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House File 748 - IntroducedA Bill ForAn Act 1relating to sports gambling and wagering, by providing
2for fantasy sports contests and sports betting, providing
3for taxes and fees, making penalties applicable, and
4including implementation and effective date provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2LICENSED SPORTS BETTING
3 Section 1. Section 99D.7, subsection 23, Code 2019, is
4amended to read as follows:
523. To establish a process to allow a person to be
6voluntarily excluded from advance deposit wagering as defined
7in section 99D.11, from an internet fantasy sports contest as
8defined in section 99E.1, from advance deposit sports betting
9wagering as defined in section 99F.9, from the wagering area
10of a racetrack enclosure and from the gaming floor and sports
11betting wagering area, as defined in section 99F.1, of all
12other licensed facilities under this chapter and chapter 99F
13as provided in this subsection. The process shall provide
14that an initial request by a person to be voluntarily excluded
15shall be for a period of five years or life and any subsequent
16request following any five-year period shall be for a period
17of five years or life. The process established shall require
18that licensees be provided electronic access to names and
19social security numbers of persons voluntarily excluded
20through a secured interactive internet site maintained by
21the commission and information regarding persons voluntarily
22excluded shall be disseminated to all licensees under this
23chapter and chapter 99F. The names, social security numbers,
24and information regarding persons voluntarily excluded shall
25be kept confidential unless otherwise ordered by a court or by
26another person duly authorized to release such information.
27The process established shall also require a person requesting
28to be voluntarily excluded be provided information compiled
29by the Iowa department of public health on gambling treatment
30options. The state and any licensee under this chapter or
31chapter 99F shall not be liable to any person for any claim
32which may arise from this process. In addition to any other
33penalty provided by law, any money or thing of value that has
34been obtained by, or is owed to, a voluntarily excluded person
35as a result of wagers made by the person after the person has
-1-1been voluntarily excluded shall be forfeited by the person and
2shall be credited to the general fund of the state.
3 Sec. 2. Section 99F.1, subsection 1, Code 2019, is amended
4to read as follows:
51. “Adjusted gross receipts” means the gross receipts less
6winnings paid to wagerers on gambling games. However, “adjusted
7gross receipts” does not include promotional play receipts
8received after the date in any fiscal year that the commission
9determines that the wagering tax imposed pursuant to section
1099F.11 on all licensees in that fiscal year on promotional
11play receipts exceeds twenty-five million eight hundred twenty
12thousand dollars.
13 Sec. 3. Section 99F.1, Code 2019, is amended by adding the
14following new subsections:
15 NEW SUBSECTION. 2A. “Authorized sporting event” means a
16professional sporting event, a collegiate sporting event, or an
17international team or individual sporting event governed by the
18international olympic committee.
19 NEW SUBSECTION. 23. “Sports betting” means the acceptance
20of wagers on an authorized sporting event by any system of
21wagering as authorized by the commission. “Sports betting”
22does not include wagering on a race as defined in section
2399D.2, entering an internet fantasy sports contest as defined
24in section 99E.1, or placing a wager on the performance or
25nonperformance of any individual athlete participating in a
26single game or match of a collegiate sporting event in which
27a collegiate team from this state is a participant. “Sports
28betting” also does not include wagering on the performance of
29athletes in an international individual sporting event governed
30by the international olympic committee in which any participant
31in the sporting event is under eighteen years of age.
32 NEW SUBSECTION. 24. “Sports betting net receipts” means
33the gross receipts less winnings paid to wagerers on sports
34betting.
35 NEW SUBSECTION. 25. “Sports betting wagering area” means an
-2-1area, as designated by the commission, in which sports betting
2is conducted.
3 Sec. 4. Section 99F.1, subsection 17, Code 2019, is amended
4to read as follows:
517. “Licensee” means any person licensed under section 99F.7
6or 99F.7A.
7 Sec. 5. Section 99F.3, Code 2019, is amended to read as
8follows:
999F.3 Gambling games and sports betting authorized.
10The system of wagering on a gambling game and sports betting
11 as provided by this chapter is legal, when conducted on an
12excursion gambling boat, gambling structure, or racetrack
13enclosure at authorized locations by a licensee as provided in
14this chapter.
15 Sec. 6. Section 99F.4, subsections 3 and 22, Code 2019, are
16amended to read as follows:
173. To adopt standards under which all excursion gambling
18boat operations shall be held and standards for the facilities
19within which the gambling operations are to be held. The
20commission may authorize the operation of gambling games on an
21excursion gambling boat and sports betting in a sports betting
22wagering area which is also licensed to sell or serve alcoholic
23beverages, wine, or beer as defined in section 123.3.
2422. To establish a process to allow a person to be
25voluntarily excluded from advance deposit wagering as defined
26in section 99D.11, from an internet fantasy sports contest as
27defined in section 99E.1, from advance deposit sports betting
28wagering as defined in section 99F.9, from the gaming floor
29and sports betting wagering area of an excursion gambling
30boat, from the wagering area, as defined in section 99D.2,
31and from the gaming floor and sports betting wagering area
32 of all other licensed facilities under this chapter and
33chapter 99D as provided in this subsection. The process shall
34provide that an initial request by a person to be voluntarily
35excluded shall be for a period of five years or life and any
-3-1subsequent request following any five-year period shall be for
2a period of five years or life. The process established shall
3require that licensees be provided electronic access to names
4and social security numbers of persons voluntarily excluded
5through a secured interactive internet site maintained by
6the commission and information regarding persons voluntarily
7excluded shall be disseminated to all licensees under this
8chapter and chapter 99D. The names, social security numbers,
9and information regarding persons voluntarily excluded shall
10be kept confidential unless otherwise ordered by a court or by
11another person duly authorized to release such information.
12 The process established shall also require a person requesting
13to be voluntarily excluded be provided information compiled
14by the Iowa department of public health on gambling treatment
15options. The state and any licensee under this chapter or
16chapter 99D shall not be liable to any person for any claim
17which may arise from this process. In addition to any other
18penalty provided by law, any money or thing of value that has
19been obtained by, or is owed to, a voluntarily excluded person
20as a result of wagers made by the person after the person has
21been voluntarily excluded shall be forfeited by the person and
22shall be credited to the general fund of the state.
23 Sec. 7. Section 99F.4, Code 2019, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 27. To adopt standards under which all
26sports betting is conducted, including the scope and type of
27wagers allowed, to identify occupations within sports betting
28which require licensing, and to adopt standards for licensing
29and background qualifications for occupations including
30establishing fees for the occupational license. In considering
31standards regarding the scope and type of wagers allowed for
32sports betting, the commission shall consult with interested
33professional and collegiate sports leagues and, if interested,
34the international olympic committee. All revenue received by
35the commission under this chapter from license fees shall be
-4-1deposited in the general fund of the state and shall be subject
2to the requirements of section 8.60. All revenue received by
3the commission from regulatory fees shall be deposited into the
4gaming regulatory revolving fund established in section 99F.20.
