805.8C and is subject to a $500
23fine. Code section 805.8C is amended to reflect this violation
24and applicable fine.
25New Code section 99E.8 authorizes the division of criminal
26investigation of the department of public safety to investigate
27licensee compliance with the requirements of the new Code
28chapter.
29New Code section 99E.9 establishes civil penalties. The
30new Code section provides that a person who willfully fails to
31comply with the requirements of this new Code chapter shall be
32liable for a civil penalty of not more than $1,000 for each
33violation, not to exceed $10,000 for violations arising out of
34the same transaction or occurrence.
35The bill also makes changes to Code sections 232C.4,
-29-1714B.10, and 725.15 to provide that provisions in those Code
2sections that list some or all Code chapters that govern lawful
3gambling also lists the new Code chapter provided in this
4division of the bill.
5This division of the bill takes effect upon enactment.
-30-ec/rn
2contests and sports wagering, providing for taxes and fees,
3making penalties applicable, and including effective date
4provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SPORTS WAGERING
3 Section 1. NEW SECTION. 99C.1 Definitions.
4As used in this chapter, unless the context otherwise
5requires:
61. “Applicant” means a person applying for a license as an
7interactive sports wagering platform.
82. “Commission” means the state racing and gaming commission
9created under section 99D.5.
103. “Division” means the division of criminal investigation
11of the department of public safety as provided in section
1280.17.
134. “Gaming licensee” means any person licensed under section
1499F.4A or 99F.7 to conduct gambling games under chapter 99F.
155. “Interactive sports wagering platform” means a person
16licensed by the commission to conduct sports wagering pursuant
17to this chapter via a telephone-type device or any other
18electronic means to include an interactive internet site.
196. “Official league data” means statistics, results,
20outcomes, and other data relating to a sporting event obtained
21pursuant to an agreement with the relevant sports governing
22body, or an entity expressly authorized by the sports governing
23body to provide such information to sports wagering operators,
24which authorizes the use of such data for determining the
25outcome of tier two sports wagers.
267. “Registered sports governing body” means a sports
27governing body that is headquartered in the United States and
28has registered with the commission pursuant to this chapter.
298. “Sporting event” includes portions of a sporting event or
30sporting events, and any individual performance statistics of
31athletes in a sporting event or combination of sporting events.
329. “Sports governing body” means the organization that
33prescribes final rules and enforces codes of conduct with
34respect to a sporting event and participants therein.
3510. “Sports wagering” means accepting wagers on a sporting
-1-1event, by any system or method of wagering, including but not
2limited to in-person, over the internet through websites,
3and on mobile devices. “Sports wagering” includes but is not
4limited to single-game bets, teaser bets, parlays, over-under,
5moneyline, pools, exchange wagering, in-game wagering, in-play
6bets, proposition bets, and straight bets. “Sports wagering”
7does not include entering a fantasy sports contest as defined
8in section 99E.1.
911. “Sports wagering operator” means an interactive sports
10wagering platform who has entered into an agreement with a
11gaming licensee to conduct sports wagering on behalf of the
12gaming licensee or a gaming licensee that conducts sports
13wagering as provided by this chapter.
1412. “Tier one sports wager” means a sports wager that is
15determined solely by the final score or final outcome of the
16sporting event and is placed before the sporting event has
17begun.
1813. “Tier two sports wager” means a sports wager that is not
19a tier one sports wager.
2014. “Wager” or “bet” means the staking or risking by a
21person of something of value upon an agreement or understanding
22that the person or another person will receive something of
23value in the event of a certain outcome. “Wager” or “bet” does
24not include any activity governed by the securities laws of
25the United States or this state, any contract of indemnity or
26guarantee, any contract for insurance, or participation in
27any game or contest in which the participants do not stake
28or risk anything of value other than personal efforts of the
29participants in playing the game or contest or obtaining access
30to the internet, or points or credits that the sponsor of the
31game or contest provides to participants free of charge and
32that can be used or redeemed only for participation in games or
33contests offered by the sponsor.
34 Sec. 2. NEW SECTION. 99C.2 Sports wagering authorized.
35The system of sports wagering as provided by this chapter is
-2-1legal, when conducted by a sports wagering operator as provided
2in this chapter.
3 Sec. 3. NEW SECTION. 99C.3 Commission — powers.
41. The commission shall have full jurisdiction over and
5shall supervise sports wagering and sports wagering operators
6as governed by this chapter.
72. The commission shall have the following powers and shall
8adopt rules pursuant to chapter 17A to administer and implement
9this chapter:
10a. To review and investigate applicants and determine the
11eligibility of applicants for a license as an interactive
12sports wagering platform, pursuant to rules adopted by the
13commission.
14b. To license interactive sports wagering platforms and to
15regulate sports wagering operators subject to the requirements
16of this chapter.
17c. To provide for the prevention of practices detrimental
18to the public and to provide for the best interests of sports
19wagering.
20d. To investigate alleged violations of this chapter
21or the commission rules, orders, or final decisions and
22to take appropriate disciplinary action against a sports
23wagering operator, or institute appropriate legal action
24for enforcement, or both. Information gathered during an
25investigation is confidential during the pendency of the
26investigation.
27e. To assess fines and revoke or suspend licenses and to
28impose penalties for violations of this chapter.
29f. To establish procedures for allowing a sports governing
30body, upon notification of the commission, to restrict,
31limit, or exclude wagers on sporting events, or portions of
32sporting events, regulated by the sports governing body from
33sports wagering as provided by this chapter and to, without
34limitation, restrict the sources of data and associated video
35upon which a sports wagering operator may rely in offering
-3-1and paying wagers and the bet types that may be offered on a
2sporting event regulated by the sports governing body. The
3procedures will provide that the commission shall only deny
4a request made by a sports governing body pursuant to this
5paragraph if the commission deems such request arbitrary
6and capricious and shall provide a sports governing body
7with an opportunity for a hearing under chapter 17A if a
8request is denied. The procedures shall also provide that the
9administrator of the commission may temporarily grant a request
10by a sports governing body pending a final decision on whether
11to grant the request.
12g. To provide for a sports governing body to register with
13the commission if the sports governing body is headquartered
14in the United States upon completion of such registration form
15as the commission may require.
16h. To provide that advertisements for sports wagering by
17a sports wagering operator does not target minors or other
18persons who are ineligible to place wagers, problem gamblers,
19or other vulnerable persons, which may include limitations
20on the form, content, quantity, timing, and location of
21advertisements; discloses the identity of the sports wagering
22operator; provides information about or links to resources
23relating to gambling addiction; and are not false, misleading,
24or deceptive to a reasonable consumer.
25i. To take any other action as may be reasonable or
26appropriate to enforce this chapter and the commission rules.
27 Sec. 4. NEW SECTION. 99C.4 Authority to conduct sports
28wagering — licenses — fees.
291. a. An applicant for a license as an interactive sports
30wagering platform shall complete and sign an application on
31the form prescribed and published by the commission. The
32application shall include such information regarding the
33applicant that the commission deems necessary for purposes of
34issuing a license pursuant to this chapter.
35b. If the commission is satisfied that the requirements
-4-1of this chapter and its rules adopted under this chapter
2applicable to licensees have been or will be complied with,
3the commission may issue a license to an applicant as an
4interactive sports wagering platform to conduct sports wagering
5in this state. A licensed interactive sports wagering platform
6may enter into agreements to offer sports wagering on behalf of
7one or more gaming licensees without limitation. However, a
8gaming licensee authorized to conduct sports wagering pursuant
9to this section may enter into agreements with no more than two
10licensed interactive sports wagering platforms to offer sports
11wagering on behalf of the gaming licensee. The interactive
12sports wagering platform shall pay an initial license fee of
13ten thousand dollars and shall pay an annual renewal fee of
14five thousand dollars. Moneys collected by the commission from
15the license fees paid under this section shall be considered
16repayment receipts as defined in section 8.2.
172. The commission shall grant a gaming licensee, upon
18written request and agreement to conduct sports wagering in
19accordance with the requirements of this chapter, the authority
20to conduct sports wagering as a sports wagering operator under
21this chapter.
22 Sec. 5. NEW SECTION. 99C.5 Sports wagering operators —
23terms and conditions.
241. A sports wagering operator shall use commercially
25reasonable methods to comply with all of the following
26requirements:
27a. Prevent employees of the sports wagering operator and
28relatives living in the same household of such employees from
29sports wagering.
30b. Verify that a person placing a wager on a sporting event
31with a sports wagering operator is twenty-one years of age or
32older.
33c. Ensure that coaches, officials, players, contestants,
34or other individuals who participate in a sporting event
35sanctioned by a sports governing body that is the subject of
-5-1sports wagering are restricted from placing a wager on any
2sporting event sanctioned by that sports governing body.
3d. Restrict, limit, or exclude wagering on a sporting event
4regulated by a sports governing body, to include restricting
5sources of data and associated video upon which a sports
6wagering operator may rely in offering and paying wagers,
7pursuant to procedures established by the commission pursuant
8to section 99C.3.
9e. Allow individuals to restrict themselves from placing
10a wager on a sporting event with a sports wagering operator
11conducted by the sports wagering operator upon request and take
12reasonable steps to prevent those individuals from placing
13a wager on a sporting event with a sports wagering operator
14conducted by the sports wagering operator.
15f. Allow individuals to establish an account with an
16interactive sports wagering platform by utilizing electronic
17communication.
18g. Conduct background checks on newly hired employees, and
19annual background checks on all existing employees utilized
20to conduct sports wagering. Background checks shall search
21for criminal history, and any charges or convictions involving
22corruption or manipulation of sporting events and association
23with organized crime.
24h. Prohibit any individual with access to nonpublic
25confidential information held by the sports wagering operator
26from placing wagers with the sports wagering operator, prohibit
27persons from placing wagers as agents or proxies for others;
28and maintain the security of wagering data, customer data, and
29other confidential information from unauthorized access and
30dissemination; provided, however, that nothing in this chapter
31shall preclude the use of internet or cloud-based hosting of
32such data and information or disclosure as required by court
33order, other law, or this chapter.
34i. Report to the commission and a sports governing body any
35information relating to criminal or disciplinary proceedings
-6-1commenced against the sports wagering operator in connection
2with its operations, abnormal betting activity or patterns
3that may indicate a concern with the integrity of a sporting
4event, any potential breach of the relevant sports governing
5body’s internal rules and codes of conduct pertaining to sports
6wagering, any other conduct that corrupts a betting outcome
7of a sporting event or events for purposes of financial gain
8to include match fixing, and suspicious or illegal wagering
9activities, including use of funds derived from illegal
10activity, wagers to conceal or launder funds derived from
11illegal activity, using agents to place wagers, and using false
12identification.
13j. Maintain the confidentiality of information provided by
14a sports governing body to the sports wagering operator, unless
15disclosure is required by the commission, by law, or court
16order.
17k. Except as provided in section 99C.6, sports wagering
18operators may use any data source to determine the results of
19wagers on a sporting event, provided the data is not obtained
20directly or indirectly from live sporting event attendees who
21collect the data in violation of the terms of admittance to
22a sporting event or through automated computer programs that
23compile data from the internet in violation of the terms of
24service of the relevant website or other internet platform.
25l. Pay the sports wagering royalty fee as provided in
26section 99C.6.
272. A sports wagering operator shall be authorized to
28enter into an agreement with a sports governing body to share
29revenues derived from sports wagering on sporting events
30conducted by a sports governing body.
31 Sec. 6. NEW SECTION. 99C.6 Sports wagering requirements —
32royalty fee.