5 Sec. 8. Section 99F.6, subsection 4, paragraph a,
6subparagraphs (3) and (5), Code 2019, are amended to read as
7follows:
8(3) The commission shall authorize, subject to the
9debt payments for horse racetracks and the provisions of
10paragraph “b” for dog racetracks, a licensee who is also
11licensed to conduct pari-mutuel dog or horse racing to use
12receipts from gambling games and sports betting within the
13racetrack enclosure to support the horse racing industry and to
14 supplement purses for races particularly for Iowa-bred horses
15pursuant to an agreement which shall be negotiated between the
16licensee and representatives of the dog or horse owners. For
17agreements subject to commission approval concerning purses
18for horse racing beginning on or after January 1, 2006, the
19agreements shall provide that total annual purses for all horse
20racing shall be no less than eleven percent of the first two
21hundred million dollars of net receipts, and six percent of
22net receipts above two hundred million dollars. In addition,
23live standardbred horse racing shall not be conducted at the
24horse racetrack in Polk county, but the purse moneys designated
25for standardbred racing pursuant to section 99D.7, subsection
265, paragraph “b”, shall be included in calculating the total
27annual purses required to be paid pursuant to this subsection.
28Agreements that are subject to commission approval concerning
29horse purses for a period of time beginning on or after January
301, 2006, shall be jointly submitted to the commission for
31approval.
32(5) For purposes of this paragraph, “net receipts” means
33the annual adjusted gross receipts from all gambling games and
34sports betting net receipts, less the annual amount of money
35pledged by the owner of the facility to fund a project approved
-5-1to receive vision Iowa funds as of July 1, 2004.
2 Sec. 9. NEW SECTION. 99F.7A Sports betting — license —
3terms and conditions — fees.
41. The commission shall, upon payment of an initial
5license fee of fifteen thousand dollars and submission of an
6application to the commission consistent with the requirements
7of section 99F.6, issue a license to conduct sports betting
8to a licensee authorized to conduct gambling games at a
9pari-mutuel racetrack enclosure or a licensee authorized to
10operate an excursion gambling boat or gambling structure,
11subject to the requirements of this chapter. The annual
12renewal fee for a license to conduct sports betting shall be
13fifteen thousand dollars.
142. A licensee under this section shall do all of the
15following:
16a. Include on the internet site or mobile application used
17by the licensee to conduct advance deposit sports betting
18wagering as authorized in section 99F.9 the statewide telephone
19number authorized by the Iowa department of public health to
20provide problem gambling information and extensive responsible
21gaming features in addition to those described in section
2299F.4, subsection 22.
23b. Establish, subject to commission approval, sports betting
24wagering rules that specify the amounts to be paid on winning
25sports betting wagers, the effect of changes in the scheduling
26of an authorized sporting event subject to sports betting, and
27the source of the information used to determine the outcome
28of a sports betting wager. The sports betting wagering rules
29shall be displayed in the licensee’s sports betting wagering
30area, posted on the internet site or mobile application used by
31the licensee to conduct advance deposit sports betting wagering
32as authorized in section 99F.9, and included in the terms and
33conditions of the licensee’s advance deposit account sports
34betting wagering system.
353. A licensee issued a license to conduct sports betting
-6-1under this section shall employ commercially reasonable steps
2to prohibit coaches, athletic trainers, officials, players, or
3other individuals who participate in an authorized sporting
4event that is the subject of sports betting from sports betting
5under this chapter. In addition, a licensee shall employ
6commercially reasonable steps to prohibit persons who are
7employed in a position with direct involvement with coaches,
8players, athletic trainers, officials, players, or participants
9in an authorized sporting event that is the subject of sports
10betting from sports betting under this chapter.
11 Sec. 10. Section 99F.8, Code 2019, is amended to read as
12follows:
1399F.8 Bond of licensee.
14A licensee licensed under section 99F.7 shall post a bond
15to the state of Iowa before the license is issued in a sum
16as the commission shall fix, with sureties to be approved by
17the commission. The bond shall be used to guarantee that the
18licensee faithfully makes the payments, keeps its books and
19records and makes reports, and conducts its gambling games and
20sports betting in conformity with this chapter and the rules
21adopted by the commission. The bond shall not be canceled by
22a surety on less than thirty days’ notice in writing to the
23commission. If a bond is canceled and the licensee fails to
24file a new bond with the commission in the required amount on
25or before the effective date of cancellation, the licensee’s
26license shall be revoked. The total and aggregate liability
27of the surety on the bond is limited to the amount specified in
28the bond.
29 Sec. 11. Section 99F.9, subsection 1, Code 2019, is amended
30to read as follows:
311. Except as permitted in this section, the licensee
32shall not permit no sports betting or any form of wagering on
33gambling games.
34 Sec. 12. Section 99F.9, Code 2019, is amended by adding the
35following new subsection:
-7-1 NEW SUBSECTION. 3A. a. For the purposes of this section,
2unless the context otherwise requires:
3(1) “Advance deposit sports betting wagering” means a method
4of sports betting in which an eligible individual may, in an
5account established with a licensee under section 99F.7A,
6deposit moneys into the account and use the account balance to
7pay for sports betting. Prior to January 1, 2021, an account
8must be established by an eligible individual in person with
9a licensee.
10(2) “Advance deposit sports betting wagering operator” means
11an advance deposit sports betting wagering operator licensed
12by the commission who has entered into an agreement with a
13licensee under section 99F.7A to provide advance deposit sports
14betting wagering.
15(3) “Eligible individual” means an individual who is at
16least twenty-one years of age or older who is located within
17this state.
18b. The commission may authorize a licensee under section
1999F.7A to conduct advance deposit sports betting wagering. An
20advance deposit sports betting wager may be placed in person
21in the sports wagering area, or from any other location via
22a telephone-type device or any other electronic means. The
23commission may also issue an advance deposit sports betting
24wagering operator license to an entity who complies with this
25subsection and section 99F.6 and may require the advance
26deposit sports wagering operator to conduct an audit consistent
27with the requirements of section 99F.13.
28 Sec. 13. Section 99F.9, subsection 4, Code 2019, is amended
29to read as follows:
304. A person under the age of twenty-one years shall not make
31or attempt to make a wager pursuant to subsection 3A or on an
32excursion gambling boat, gambling structure, or in a racetrack
33enclosure and shall not be allowed on the gaming floor of
34an excursion gambling boat or gambling structure or in the
35wagering area, as defined in section 99D.2, or on the gaming
-8-1floor of a racetrack enclosure. However, a person eighteen
2years of age or older may be employed to work on the gaming
3floor of an excursion gambling boat or gambling structure or
4in the wagering area or on the gaming floor of a racetrack
5enclosure. A person who violates this subsection with respect
6to making or attempting to make a wager commits a scheduled
7violation under section 805.8C, subsection 5, paragraph “a”.