331. A sports governing body may notify the commission, in
34a form and manner as the commission may require, that the
35sports governing body desires to supply official league data
-7-1to sports wagering operators for determining the results of
2tier two sports wagers. On or after thirty days following such
3notification by a sports governing body to the commission,
4sports wagering operators shall use only official league data
5to determine the results of tier two sports wagers, unless the
6sports wagering operator can demonstrate to the commission that
7the sports governing body or its designee cannot provide a feed
8of official league data to the sports wagering operator on
9commercially reasonable terms.
102. a. Within thirty days of the end of each calendar
11quarter, a sports wagering operator shall remit to the
12commission a royalty fee of one-quarter of one percent of the
13amounts wagered on sporting events conducted by registered
14sports governing bodies.
15b. The royalty fee shall be remitted on a form as the
16commission may require, on which the sports wagering operator
17shall identify the percentage of wagering during the reporting
18period attributable to each registered sports governing body’s
19sporting events.
20c. No later than the thirtieth of April of each year, a
21registered sports governing body may submit a request for
22disbursement of funds remitted by sports wagering operators
23in the previous calendar year. The commission shall disburse
24the funds to the registered sports governing body in pro rata
25proportion of the total amount wagered on its sporting events.
26A registered sports governing body is not required to obtain
27a license from the commission in order to lawfully accept the
28funds provided for in this subsection.
29d. The commission shall annually publish a report stating
30the amount received from sports wagering operators in royalty
31fees and the amount paid to registered sports governing bodies.
32e. Any unclaimed royalty fees shall be distributed to the
33sports wagering operators that timely remitted the royalty fees
34required under this subsection to the commission. Such royalty
35fees shall be distributed to the eligible sports wagering
-8-1operators on a pro rata basis.
2f. The commission shall cooperate with a registered sports
3governing body and sports wagering operators to ensure the
4timely, efficient, and accurate sharing of information and
5the remittance of the royalty fee to the registered sports
6governing body or its designee.
7 Sec. 7. NEW SECTION. 99C.7 Records — confidentiality.
81. Sports wagering operators shall maintain records of
9all bets and wagers placed, including personally identifiable
10information of the bettor, amount and type of bet, time the bet
11was placed, location of the bet, including internet protocol
12address if applicable, the outcome of the bet, records of
13abnormal betting activity, and video camera recordings in
14the case of in-person wagers for at least three years after
15the sporting event occurs and make such data available for
16inspection upon request of the commission or as required by
17court order. In addition, if a sports governing body has
18notified the commission that real-time information sharing
19for wagers placed on its sporting events is necessary and
20desirable, the commission shall require sports wagering
21operators to share in real time the information required to be
22retained pursuant to this subsection, other than video camera
23recordings, with the sports governing body or its designee with
24respect to wagers on its sporting events.
252. Records provided to the commission pursuant to this
26chapter shall be governed by the provisions of chapter
2722, provided that, in addition to records that may be kept
28confidential pursuant to section 22.7, the following records
29provided by a sports wagering operator to the commission shall
30be kept confidential, except as otherwise provided in this
31section, unless otherwise ordered by a court, by the lawful
32custodian of the records, or by another person duly authorized
33to release such information:
34a. Patron and customer records.
35b. Surveillance records.
-9- 1c. Security reports and network audits.
2d. Internal control and compliance records.
3e. Employee records.
4f. Marketing expenses.
5g. Any information specifically requested for inspection by
6the commission or a representative of the commission.
73. Information provided by a sports governing body to a
8sports wagering operator shall be kept confidential unless
9otherwise ordered by a court or disclosure is otherwise
10required by law or the commission.
11 Sec. 8. NEW SECTION. 99C.8 Investigations.
121. If the commission has reasonable cause to believe that
13a sports wagering operator has committed a violation of this
14chapter, the commission may request the division of criminal
15investigation of the department of public safety to investigate
16to determine compliance with the requirements of this chapter.
17The criminal investigation division and the commission shall
18cooperate to the maximum extent possible on an investigation.
19The commission shall assess the sports wagering operator the
20reasonable costs of the investigation. The costs may be
21retained by the division and shall be considered repayment
22receipts as defined in section 8.2.
232. The commission and sports wagering operators shall
24cooperate with investigations conducted by sports governing
25bodies or the division, including but not limited to providing
26or facilitating the provision of account-level betting
27information and audio or video files relating to persons
28placing wagers.
29 Sec. 9. NEW SECTION. 99C.9 Penalties — liability.
301. A person who willfully fails to comply with the
31requirements of this chapter and the rules adopted pursuant
32to chapter 17A under this chapter shall be liable for a
33civil penalty of not more than one thousand dollars for each
34violation, not to exceed ten thousand dollars for violations
35arising out of the same transaction or occurrence, which shall
-10-1accrue to the state and may be recovered in a civil action
2brought by the commission.
32. A person is guilty of a class “C” felony for any of the
4following:
5a. Placing, or causing to be placed, a bet or wager on the
6basis of material nonpublic information relating to that bet
7or wager. For purposes of this paragraph, a bet or wager is
8“on the basis of material nonpublic information relating to
9that bet or wager” if the person placing the bet or wager, or
10causing it to be placed, was aware of the material nonpublic
11information when such person placed the bet or wager or caused
12it to be placed.
13b. Knowingly engaging in, facilitating, or concealing
14conduct that intends to improperly influence a betting
15outcome of a sporting event for purposes of financial gain, in
16connection with betting or wagering on a sporting event.
173. A person who violates subsection 2, paragraph “b”, shall
18be liable to the relevant sports governing body, which sports
19governing body may sue either at law or in equity in any court
20of competent jurisdiction.
21 Sec. 10. Section 99G.3, subsection 7, Code 2019, is amended
22to read as follows:
237. “Lottery”, “lotteries”, “lottery game”, “lottery games”,
24or “lottery products” means any game of chance approved by
25the board and operated pursuant to this chapter and games
26using mechanical or electronic devices, provided that the
27authority shall not authorize a monitor vending machine or
28a player-activated gaming machine that utilizes an internal
29randomizer to determine winning and nonwinning plays and that
30upon random internal selection of a winning play dispenses
31coins, currency, or a ticket, credit, or token to the player
32that is redeemable for cash or a prize, and excluding gambling
33or gaming conducted pursuant to chapter 99B, 99C, 99D, or 99F.