8 Sec. 14. Section 99F.11, subsection 3, unnumbered paragraph
91, Code 2019, is amended to read as follows:
10The taxes imposed by this section on adjusted gross receipts
11from gambling games authorized under this chapter shall be paid
12by the licensee to the treasurer of state within ten days after
13the close of the day when the wagers were made and shall be
14distributed as follows:
15 Sec. 15. Section 99F.11, Code 2019, is amended by adding the
16following new subsection:
17 NEW SUBSECTION. 4. a. A tax is imposed on the sports
18betting net receipts received each fiscal year by a licensed
19operator from sports betting authorized under this chapter at
20the rate of six and three-quarters percent.
21b. The taxes imposed by this subsection for sports betting
22authorized under this chapter shall be paid by the licensed
23operator to the treasurer of state as determined by the
24commission and shall be distributed as follows:
25(1) An amount equal to one-fourth of one percent of sports
26betting net receipts is appropriated to the Iowa department of
27public health for purposes of the gambling treatment program
28established in section 135.150.
29(2) The remaining amount of sports betting net receipts
30taxes imposed pursuant to this subsection shall be credited as
31provided in section 8.57, subsection 5.
32 Sec. 16. Section 99F.12, subsection 2, Code 2019, is amended
33to read as follows:
342. a. The licensee shall furnish to the commission reports
35and information as the commission may require with respect to
-9-1the licensee’s activities.
2b. A licensee under section 99F.7A shall promptly report
3to the commission any criminal or disciplinary proceedings
4commenced against the licensee or its employees in connection
5with the licensee conducting sports betting including advance
6deposit sports betting wagering, any abnormal wagering activity
7or patterns that may indicate a concern about the integrity
8of an authorized sporting event or events, and any other
9conduct with the potential to corrupt a wagering outcome of
10an authorized sporting event for purposes of financial gain,
11including but not limited to match fixing, and suspicious or
12illegal wagering activities, including the use of funds derived
13from illegal activity, wagers to conceal or launder funds
14derived from illegal activity, use of agents to place wagers,
15or use of false identification. The commission is required
16to share any information received pursuant to this paragraph
17with the division of criminal investigation, any other law
18enforcement entity upon request, or any regulatory agency the
19commission deems appropriate. The commission may also share
20any information received pursuant to this paragraph with any
21sports team or sports governing body as the commission deems
22appropriate, but shall not share any information that would
23interfere with an ongoing criminal investigation.
24c. The gross receipts and adjusted gross receipts from
25gambling shall be separately handled and accounted for from
26all other moneys received from operation of an excursion
27gambling boat or from operation of a racetrack enclosure or
28gambling structure licensed to conduct gambling games. The
29commission may designate a representative to board a licensed
30excursion gambling boat or to enter a racetrack enclosure or
31gambling structure licensed to conduct gambling games. The
32representative shall have full access to all places within the
33enclosure of the boat, the gambling structure, or the racetrack
34enclosure and shall directly supervise the handling and
35accounting of all gross receipts and adjusted gross receipts
-10-1from gambling. The representative shall supervise and check
2the admissions. The compensation of a representative shall be
3fixed by the commission but shall be paid by the licensee.
4 Sec. 17. Section 99F.15, subsection 1, paragraph c, Code
52019, is amended to read as follows:
6c. Acting, or employing a person to act, as a shill or
7decoy to encourage participation in a gambling game or sports
8betting.
9 Sec. 18. Section 99F.15, subsection 4, paragraphs d, h, and
10i, Code 2019, are amended to read as follows:
11d. Cheats at a gambling game, including but not limited to
12committing any act which alters the outcome of the game, or
13cheats at sports betting.
14h. Claims, collects, or takes, or attempts to claim,
15collect, or take, money or anything of value in or from the
16gambling games or sports betting, with intent to defraud,
17without having made a wager contingent on winning a gambling
18game or sports betting wager, or claims, collects, or takes an
19amount of money or thing of value of greater value than the
20amount won.
21i. Knowingly entices or induces a person to go to any place
22where a gambling game or sports betting is being conducted or
23operated in violation of the provisions of this chapter with
24the intent that the other person plays or participates in that
25gambling game or sports betting.
26 Sec. 19. Section 99F.20, subsection 1, Code 2019, is amended
27to read as follows:
281. A gaming regulatory revolving fund is created in
29the state treasury under the control of the department of
30inspections and appeals. The fund shall consist of fees
31collected and deposited into the fund paid by licensees
32pursuant to section 99D.14, subsection 2, paragraph “c”, fees
33paid by licensees pursuant to section 99E.5, subsection 4,
34paragraph “c”, regulatory fees paid by licensees pursuant
35to section 99F.4, subsection 27, and fees paid by licensees
-11-1pursuant to section 99F.10, subsection 4, paragraph “c”. All
2costs relating to racetrack, excursion boat, and gambling
3structure regulation shall be paid from the fund as provided in
4appropriations made for this purpose by the general assembly.
5The department shall provide quarterly reports to the
6department of management and the legislative services agency
7specifying revenues billed and collected and expenditures
8from the fund in a format as determined by the department
9of management in consultation with the legislative services
10agency.
11 Sec. 20. EMERGENCY RULES. The state racing and gaming
12commission created under section 99D.5 may adopt emergency
13rules under section 17A.4, subsection 3, and section 17A.5,
14subsection 2, paragraph “b”, to implement the provisions of
15this division of this Act and the rules shall be effective
16immediately upon filing unless a later date is specified in the
17rules. Any rules adopted in accordance with this section shall
18also be published as a notice of intended action as provided
19in section 17A.4.
20 Sec. 21. IMPLEMENTATION. The racing and gaming commission
21shall not implement this division of this Act until the date
22the commission has adopted rules pursuant to chapter 17A
23providing for such implementation and such rules have become
24effective.
25 Sec. 22. EFFECTIVE DATE. This division of this Act, being
26deemed of immediate importance, takes effect upon enactment.
27DIVISION II
28INTERNET FANTASY SPORTS CONTESTS
29 Sec. 23. Section 80.25A, Code 2019, is amended to read as
30follows:
3180.25A Pari-mutuel and gambling game Gaming operations —
32investigation and enforcement.
33The commissioner of public safety shall direct the chief
34of the division of criminal investigation to establish a
35subdivision to be the primary criminal investigative and
-12-1enforcement agency for the purpose of enforcement of chapters
299D, 99E, and 99F. The commissioner of public safety shall
3appoint or assign other agents to the division as necessary to
4enforce chapters 99D, 99E, and 99F. All enforcement officers,
5assistants, and agents of the division are subject to section
680.15 except clerical workers.
7 Sec. 24. NEW SECTION. 99E.1 Definitions.
8As used in this chapter, unless the context otherwise
9requires:
101. “Applicant” means an internet fantasy sports contest
11service provider applying for a license to conduct internet
12fantasy sports contests under this chapter.
132. “Commission” means the state racing and gaming commission
14created under section 99D.5.