34 Sec. 11. Section 123.49, subsection 2, paragraph a, Code
352019, is amended to read as follows:
-11- 1a. Knowingly permit any gambling, except in accordance
2with chapter 99B, 99C, 99D, 99F, or 99G, or knowingly permit
3solicitation for immoral purposes, or immoral or disorderly
4conduct on the premises covered by the license or permit.
5 Sec. 12. Section 232C.4, subsection 3, Code 2019, is amended
6to read as follows:
73. An emancipated minor shall remain subject to voting
8restrictions under chapter 48A, gambling restrictions under
9chapter 99B, 99C, 99D, 99F, 99G, or 725, alcohol restrictions
10under chapter 123, compulsory attendance requirements under
11chapter 299, and cigarette tobacco restrictions under chapter
12453A.
13 Sec. 13. Section 537A.4, subsection 2, Code 2019, is amended
14to read as follows:
152. This section does not apply to a contract for the
16operation of or for the sale or rental of equipment for games
17of skill or games of chance, if both the contract and the games
18are in compliance with chapter 99B. This section does not
19apply to wagering authorized by chapter 99C. This section does
20not apply to wagering under the pari-mutuel method of wagering
21authorized by chapter 99D. This section does not apply to the
22sale, purchase, or redemption of a ticket or share in the state
23lottery in compliance with chapter 99G. This section does not
24apply to wagering authorized by chapter 99F. This section does
25not apply to the sale, purchase, or redemption of any ticket
26or similar gambling device legally purchased in Indian lands
27within this state.
28 Sec. 14. Section 714B.10, subsection 1, Code 2019, is
29amended to read as follows:
301. Advertising by sponsors registered pursuant to chapter
31557B, licensed pursuant to chapter 99B, or regulated pursuant
32to chapter 99C, 99D, 99F, or 99G.
33 Sec. 15. Section 725.13, Code 2019, is amended to read as
34follows:
35725.13 Definition of bookmaking.
-12- 1“Bookmaking” means advancing gambling activity by accepting
2bets upon the outcome of future contingent events as a business
3other than as permitted in chapters 99B, 99C, 99D, and 99F.
4These events include, but are not limited to, the results of
5a trial or contest of skill, speed, power, or endurance of
6a person or beast or between persons, beasts, fowl, motor
7vehicles, or mechanical apparatus or upon the result of any
8chance, casualty, unknown, or contingent event.
9 Sec. 16. Section 725.15, Code 2019, is amended to read as
10follows:
11725.15 Exceptions for legal gambling.
12Sections 725.5 through 725.10 and 725.12 do not apply to
13a game, activity, ticket, or device when lawfully possessed,
14used, conducted, or participated in pursuant to chapter 99B,
1599C, 99F, or 99G.
16 Sec. 17. TRANSITIONAL LICENSE. Notwithstanding any
17provisions of chapter 99C as enacted by this Act to the
18contrary, a person granted a license or registration by two
19or more states to conduct sports wagering as an interactive
20sports wagering platform may apply for and shall be granted a
21transitional license by the racing and gaming commission as
22an interactive sports wagering platform in this state subject
23to the requirements of chapter 99C, as enacted by this Act.
24The transitional license shall be valid until the earlier of
25the date the racing and gaming commission grants or denies a
26license under section 99C.4 to the person as an interactive
27sports wagering platform, or twelve months from the date the
28racing and gaming commission accepts applications for issuance
29of a license as an interactive sports wagering platform under
30section 99C.4.
31 Sec. 18. EFFECTIVE DATE. This division of this Act, being
32deemed of immediate importance, takes effect upon enactment.
33DIVISION II
34FANTASY SPORTS CONTESTS
35 Sec. 19. NEW SECTION. 99E.1 Definitions.
-13- 1As used in this chapter, unless the context otherwise
2requires:
31. “Applicant” means an internet fantasy sports contest
4service provider applying for a license to conduct internet
5fantasy sports contests under this chapter.
62. “Commission” means the state racing and gaming commission
7created under section 99D.5.
83. “Fantasy sports contest” includes any fantasy or
9simulated game or contest in which the fantasy sports contest
10operator is not a participant in the game or contest, the value
11of all prizes and awards offered to winning participants are
12established and made known to the participants in advance
13of the contest, all winning outcomes reflect the relative
14knowledge and skill of the participants and shall be determined
15by accumulated statistical results of the performance of
16individuals, including athletes in the case of sporting events,
17and no winning outcome is based on the score, point spread, or
18any performance or performances of any single actual team or
19solely on any single performance of an individual athlete or
20player in any single actual event.
214. “Internet fantasy sports contest” means a method of
22entering a fantasy sports contest by which a person may
23establish an account with an internet fantasy sports contest
24service provider, deposit money into the account, and use
25the account balance for entering a fantasy sports contest by
26utilizing electronic communication.
275. “Internet fantasy sports contest adjusted revenues” means,
28for each internet fantasy sports contest, the amount equal to
29the total charges and fees collected from all participants
30entering the internet fantasy sports contest less winnings paid
31to participants in the contest, multiplied by the location
32percentage.
336. “Internet fantasy sports contest player” means a person
34who is at least twenty-one years of age and participates in an
35internet fantasy sports contest operated by an internet fantasy
-14-1sports contest service provider.
27. “Internet fantasy sports contest service provider” means
3a person, including a licensee under chapter 99D or 99F, who
4conducts an internet fantasy sports contest as authorized by
5this chapter.
68. “Location percentage” means, for each internet fantasy
7sports contest, the percentage, rounded to the nearest tenth of
8a percent, equal to the total charges and fees collected from
9all internet fantasy sports contest players located in this
10state divided by the total charges and fees collected from all
11participants in the internet fantasy sports contest.
12 Sec. 20. NEW SECTION. 99E.2 Internet fantasy sports
13contests authorized.