153. “Fantasy sports contest” includes any fantasy or
16simulated game or contest in which the fantasy sports contest
17operator is not a participant in the game or contest, the value
18of all prizes and awards offered to winning participants are
19established and made known to the participants in advance
20of the contest, all winning outcomes reflect the relative
21knowledge and skill of the participants and shall be determined
22by accumulated statistical results of the performance of
23individuals, including athletes in the case of sporting events,
24and no winning outcome is based on the score, point spread, or
25any performance or performances of any single actual team or
26solely on any single performance of an individual athlete or
27player in any single actual event.
284. “Internet fantasy sports contest” means a method of
29entering a fantasy sports contest by which a person may
30establish an account with an internet fantasy sports contest
31service provider, deposit money into the account, and use
32the account balance for entering a fantasy sports contest by
33utilizing electronic communication.
345. “Internet fantasy sports contest adjusted revenues” means,
35for each internet fantasy sports contest, the amount equal to
-13-1the total charges and fees collected from all participants
2entering the internet fantasy sports contest less winnings paid
3to participants in the contest, multiplied by the location
4percentage.
56. “Internet fantasy sports contest player” means a person
6who is at least twenty-one years of age and participates in an
7internet fantasy sports contest operated by an internet fantasy
8sports contest service provider.
97. “Internet fantasy sports contest service provider” means
10a person, including a licensee under chapter 99D or 99F, who
11conducts an internet fantasy sports contest as authorized by
12this chapter.
138. “Licensee” means any person licensed under section 99E.5
14to conduct internet fantasy sports contests.
159. “Location percentage” means, for each internet fantasy
16sports contest, the percentage, rounded to the nearest tenth of
17a percent, equal to the total charges and fees collected from
18all internet fantasy sports contest players located in this
19state divided by the total charges and fees collected from all
20participants in the internet fantasy sports contest.
21 Sec. 25. NEW SECTION. 99E.2 Internet fantasy sports
22contests authorized.
23The system of entering an internet fantasy sports contest as
24provided by this chapter is legal when conducted by a licensed
25internet fantasy sports contest service provider as provided in
26this chapter.
27 Sec. 26. NEW SECTION. 99E.3 Commission — powers.
281. The commission shall have full jurisdiction over and
29shall supervise internet fantasy sports contests and internet
30fantasy sports contest service providers as governed by this
31chapter.
322. The commission shall have the following powers and shall
33adopt rules pursuant to chapter 17A to administer and implement
34this chapter:
35a. To review and investigate applicants and determine the
-14-1eligibility of applicants for a license to conduct internet
2fantasy sports contests, pursuant to rules adopted by the
3commission.
4b. To license and regulate internet fantasy sports contest
5service providers subject to the requirements of this chapter.
6c. To provide for the prevention of practices detrimental to
7the public and to provide for the best interests of internet
8fantasy sports contests.
9d. To investigate alleged violations of this chapter
10or the commission rules, orders, or final decisions and to
11take appropriate disciplinary action against a licensee, or
12institute appropriate legal action for enforcement, or both.
13Information gathered during an investigation is confidential
14during the pendency of the investigation.
15e. To assess fines and revoke or suspend licenses and to
16impose penalties for violations of this chapter.
17f. To take any other action as may be reasonable or
18appropriate to enforce this chapter and the commission rules.
19 Sec. 27. NEW SECTION. 99E.4 Requirements of applicant —
20fee.
211. An applicant for a license to conduct internet fantasy
22sports contests shall complete and sign an application on
23the form prescribed and published by the commission. The
24application shall include such information of the applicant
25that the commission deems necessary for purposes of issuing a
26license pursuant to this chapter.
272. An applicant shall submit fingerprints and information
28that the commission deems necessary to the commission in the
29manner prescribed on the application forms. The fingerprints
30may be submitted to the federal bureau of investigation by
31the department of public safety through the state criminal
32history repository for the purpose of a national criminal
33history check. The results of a criminal history record check
34conducted pursuant to this subsection shall be considered a
35confidential record under chapter 22.
-15- 13. Before a license is granted, the division of criminal
2investigation of the department of public safety shall conduct
3a thorough background investigation of the applicant for a
4license to conduct internet fantasy sports contests. The
5applicant shall provide information on a form as required by
6the division of criminal investigation.
74. The commission shall charge the applicant a reasonable
8fee set by the division of criminal investigation of the
9department of public safety, to defray those costs associated
10with the fingerprint and national criminal history check
11requirements of subsection 2 and background investigations
12conducted by agents of the division of criminal investigation
13as provided in subsection 3. These fees and costs are in
14addition to any other license fees and costs charged by the
15commission.
165. The commission shall not grant a license to an applicant
17if there is substantial evidence that any of the following
18apply:
19a. A license issued to the applicant to conduct internet
20fantasy sports contests in another jurisdiction has been
21revoked, or a request for a license to conduct internet fantasy
22sports contests in another jurisdiction has been denied, by
23an entity licensing persons to conduct such contests in that
24jurisdiction.
25b. The applicant has not demonstrated financial
26responsibility sufficient to adequately meet the requirements
27of the enterprise proposed.
28c. The applicant does not adequately disclose the true
29owners of the enterprise proposed.
30d. The applicant has knowingly made a false statement of a
31material fact to the commission.
32e. The applicant has failed to meet a monetary obligation in
33connection with conducting an internet fantasy sports contest.
34f. The applicant is not of good repute and moral character
35or the applicant has pled guilty to, or has been convicted of,
-16-1a felony.
2g. Any member of the board of directors of the applicant is
3not twenty-one years of age or older.
46. A person who knowingly makes a false statement on the
5application is guilty of an aggravated misdemeanor.
67. For the purposes of this section, “applicant” includes
7each member of the board of directors of an internet fantasy
8sports contest service provider.
9 Sec. 28. NEW SECTION. 99E.5 Licenses — fees — terms and
10conditions — revocation.
111. If the commission is satisfied that the requirements
12of this chapter and its rules adopted under this chapter
13applicable to licensees have been or will be complied with, the
14commission shall, upon payment of an initial annual license
15fee of five thousand dollars, issue a license for a period of
16not more than three years to an applicant to conduct internet
17fantasy sports contests in this state.
182. A licensed internet fantasy sports contest service
19provider shall use commercially reasonable methods to comply
20with all of the following requirements:
21a. Prevent employees of the internet fantasy sports contest
22service provider and relatives living in the same household of
23such employees from competing in any internet fantasy sports
24contest on the service provider’s digital platform in which the
25service provider offers a cash prize to the public.
26b. Verify that an internet fantasy sports contest player
27located in this state is twenty-one years of age or older.
28c. Ensure that coaches, officials, players, contestants,
29or other individuals who participate in a game or contest
30that is the subject of an internet fantasy sports contest are
31restricted from entering an internet fantasy sports contest in
32which the outcome is determined, in whole or in part, by the
33accumulated statistical results of a team of individuals in the
34game or contest in which they participate.
35d. Allow individuals to restrict themselves from entering
-17-1an internet fantasy sports contest conducted by the internet
2fantasy sports contest service provider upon request and take
3reasonable steps to prevent those individuals from entering
4any internet fantasy sports contests conducted by the internet
5fantasy sports contest service provider.