14The system of entering an internet fantasy sports contest as
15provided by this chapter is legal when conducted by a licensed
16internet fantasy sports contest service provider as provided in
17this chapter.
18 Sec. 21. NEW SECTION. 99E.3 Commission — powers.
191. The commission shall have full jurisdiction over and
20shall supervise internet fantasy sports contests and internet
21fantasy sports contest service providers as governed by this
22chapter.
232. The commission shall have the following powers and shall
24adopt rules pursuant to chapter 17A to administer and implement
25this chapter:
26a. To review and investigate applicants and determine the
27eligibility of applicants for a license to conduct internet
28fantasy sports contests, pursuant to rules adopted by the
29commission.
30b. To license and regulate internet fantasy sports contest
31service providers subject to the requirements of this chapter.
32c. To provide for the prevention of practices detrimental to
33the public and to provide for the best interests of internet
34fantasy sports contests.
35d. To investigate alleged violations of this chapter
-15-1or the commission rules, orders, or final decisions and to
2take appropriate disciplinary action against a licensee, or
3institute appropriate legal action for enforcement, or both.
4Information gathered during an investigation is confidential
5during the pendency of the investigation.
6e. To assess fines and revoke or suspend licenses and to
7impose penalties for violations of this chapter.
8f. To take any other action as may be reasonable or
9appropriate to enforce this chapter and the commission rules.
10 Sec. 22. NEW SECTION. 99E.4 Requirements of applicant —
11fee.
121. An applicant for a license to conduct internet fantasy
13sports contests shall complete and sign an application on
14the form prescribed and published by the commission. The
15application shall include such information of the applicant
16that the commission deems necessary for purposes of issuing a
17license pursuant to this chapter.
182. An applicant shall submit fingerprints and information
19that the commission deems necessary to the commission in the
20manner prescribed on the application forms. The fingerprints
21may be submitted to the federal bureau of investigation by
22the department of public safety through the state criminal
23history repository for the purpose of a national criminal
24history check. The results of a criminal history record check
25conducted pursuant to this subsection shall be considered a
26confidential record under chapter 22.
273. If the commission is not satisfied that it can determine
28if an applicant meets the requirements necessary for issuing
29a license pursuant to this chapter, the commission may
30request the department of public safety, division of criminal
31investigation, to investigate and obtain the information
32necessary for the commission to make a determination on whether
33to issue the applicant a license.
344. The commission shall charge the applicant a reasonable
35fee set by the department of public safety, division of
-16-1criminal investigation, to defray those costs associated
2with the fingerprint and national criminal history check
3requirements of subsection 2 concerning the applicant. In
4addition, if the commission requests that an additional
5investigation be conducted by the division of criminal
6investigation as provided in subsection 3, the commission shall
7charge the applicant the reasonable costs of this additional
8investigation. These fees and costs are in addition to any
9other license fees and costs charged by the commission. The
10fees and costs may be retained by the department of public
11safety, division of criminal investigation, and shall be
12considered repayment receipts as defined in section 8.2.
135. The commission shall not grant a license to an applicant
14if there is substantial evidence that any of the following
15apply:
16a. A license issued to the applicant to conduct internet
17fantasy sports contests in another jurisdiction has been
18revoked by an entity licensing persons to conduct such contests
19in that jurisdiction.
20b. The applicant has not demonstrated financial
21responsibility sufficient to adequately meet the requirements
22of the enterprise proposed.
23c. The applicant does not adequately disclose the true
24owners of the enterprise proposed.
25d. The applicant has knowingly made a false statement of a
26material fact to the commission.
27e. The applicant has failed to meet a monetary obligation in
28connection with conducting an internet fantasy sports contest.
29f. The applicant is not of good repute and moral character
30or the applicant has pled guilty to, or has been convicted of,
31a felony.
32g. Any member of the board of directors of the applicant is
33not twenty-one years of age or older.
346. A person who knowingly makes a false statement on the
35application is guilty of an aggravated misdemeanor.
-17- 17. For the purposes of this section, “applicant” includes
2each member of the board of directors of an internet fantasy
3sports contest service provider.
4 Sec. 23. NEW SECTION. 99E.5 Licenses — fees — terms and
5conditions — revocation.
61. If the commission is satisfied that the requirements
7of this chapter and its rules adopted under this chapter
8applicable to licensees have been or will be complied with, the
9commission shall issue a license for a period of not more than
10three years to an applicant to conduct internet fantasy sports
11contests in this state.
122. A licensed internet fantasy sports contest service
13provider shall use commercially reasonable methods to comply
14with all of the following requirements:
15a. Prevent employees of the internet fantasy sports contest
16service provider and relatives living in the same household of
17such employees from competing in any internet fantasy sports
18contest on the service provider’s digital platform in which the
19service provider offers a cash prize to the public.
20b. Verify that an internet fantasy sports contest player
21located in this state is twenty-one years of age or older.
22c. Ensure that coaches, officials, players, contestants,
23or other individuals who participate in a game or contest
24that is the subject of an internet fantasy sports contest are
25restricted from entering an internet fantasy sports contest in
26which the outcome is determined, in whole or in part, by the
27accumulated statistical results of a team of individuals in the
28game or contest in which they participate.
29d. Allow individuals to restrict themselves from entering
30an internet fantasy sports contest conducted by the internet
31fantasy sports contest service provider upon request and take
32reasonable steps to prevent those individuals from entering
33any internet fantasy sports contests conducted by the internet
34fantasy sports contest service provider.
35e. Allow individuals to establish an account with an
-18-1internet fantasy sports contest service provider by utilizing
2electronic communication.
3f. Disclose the number of entries a single internet fantasy
4sports contest player may submit to each internet fantasy
5sports contest and take reasonable steps to prevent players
6from submitting more than the allowable number of entries for
7that internet fantasy sports contest.