6e. Allow individuals to establish an account with an
7internet fantasy sports contest service provider by utilizing
8electronic communication.
9f. Disclose the number of entries a single internet fantasy
10sports contest player may submit to each internet fantasy
11sports contest and take reasonable steps to prevent players
12from submitting more than the allowable number of entries for
13that internet fantasy sports contest.
14g. Segregate internet fantasy sports contest player funds
15from operational funds or maintain a reserve in the form of
16cash, cash equivalents, an irrevocable letter of credit,
17payment processor reserves and receivables, a bond, or a
18combination thereof in the amount of the deposits in internet
19fantasy sports contest player accounts for the benefit and
20protection of internet fantasy sports contest player funds held
21in internet fantasy sports contest accounts by the internet
22fantasy sports contest service provider.
23h. Conduct an annual audit under section 99E.9.
24i. Pay the tax as provided in section 99E.6.
253. The annual renewal fee for a license to conduct internet
26fantasy sports contests shall be five thousand dollars. Moneys
27collected by the commission from the annual renewal fee for
28a license paid under this subsection shall be considered
29repayment receipts as defined in section 8.2.
304. a. A licensed internet fantasy sports contest service
31provider shall pay a regulatory fee to the commission. The
32regulatory fee shall be established by the commission based on
33the costs of administering and enforcing this chapter.
34b. A licensed internet fantasy sports contest service
35provider shall receive a credit for the amount of the license
-18-1and regulatory fee paid by the provider against the taxes to be
2paid pursuant to section 99E.6.
3c. Notwithstanding section 8.60, the portion of the fee
4paid pursuant to paragraph “a” relating to the costs of the
5commission shall be deposited into the gaming regulatory
6revolving fund established in section 99F.20.
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. 29. NEW SECTION. 99E.6 Internet fantasy sports contest
11tax — rate.
121. A tax is imposed on internet fantasy sports contest
13adjusted revenues received each fiscal year by an internet
14fantasy sports contest service provider from internet fantasy
15sports contests authorized under this chapter at the rate of
16six and three-quarters percent.
172. The taxes imposed by this section for internet fantasy
18sports contests authorized under this chapter shall be paid by
19the internet fantasy sports contest service provider to the
20treasurer of state as determined by the commission and shall be
21distributed as follows:
22a. An amount equal to one-fourth of one percent of internet
23fantasy sports contest adjusted revenues is appropriated to the
24Iowa department of public health for purposes of the gambling
25treatment program established in section 135.150.
26b. The remaining amount of internet fantasy sports contest
27adjusted revenues taxes imposed pursuant to this section shall
28be credited as provided in section 8.57, subsection 5.
29 Sec. 30. NEW SECTION. 99E.7 Internet fantasy sports
30contests — age restrictions.
31A person under the age of twenty-one years shall not enter an
32internet fantasy sports contest. A person who violates this
33section with respect to entering an internet fantasy sports
34contest commits a scheduled violation under section 805.8C,
35subsection 12.
-19-1 Sec. 31. NEW SECTION. 99E.8 Licensees — records — reports
2— confidentiality.
31. An internet fantasy sports contest service provider
4shall keep its books and records so as to clearly show the
5internet fantasy sports contest adjusted revenues for each
6internet fantasy sports contest subject to tax in this state.
72. a. The licensee shall furnish to the commission reports
8and information as the commission may require with respect to
9the licensee’s activities.
10b. A licensee shall promptly report to the commission any
11criminal or disciplinary proceedings commenced against the
12licensee or its employees in connection with the licensee
13conducting an internet fantasy sports contest, any abnormal
14contest activity or patterns that may indicate a concern about
15the integrity of an internet fantasy sports contest, and any
16other conduct with the potential to corrupt an outcome of an
17internet fantasy sports contest for purposes of financial gain,
18including but not limited to match fixing, and suspicious or
19illegal internet fantasy sports contest activities, including
20the use of funds derived from illegal activity, deposits
21of money to enter an internet fantasy sports contest to
22conceal or launder funds derived from illegal activity, use
23of agents to enter an internet fantasy sports contest, or
24use of false identification. The commission is authorized
25to share any information received pursuant to this paragraph
26with the division of criminal investigation, any other law
27enforcement entity upon request, or any regulatory agency the
28commission deems appropriate. The commission may also share
29any information received pursuant to this paragraph with any
30sports team or sports governing body as the commission deems
31appropriate, but shall not share any information that would
32interfere with an ongoing criminal investigation.
333. Except as provided in subsection 4, the books and records
34kept by a licensee as provided by this section are public
35records and the examination, publication, and dissemination of
-20-1the books and records are governed by the provisions of chapter
222.
34. The records of the commission shall be governed by the
4provisions of chapter 22, provided that, in addition to records
5that may be kept confidential pursuant to section 22.7, the
6following records provided by a licensee to the commission
7shall be kept confidential, unless otherwise ordered by a
8court, by the lawful custodian of the records, or by another
9person duly authorized to release such information:
10a. Patron and customer records.
11b. Security reports and network audits.
12c. Internal control and compliance records.
13d. Employee records.
14e. Marketing expenses.
15f. Supplemental schedules to the certified audit, except for
16those books and records as described in subsection 1 of this
17section, that are obtained by the commission in connection with
18the annual audit under section 99E.9.
19g. Any information specifically requested for inspection by
20the commission or a representative of the commission.
21 Sec. 32. NEW SECTION. 99E.9 Annual audit of licensee
22operations.
23Within ninety days after the end of the licensee’s fiscal
24year, the licensee shall transmit to the commission an audit
25of the licensee’s total internet fantasy sports contest
26operations, including an itemization of all expenses and
27subsidies. Each audit shall be conducted by a certified public
28accountant authorized to practice in the state of Iowa under
29chapter 542 who is selected by the licensee and approved by the
30commission.
31 Sec. 33. NEW SECTION. 99E.10 Civil penalty.
32A person who willfully fails to comply with the requirements
33of this chapter and the rules adopted pursuant to chapter 17A
34under this chapter shall be liable for a civil penalty of
35not more than one thousand dollars for each violation, not
-21-1to exceed ten thousand dollars for violations arising out of
2the same transaction or occurrence, which shall accrue to the
3state and may be recovered in a civil action brought by the
4commission.
5 Sec. 34. Section 99F.2, Code 2019, is amended to read as
6follows:
799F.2 Scope of provisions.
8This chapter does not apply to the pari-mutuel system of
9wagering used or intended to be used in connection with the
10horse-race or dog-race meetings as authorized under chapter
1199D, internet fantasy sports contests authorized under chapter
1299E, lottery or lotto games authorized under chapter 99G, or
13bingo or games of skill or chance authorized under chapter 99B.
14 Sec. 35. Section 99F.4B, Code 2019, is amended to read as
15follows:
1699F.4B Rules.