8g. Segregate internet fantasy sports contest player funds
9from operational funds or maintain a reserve in the form of
10cash, cash equivalents, an irrevocable letter of credit,
11payment processor reserves and receivables, a bond, or a
12combination thereof in the amount of the deposits in internet
13fantasy sports contest player accounts for the benefit and
14protection of internet fantasy sports contest player funds held
15in internet fantasy sports contest accounts by the internet
16fantasy sports contest service provider.
17h. Annually contract with a third party to perform an
18independent examination, consistent with the attestation
19standards established by the American institute of certified
20public accountants, to ensure compliance with all of the
21requirements in this chapter and submit the results of the
22independent audit to the commission. The audit shall be
23submitted to the commission by July 1 of the year following the
24year subject to the audit.
25i. Pay the tax as provided in section 99E.6.
263. The annual license fee to conduct internet fantasy sports
27contests shall be five hundred dollars. Moneys collected by
28the commission from the annual license fee paid under this
29subsection shall be considered repayment receipts as defined
30in section 8.2.
314. a. A licensed internet fantasy sports contest service
32provider shall pay a regulatory fee to the commission. The
33regulatory fee shall be established by the commission based on
34the costs of administering and enforcing this chapter.
35b. A licensed internet fantasy sports contest service
-19-1provider shall receive a credit for the amount of the
2regulatory fee paid by the provider against the taxes to be
3paid pursuant to section 99E.6.
4c. Moneys collected by the commission from the regulatory
5fees paid under this subsection shall be considered repayment
6receipts as defined in section 8.2.
75. Upon a violation of any of the conditions listed in
8section 99E.4 or this section by a licensee, the commission
9shall immediately revoke the license.
10 Sec. 24. NEW SECTION. 99E.6 Internet fantasy sports contest
11tax — rate — allocations.
121. A tax of seven and one-half percent is imposed on
13internet fantasy sports contest adjusted revenues. The tax
14imposed by this section shall be paid by the internet fantasy
15sports contest service provider to the commission as provided
16by the commission.
172. Of the revenues collected pursuant to this section, an
18amount equal to one-half of one percent of internet fantasy
19sports contest adjusted revenues is transferred to a special
20revenue account in the general fund of the state to be used,
21subject to an appropriation by the general assembly, by the
22department of public health for purposes of the gambling
23treatment program established pursuant to section 135.150. The
24remaining amount of the revenues collected pursuant to this
25section shall be deposited in the rebuild Iowa infrastructure
26fund created in section 8.57.
27 Sec. 25. NEW SECTION. 99E.7 Internet fantasy sports
28contests — age restrictions.
29A person under the age of twenty-one years shall not enter an
30internet fantasy sports contest. A person who violates this
31section with respect to entering an internet fantasy sports
32contest commits a scheduled violation under section 805.8C,
33subsection 12.
34 Sec. 26. NEW SECTION. 99E.8 Division of criminal
35investigation.
-20- 1If the commission has reasonable cause to believe that
2a licensee has committed a violation of this chapter, the
3commission may request the division of criminal investigation
4of the department of public safety to investigate to determine
5licensee compliance with the requirements of this chapter.
6The criminal investigation division and the commission shall
7cooperate to the maximum extent possible on an investigation.
8The commission shall assess the licensee the reasonable costs
9of the investigation conducted by the division of criminal
10investigation pursuant to a request by the commission under
11this section. The costs may be retained by the department of
12public safety, division of criminal investigation, and shall be
13considered repayment receipts as defined in section 8.2.
14 Sec. 27. NEW SECTION. 99E.9 Civil penalty.
15A person who willfully fails to comply with the requirements
16of this chapter and the rules adopted pursuant to chapter 17A
17under this chapter shall be liable for a civil penalty of
18not more than one thousand dollars for each violation, not
19to exceed ten thousand dollars for violations arising out of
20the same transaction or occurrence, which shall accrue to the
21state and may be recovered in a civil action brought by the
22commission.
23 Sec. 28. Section 232C.4, subsection 3, Code 2019, is amended
24to read as follows:
253. An emancipated minor shall remain subject to voting
26restrictions under chapter 48A, gambling restrictions under
27chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
28contest restrictions under chapter 99E, alcohol restrictions
29under chapter 123, compulsory attendance requirements under
30chapter 299, and cigarette tobacco restrictions under chapter
31453A.
32 Sec. 29. Section 714B.10, subsection 1, Code 2019, is
33amended to read as follows:
341. Advertising by sponsors registered pursuant to chapter
35557B, licensed pursuant to chapter 99B, or regulated pursuant
-21-1to chapter 99D, 99E, 99F, or 99G.
2 Sec. 30. Section 725.15, Code 2019, is amended to read as
3follows:
4725.15 Exceptions for legal gambling.
5Sections 725.5 through 725.10 and 725.12 do not apply to
6a game, activity, ticket, or device when lawfully possessed,
7used, conducted, or participated in pursuant to chapter 99B,
899E, 99F, or 99G.
9 Sec. 31. Section 805.8C, Code 2019, is amended by adding the
10following new subsection:
11 NEW SUBSECTION. 12. Internet fantasy sports contest
12violations. For violations of legal age for entering an
13internet fantasy sports contest under section 99E.7, the
14scheduled fine is five hundred dollars. Failure to pay the
15fine by a person under the age of eighteen shall not result in
16the person being detained in a secure facility.
17 Sec. 32. TRANSITIONAL LICENSE. Notwithstanding any
18provisions of chapter 99E as enacted by this Act to the
19contrary, a person granted a license or registration by two or
20more states to conduct internet fantasy sports contests may
21apply for and shall be granted a transitional license by the
22racing and gaming commission to conduct internet fantasy sports
23contests in this state subject to the requirements of chapter
2499E, as enacted by this Act. The transitional license shall
25be valid until the earlier of the date the racing and gaming
26commission grants or denies a license under section 99E.5 to
27the person to conduct internet fantasy sports contests, or
28twelve months from the date the racing and gaming commission
29accepts applications for issuance of a license to conduct
30internet fantasy sports contests under section 99E.5.
31 Sec. 33. EFFECTIVE DATE. This division of this Act, being
32deemed of immediate importance, takes effect upon enactment.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-22- 1This bill authorizes wagering on sporting events and fantasy
2sports contests.
3SPORTS WAGERING. Division I of the bill authorizes wagering
4on sporting events and certain sporting contests and provides
5for the licensing and regulation of sports wagering.
6New Code section 99C.1 provides for definitions. “Sporting
7event” is defined to include portions of a sporting event and
8individual performance statistics of athletes in a sporting
9event or combination of sporting events. “Interactive sports
10wagering platform” is defined to mean a person licensed to
11conduct sports wagering via any electronic means to include
12an internet site. “Official league data” is defined to mean
13any data related to a sporting event obtained and authorized
14for use through the relevant sports governing body of that
15sporting event. “Sports governing body” is defined to mean
16the organization that prescribes final rules and codes of
17conduct with respect to a sporting event and “registered sports
18governing body” is defined to mean a sports governing body that
19is headquartered in the United States and has registered with
20the racing and gaming commission. “Sports wagering operator”
21is defined to mean an interactive sports wagering platform that
22has entered into an agreement with a gaming licensee to conduct
23sports wagering and a gaming licensee that conducts sports
24wagering pursuant to the requirements of the new Code chapter.
25“Gaming licensee” is defined as a person licensed to conduct
26gambling games under Code chapter 99F. “Sports wagering” is
27defined to exclude entering a fantasy sports contest as defined
28in new Code section 99E.1. “Tier one sports wager” means a
29sports wager that is solely determined by the final score or
30outcome of a sporting event that is placed before the sporting
31event begins and “tier two sports wager” means a sports wager
32that is not a tier one sports wager.
33New Code section 99C.2 provides that the system of sports
34wagering is legal when conducted by a sports wagering operator
35as provided in the new Code chapter.
-23- 1New Code section 99C.3 establishes the powers of the
2racing and gaming commission to license and regulate sports
3wagering. The Code section authorizes the commission to
4investigate applicants for a license as an interactive
5sports wagering platform, assess fines and revoke or suspend
6licenses, impose penalties for violations of the new Code
7chapter, regulate advertisements for sports wagering and sports
8wagering operators, and to take any other action to enforce
9the requirements of the new Code chapter. The Code section
10also authorizes the commission to establish procedures for
11sports governing bodies to register with the commission and
12to restrict, limit, or exclude wagers on certain sporting
13events and to restrict sources of data that may be utilized for
14purposes of sports wagering.
15New Code section 99C.4 establishes requirements for an
16applicant receiving a license as an interactive sports wagering
17platform and for authorizing a gaming licensee to conduct
18sports wagering. The Code section sets the initial fee for a
19license as an interactive sports wagering platform at $10,000
20with an annual renewal fee of $5,000.
21New Code section 99C.5 establishes terms and conditions for
22sports wagering operators. The Code section provides that a
23sports wagering operator shall use commercially reasonable
24methods to prevent any employees and certain family members
25from participating in sports wagering, verify that a person
26placing a wager on a sporting event is age 21 or older, ensure
27that participants in a sporting event sanctioned by a sports
28governing body shall not be allowed to place a wager on any
29sporting event sanctioned by that sports governing body,
30permit individuals to establish an account with an interactive
31sports wagering platform by utilizing electronic communication
32and to restrict themselves from wagering on a sporting event
33with a sports wagering operator, conduct background checks on
34employees involved in sports wagering, prevent individuals
35with nonpublic confidential information from placing wagers,
-24-1report criminal and disciplinary proceedings and abnormal
2betting activity to the racing and gaming commission and the
3relevant sports governing body, maintain the confidentiality
4of information provided by a sports governing body to the
5sports wagering operator, and pay the royalty fee imposed by
6the new Code chapter. In addition, the Code section authorizes
7a sports wagering operator to share revenue with a sports
8governing body.
9New Code section 99C.6 establishes sports wagering
10requirements and a royalty fee. The Code section provides that
1130 days after notification by a sports governing body, a sports
12wagering operator shall use only official league data for tier
13two sports wagers unless the sports governing body is unable to
14provide the data on commercially reasonable terms. The Code
15section also requires sports wagering operators to remit to the
16racing and gaming commission a royalty fee of one-quarter of
17one percent of amounts wagered on sporting events conducted by
18registered sports governing bodies. The Code section provides
19the mechanism for distributing royalty fee funds remitted to
20the commission to registered sports governing bodies.
21New Code section 99C.7 concerns records and confidentiality.
22The Code section requires sports wagering operators to maintain
23records of all bets and wagers and to provide information on
24bets and wagers on sporting events sanctioned by a sports
25governing body to the sports governing body upon notice to
26the racing and gaming commission. The Code section provides
27that certain records provided by a sports wagering operator to
28the racing and gaming commission shall be kept confidential
29by the commission, except as otherwise provided by the Code
30section, unless otherwise ordered by a court, by the lawful
31custodian of the records, or by another person duly authorized
32to release such information. The bill lists the records to be
33kept confidential as promotional play receipts records, patron
34and customer records, surveillance records, security reports
35and network audits, internal control records, employee records,
-25-1marketing expenses, and any information specifically requested
2for inspection by the commission.
3New Code section 99C.8 authorizes the division of criminal
4investigation of the department of public safety to investigate
5compliance by sports wagering operators with the requirements
6of the new Code chapter.
7New Code section 99C.9 establishes civil and criminal
8penalties for certain violations. The Code section provides
9that a person who willfully fails to comply with the
10requirements of this new Code chapter shall be liable for a
11civil penalty of not more than $1,000 for each violation,
12not to exceed $10,000 for violations arising out of the same
13transaction or occurrence. The bill also establishes that a
14person is guilty of a class “C” felony for placing a bet or
15wager on the basis of material nonpublic information relating
16to the bet or wager or knowingly engaging in or concealing
17conduct intended to improperly influence a betting outcome.