17The department of inspections and appeals shall cooperate
18to the maximum extent possible with the division of criminal
19investigation in adopting rules relating to the gaming
20operations in this chapter and chapter chapters 99D and 99E.
21 Sec. 36. Section 232C.4, subsection 3, Code 2019, is amended
22to read as follows:
233. An emancipated minor shall remain subject to voting
24restrictions under chapter 48A, gambling restrictions under
25chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
26contest restrictions under chapter 99E, alcohol restrictions
27under chapter 123, compulsory attendance requirements under
28chapter 299, and cigarette tobacco restrictions under chapter
29453A.
30 Sec. 37. Section 714B.10, subsection 1, Code 2019, is
31amended to read as follows:
321. Advertising by sponsors registered pursuant to chapter
33557B, licensed pursuant to chapter 99B, or regulated pursuant
34to chapter 99D, 99E, 99F, or 99G.
35 Sec. 38. Section 725.15, Code 2019, is amended to read as
-22-1follows:
2725.15 Exceptions for legal gambling.
3Sections 725.5 through 725.10 and 725.12 do not apply to
4a game, activity, ticket, or device when lawfully possessed,
5used, conducted, or participated in pursuant to chapter 99B,
699E, 99F, or 99G.
7 Sec. 39. Section 805.8C, Code 2019, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 12. Internet fantasy sports contest
10violations. For violations of legal age for entering an
11internet fantasy sports contest under section 99E.7, the
12scheduled fine is five hundred dollars. Failure to pay the
13fine by a person under the age of eighteen shall not result in
14the person being detained in a secure facility.
15 Sec. 40. TRANSITIONAL LICENSE. Notwithstanding any
16provisions of chapter 99E as enacted by this Act to the
17contrary, a person granted a license or registration by two or
18more states to conduct internet fantasy sports contests may
19apply for and shall be granted a transitional license by the
20racing and gaming commission to conduct internet fantasy sports
21contests in this state subject to the requirements of chapter
2299E, as enacted by this Act. The transitional license shall
23be valid until the earlier of the date the racing and gaming
24commission grants or denies a license under section 99E.5 to
25the person to conduct internet fantasy sports contests, or
26twelve months from the date the racing and gaming commission
27accepts applications for issuance of a license to conduct
28internet fantasy sports contests under section 99E.5.
29 Sec. 41. EMERGENCY RULES. The state racing and gaming
30commission created under section 99D.5 may adopt emergency
31rules under section 17A.4, subsection 3, and section 17A.5,
32subsection 2, paragraph “b”, to implement the provisions of
33this division of this Act and the rules shall be effective
34immediately upon filing unless a later date is specified in the
35rules. Any rules adopted in accordance with this section shall
-23-1also be published as a notice of intended action as provided
2in section 17A.4.
3 Sec. 42. IMPLEMENTATION. The racing and gaming commission
4shall not implement this division of this Act until the date
5the commission has adopted rules pursuant to chapter 17A
6providing for such implementation and such rules have become
7effective.
8 Sec. 43. EFFECTIVE DATE. This division of this Act, being
9deemed of immediate importance, takes effect upon enactment.
10DIVISION III
11GAMBLING REGULATION
12 Sec. 44. Section 99B.41, Code 2019, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 1A. “Social fantasy sports contest” means
15any fantasy or simulated game or contest in which the value
16of all prizes and awards offered to winning participants are
17established and made known to the participants in advance of
18the contest and do not exceed a total of one thousand dollars
19or equivalent consideration, all winning outcomes reflect
20the relative knowledge and skill of the participants and
21shall be determined by accumulated statistical results of
22the performance of individuals in events occurring over more
23than a twenty-four-hour period, including athletes in the case
24of sporting events, and no winning outcome is based on the
25score, point spread, or any performance or performances of
26any single actual team or solely on any single performance of
27an individual athlete or player in any single actual event.
28“Social fantasy sports contest” does not include an internet
29fantasy sports contest as defined in section 99E.1.
30 Sec. 45. Section 99B.45, subsection 2, Code 2019, is amended
31by adding the following new paragraph:
32 NEW PARAGRAPH. c. A social fantasy sports contest.
33 Sec. 46. Section 99D.7, subsection 5, paragraph c,
34subparagraphs (2) and (3), Code 2019, are amended to read as
35follows:
-24- 1(2) Of the purse moneys designated for thoroughbred
2racing, two percent shall be distributed to an organization
3representing owners of thoroughbred race horses for the
4purpose purposes of paying the annual operating expenses of the
5organization, and for the promotion and marketing of Iowa-bred
6horses, benevolence, thoroughbred aftercare, breeder promotions
7and awards, and improvements to the horse racetrack in Polk
8county. The organization receiving such purse moneys shall
9complete and provide to the commission an annual audit and
10accounting of the allocation of such moneys.
11(3) Of the purse moneys designated for quarter horse
12racing, two percent shall be distributed to an organization
13representing owners of quarter horse race horses for the
14purpose purposes of paying the annual operating expenses of
15the organization, and for the promotion and marketing of
16Iowa-bred horses, benevolence, quarter horse aftercare, breeder
17promotions and awards, and improvements to the horse racetrack
18in Polk county. The organization receiving such purse moneys
19shall complete and provide to the commission an annual audit
20and accounting of the allocation of such moneys.
21 Sec. 47. Section 99D.11, subsection 6, paragraph c,
22subparagraph (4), Code 2019, is amended by striking the
23subparagraph.
24EXPLANATION
25The inclusion of this explanation does not constitute agreement with
26the explanation’s substance by the members of the general assembly.
27This bill authorizes sports gambling and wagering, including
28sports betting and fantasy sports contests.
29LICENSED SPORTS BETTING. This division authorizes and
30licenses sports betting.
31Code section 99F.1, concerning definitions, is amended. The
32bill defines “sports betting” as wagering on an authorized
33sporting event by any system of wagering as authorized by the
34racing and gaming commission (commission). “Sports betting”
35is further defined to exclude wagering on the performance of
-25-1an athlete participating in a collegiate sporting event that
2includes a collegiate team from this state or in an individual
3olympic event in which any athlete is under eighteen years of
4age, horse racing, and internet fantasy sports contests. An
5“authorized sporting event” is defined to include professional
6and collegiate sporting events and international team and
7individual sporting events governed by the international
8olympic committee. The definition of “licensee” is amended to
9include a person licensed to conduct sports betting. The bill
10defines “sports betting net receipts” as gross receipts less
11winnings paid to wagerers on sports betting. “Sports betting
12wagering area” is defined as an area, as designated by the
13commission, in which sports betting is conducted.
14Code sections 99D.7(23) and 99F.4(22), concerning persons
15voluntarily excluded from wagering or gaming areas, are amended
16to include internet fantasy sports contests, advance deposits
17wagering, advance deposit sports betting wagering, and the
18sports betting wagering area.
19Code section 99F.3, concerning authorized wagering under
20Code chapter 99F, is amended to authorize sports betting.
21Code section 99F.4, concerning racing and gaming commission
22powers, is amended to authorize the operation of sports betting
23in a sports betting wagering area on an excursion gambling
24boat which is also licensed to serve alcoholic beverages and
25grants the racing and gaming commission the authority to adopt
26standards under which sports betting is conducted including
27the scope and type of wagers allowed. The bill provides that
28revenue received by the commission from license fees for sports
29betting shall be deposited in the general fund of the state
30and revenue received by the commission from regulatory fees
31shall be deposited into the gaming regulatory revolving fund
32established in Code section 99F.20.
33Code section 99F.6, concerning licensee applicants,
34is amended to provide that net receipts, for purposes of
35determining purse agreements for horse racing, include sports
-26-1betting net receipts.
2New Code section 99F.7A provides specific requirements
3relative to the licensing, operation, and fees applicable to
4sports betting.
5The bill provides that the commission shall, upon payment
6of an initial license fee of $15,000, issue a license to
7conduct sports betting to a licensee authorized to conduct
8gambling games at a pari-mutuel racetrack enclosure or a
9licensee authorized to operate an excursion gambling boat or
10gambling structure. The bill provides that the annual renewal
11fee for a license shall also be $15,000. The bill provides
12that a licensee establish, and display and post, sports
13betting wagering rules specifying the amounts to be paid on
14winning wagers, the effect of changes in the scheduling of an
15authorized sporting event, and the source of information used
16to determine the outcome of a wager. The new Code section also
17provides that a licensee shall include on the internet site
18or mobile application used by the licensee to conduct advance
19deposit sports betting wagering the statewide telephone number
20authorized by the Iowa department of public health to provide
21problem gambling information and extensive responsible gaming
22features. The bill also provides that a licensee issued a
23license to conduct sports betting shall employ commercially
24reasonable steps to prohibit coaches, athletic trainers,
25officials, players, participants, or other persons employed in
26a position with direct involvement with such individuals from
27sports betting under Code chapter 99F.
28Code section 99F.8, concerning licensee bonding
29requirements, is amended to make such requirements applicable
30to sports betting.
31Code section 99F.9, concerning wagering on gambling games,
32is amended to allow the commission to authorize gambling game
33licensees under Code chapter 99F to conduct advance deposit
34sports betting wagering. The bill also allows a licensee
35under Code section 99F.7A to enter into an agreement with an
-27-1advance deposit sports betting wagering operator licensed
2by the commission to provide advance deposit sports betting
3wagering for the licensee and allows the commission to require
4the advance deposit sports betting wagering operator to
5conduct an audit. The bill would allow for an advance deposit
6sports betting wager to be placed in person at a licensed
7facility authorized to conduct gambling games or from any other
8location by telephone or other electronic means. The bill
9defines “advance deposit sports betting wagering” as a form
10of wagering where an eligible individual creates an account
11with a licensee, deposits money into that account, and can
12use the balance within the account for sports betting. Prior
13to January 1, 2021, an account must be established in person
14with a licensee. The bill defines an “eligible individual”
15for purposes of advance deposit sports betting wagering as an
16individual 21 years of age or older who is located within this
17state. The Code section is also amended to provide that a
18person under the age of 21 shall not make or attempt to make a
19wager by advance deposit sports wagering.
20Code section 99F.11, concerning the wagering tax, is
21amended. The bill provides that sports betting net receipts
22received each fiscal year by a licensed operator from sports
23betting shall be taxed at the rate of six and three-quarters
24percent. The taxes imposed shall be paid by the licensed
25operator to the treasurer of state as determined by the
26commission. The bill provides that of the taxes collected, an
27amount equal to one-fourth of one percent of sports betting net
28receipts is appropriated to the department of public health
29for the gambling treatment program with the remainder of taxes
30collected to be credited as provided in Code section 8.57,
31subsection 5.
32Code section 99F.12, concerning certain required reports
33and records of licensees, is amended to provide that a sports
34betting licensee shall promptly report to the commission any
35criminal or disciplinary proceedings commenced against the
-28-1licensee, any abnormal sports wagering activity, and any other
2conduct with the potential to corrupt a wagering outcome of an
3authorized sporting event. The bill requires the commission to
4share any information received with the division of criminal
5investigation, any other law enforcement entity, or regulatory
6agency the commission deems appropriate. The commission may
7also share information with a sports team or sports governing
8body as the commission deems appropriate if it will not
9interfere with an ongoing criminal investigation.
10Code section 99F.15, concerning certain prohibited
11activities and penalties, is amended to provide that current
12prohibitions on cheating at a gambling game, claiming anything
13of value from a gambling game with intent to defraud, and
14knowingly enticing a person to go where a gambling game is
15conducted in violation of Code chapter 99F also applies to
16sports betting.
17Code section 99F.20, concerning the gaming regulatory
18revolving fund, is amended to provide that regulatory fees
19by an internet fantasy sports contest service provider and
20by a licensee authorized to conduct sports wagering shall be
21deposited in the fund.
22This division of the bill takes effect upon enactment.
23However, the bill authorizes the racing and gaming commission
24to adopt emergency rules to implement the bill and provides
25that the racing and gaming commission shall not implement
26this division of the bill until the date the commission has
27adopted rules pursuant to Code chapter 17A providing for such
28implementation and such rules have become effective.
29INTERNET FANTASY SPORTS CONTESTS. This division of the bill
30authorizes internet fantasy sports contests and provides for
31the licensing, regulation, and taxation of internet fantasy
32sports contests.
33Code section 80.25, concerning gaming investigation and
34enforcement by the division of criminal investigation of
35the department of public safety, is amended to provide for
-29-1investigation and enforcement concerning the new Code chapter.
2New Code section 99E.1 provides for definitions. A “fantasy
3sports contest” is defined as any fantasy or simulated game
4or contest in which all prizes and awards offered to winning
5participants are established and made known in advance of the
6contest, all winning outcomes reflect the relative knowledge
7and skill of the participants and are determined predominantly
8by accumulated statistical results of the performance of
9individuals, and no winning outcome is based on the score, or
10performance of any single actual team or combination of such
11teams or solely on any single performance of an individual
12athlete in any single actual sporting or other event. An
13“internet fantasy sports contest” is defined as a method of
14entering a fantasy sports contest by establishing an account
15with an internet fantasy sports contest service provider. An
16“internet fantasy sports contest player” is defined as a person
17who is at least 21 years of age who participates in an internet
18fantasy sports contest. The bill also defines “internet
19fantasy sports contest adjusted revenues”, “internet fantasy
20sports contest service provider”, “licensee”, and “location
21percentage”.
22New Code section 99E.2 provides that the system of entering
23an internet fantasy sports contest is legal when conducted by a
24licensed internet fantasy sports contest service provider as
25provided in the new Code chapter.
26New Code section 99E.3 establishes the powers of the racing
27and gaming commission in relation to internet fantasy sports
28contests and internet fantasy sports contest service providers.
29Specifically, the Code section authorizes the commission
30to investigate and license internet fantasy sports contest
31service providers, assess fines and revoke or suspend licenses,
32impose penalties for violations of the Code chapter, and take
33any other action to enforce the requirements of the new Code
34chapter.