18A class “C” felony is punishable by confinement for no more
19than 10 years and a fine of at least $1,000 but not more than
20$10,000.
21The bill also makes changes to Code sections 99G.3, 123.49,
22232C.4, 537A.4, 714B.10, 725.13, and 725.15 to provide that
23provisions in those Code sections that list some or all Code
24chapters that govern lawful gambling also lists the new Code
25chapter provided in the bill.
26The bill provides for the issuance of a transitional license
27by the racing and gaming commission to a person to conduct
28sports wagering as an interactive sports wagering platform
29in this state if the person has been granted a license or
30registration by two or more other states to conduct sports
31wagering. The bill provides that the transitional license
32shall be valid until the earlier of the date the commission
33grants or denies a license to the person or 12 months from
34the date the commission accepts applications for issuance of
35a license.
-26- 1The bill provides that this division takes effect upon
2enactment.
3FANTASY SPORTS CONTESTS. Division II of the bill authorizes
4internet fantasy sports contests and provides for the
5licensing, regulation, and taxation of internet fantasy sports
6contests.
7New Code section 99E.1 provides for definitions. A “fantasy
8sports contest” is defined as any fantasy or simulated game
9or contest in which all prizes and awards offered to winning
10participants are established and made known in advance of the
11contest, all winning outcomes reflect the relative knowledge
12and skill of the participants and are determined predominantly
13by accumulated statistical results of the performance of
14individuals, and no winning outcome is based on the score, or
15performance of any single actual team or combination of such
16teams or solely on any single performance of an individual
17athlete in any single actual sporting or other event. An
18“internet fantasy sports contest” is defined as a method of
19entering a fantasy sports contest by establishing an account
20with an internet fantasy sports contest service provider. An
21“internet fantasy sports contest player” is defined as a person
22who is at least 21 years of age who participates in an internet
23fantasy sports contest. The bill also defines “internet
24fantasy sports contest adjusted revenues”, “internet fantasy
25sports contest service provider”, and “location percentage”.
26New Code section 99E.2 provides that the system of entering
27an internet fantasy sports contest is legal when conducted by a
28licensed internet fantasy sports contest service provider as
29provided in the new Code chapter.
30New Code section 99E.3 establishes the powers of the racing
31and gaming commission in relation to internet fantasy sports
32contests and internet fantasy sports contest service providers.
33Specifically, the Code section authorizes the commission
34to investigate and license internet fantasy sports contest
35service providers, assess fines and revoke or suspend licenses,
-27-1impose penalties for violations of the Code chapter, and take
2any other action to enforce the requirements of the new Code
3chapter.
4New Code section 99E.4 establishes the requirements for an
5applicant to be granted a license to conduct internet fantasy
6sports contests. The Code section allows the commission
7to charge the applicant a fee for the department of public
8safety, division of criminal investigation, to defray the
9costs associated with any investigation. The new Code
10section provides that a license shall not be issued if there
11is evidence that the applicant has failed to meet certain
12qualifying requirements. The Code section provides that a
13person who knowingly makes a false statement on the application
14is guilty of an aggravated misdemeanor.
15New Code section 99E.5 establishes the terms and conditions
16of licenses issued to conduct internet fantasy sports contests.
17The Code section provides that a license may be issued for a
18period of not more than three years and provides that the
19annual license fee shall be $500. The Code section also
20provides for the payment of a regulatory fee to be set
21by the racing and gaming commission based on the costs of
22administering and enforcing the new Code chapter. The Code
23section further provides that each licensee shall receive
24a credit for the amount of the regulatory fee paid against
25taxes to be paid pursuant to the new Code chapter. The Code
26section provides that a licensed internet fantasy sports
27contest service provider shall use commercially reasonable
28methods to prevent any employees and certain family members
29from participating in internet fantasy sports contests on the
30service provider’s digital platform, verify that internet
31fantasy sports contest players located in this state are 21
32or older, ensure that participants in a game or contest shall
33not be allowed to enter an internet fantasy sports contest
34involving that game or contest, permit individuals to establish
35an account with an internet fantasy sports contest service
-28-1provider by electronic communication and to restrict themselves
2from entering an internet fantasy sports contest, perform an
3independent audit, and pay the tax imposed by the new Code
4chapter.
5New Code section 99E.6 provides for a tax of 7.5 percent
6to be imposed on internet fantasy sports contest adjusted
7revenues. The bill defines, in new Code section 99E.1,
8“internet fantasy sports contest adjusted revenues” as the
9total of fees and charges collected, less winnings, in an
10internet fantasy sports contest multiplied by the percentage
11of fees and charges paid by participants who are located in
12this state in that contest. The bill provides that of the
13revenues collected, an amount equal to .5 percent of internet
14fantasy sports contest adjusted revenues is transferred to a
15special revenue account in the general fund to be used, subject
16to an appropriation, by the department of public health for
17gambling treatment with the remainder of revenues collected to
18be deposited in the rebuild Iowa infrastructure fund.
19New Code section 99E.7 provides that a person under the
20age of 21 shall not enter an internet fantasy sports contest.
21A person who violates this Code section commits a scheduled
22violation under Code section 805.8C and is subject to a $500
23fine. Code section 805.8C is amended to reflect this violation
24and applicable fine.
25New Code section 99E.8 authorizes the division of criminal
26investigation of the department of public safety to investigate
27licensee compliance with the requirements of the new Code
28chapter.
29New Code section 99E.9 establishes civil penalties. The
30new Code section provides that a person who willfully fails to
31comply with the requirements of this new Code chapter shall be
32liable for a civil penalty of not more than $1,000 for each
33violation, not to exceed $10,000 for violations arising out of
34the same transaction or occurrence.
35The bill also makes changes to Code sections 232C.4,
-29-1714B.10, and 725.15 to provide that provisions in those Code
2sections that list some or all Code chapters that govern lawful
3gambling also lists the new Code chapter provided in this
4division of the bill.
5This division of the bill takes effect upon enactment.
-30-ec/rn