35New Code section 99E.4 establishes the requirements for an
-30-1applicant to be granted a license to conduct internet fantasy
2sports contests. The Code section allows the commission
3to charge the applicant a fee for the department of public
4safety, division of criminal investigation, to defray the
5costs associated with any investigation. The new Code
6section provides that a license shall not be issued if there
7is evidence that the applicant has failed to meet certain
8qualifying requirements. The Code section provides that a
9person who knowingly makes a false statement on the application
10is guilty of an aggravated misdemeanor.
11New Code section 99E.5 establishes the terms and conditions
12of licenses issued to conduct internet fantasy sports contests.
13The Code section provides that a license may be issued for
14a period of not more than three years and provides for an
15initial and annual license fee of $5,000. The Code section
16also provides for the payment of a regulatory fee to be set
17by the racing and gaming commission based on the costs of
18administering and enforcing the new Code chapter. The Code
19section further provides that each licensee shall receive a
20credit for the amount of the license and regulatory fee paid
21against taxes to be paid pursuant to the new Code chapter. The
22Code section provides that a licensed internet fantasy sports
23contest service provider shall use commercially reasonable
24methods to prevent any employees and certain family members
25from participating in internet fantasy sports contests on the
26service provider’s digital platform, verify that internet
27fantasy sports contest players located in this state are 21
28or older, ensure that participants in a game or contest shall
29not be allowed to enter an internet fantasy sports contest
30involving that game or contest, permit individuals to establish
31an account with an internet fantasy sports contest service
32provider by electronic communication and to restrict themselves
33from entering an internet fantasy sports contest, conduct an
34annual audit, and pay the tax imposed by the new Code chapter.
35New Code section 99E.6 provides for a tax of six and
-31-1three-quarters percent on internet fantasy sports contest
2adjusted revenues. The bill defines “internet fantasy sports
3contest adjusted revenues” as the total of fees and charges
4collected, less winnings, in an internet fantasy sports
5contest multiplied by the percentage of fees and charges
6paid by participants who are located in this state in that
7contest. The taxes imposed shall be paid by the internet
8fantasy sports contest service provider to the treasurer of
9state as determined by the commission. The bill provides
10that of the taxes collected, an amount equal to one-fourth
11of one percent of internet fantasy sports contest adjusted
12revenues is appropriated to the department of public health
13for the gambling treatment program with the remainder of taxes
14collected to be credited as provided in Code section 8.57,
15subsection 5.
16New Code section 99E.7 provides that a person under the
17age of 21 shall not enter an internet fantasy sports contest.
18A person who violates this Code section commits a scheduled
19violation under Code section 805.8C and is subject to a $500
20fine. Code section 805.8C is amended to reflect this violation
21and applicable fine.
22New Code section 99E.8 requires an internet fantasy sports
23contest service provider to keep books and records on internet
24fantasy sports contest adjusted revenues and to provide the
25commission reports and information as the commission may
26require. The bill provides that a licensee promptly report
27to the commission any criminal or disciplinary proceedings
28commenced against the licensee, any abnormal fantasy sports
29contest activity, and any other conduct with the potential to
30corrupt an outcome of an internet fantasy sports contest. The
31bill requires the commission to share any information received
32with the division of criminal investigation, any other law
33enforcement entity, or regulatory agency the commission deems
34appropriate. The commission may also share information with a
35sports team or sports governing body as the commission deems
-32-1appropriate if it will not interfere with an ongoing criminal
2investigation.
3New Code section 99E.9 requires a licensee to conduct an
4audit within 90 days after the end of the licensee’s fiscal
5year.
6New Code section 99E.10 establishes civil penalties. The
7new Code section provides that a person who willfully fails to
8comply with the requirements of this new Code chapter shall be
9liable for a civil penalty of not more than $1,000 for each
10violation, not to exceed $10,000 for violations arising out of
11the same transaction or occurrence.
12The bill also makes changes to Code sections 99F.2, 99F.4B,
13232C.4, 714B.10, and 725.15 to provide that provisions in those
14Code sections that list some or all Code chapters that govern
15lawful gambling also list the new Code chapter provided in this
16division of the bill.
17The bill provides for the issuance of a transitional license
18by the racing and gaming commission to a person to conduct
19internet fantasy sports contests in this state if the person
20has been granted a license or registration by two or more other
21states to conduct internet fantasy sports contests. The bill
22provides that the transitional license shall be valid until the
23earlier of the date the commission grants or denies a license
24to the person or 12 months from the date the commission accepts
25applications for issuance of a license.
26This division of the bill takes effect upon enactment.
27However, the bill authorizes the racing and gaming commission
28to adopt emergency rules to implement this division of the
29bill and provides that the racing and gaming commission shall
30not implement the bill until the date the commission has
31adopted rules pursuant to Code chapter 17A providing for such
32implementation and such rules have become effective.
33GAMBLING REGULATION. This division makes several changes
34related to gambling regulation. Code section 99B.45,
35concerning social gambling between individuals, is amended to
-33-1authorize social gambling on social fantasy sports contests.
2Code section 99B.41 is amended to define “social fantasy sports
3contest” as a fantasy sports contest in which prizes and awards
4offered to winning participants do not exceed $1,000 and
5winning outcomes are based on the performance of individuals in
6events occurring over more than a 24-hour period. Current law
7limits wins or losses on social gambling to $200.
8Code section 99D.7(5), concerning the purse structure for
9horse racing, is amended to provide that of the percentage
10of purse money for thoroughbred racing and for quarter horse
11racing that is distributed to organizations representing owners
12of each of the two horse breeds, that percentage of purse
13moneys may also be used for benevolence, horse aftercare,
14breeder promotions and awards, and improvements to the horse
15racetrack in Polk county.
16Code section 99D.11, subsection 6, concerning criminal
17penalties, is amended to strike the specific criminal penalty
18relating to an unlicensed advance deposit wagering operator or
19an individual taking or receiving wagers from residents of this
20state that are not authorized by the Code chapter.
-34-ec/rn
2for fantasy sports contests and sports betting, providing
3for taxes and fees, making penalties applicable, and
4including implementation and effective date provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2LICENSED SPORTS BETTING
3 Section 1. Section 99D.7, subsection 23, Code 2019, is
4amended to read as follows:
523. To establish a process to allow a person to be
6voluntarily excluded from advance deposit wagering as defined
7in section 99D.11, from an internet fantasy sports contest as
8defined in section 99E.1, from advance deposit sports betting
9wagering as defined in section 99F.9, from the wagering area
10of a racetrack enclosure and from the gaming floor and sports
11betting wagering area, as defined in section 99F.1, of all
12other licensed facilities under this chapter and chapter 99F
13as provided in this subsection. The process shall provide
14that an initial request by a person to be voluntarily excluded
15shall be for a period of five years or life and any subsequent
16request following any five-year period shall be for a period
17of five years or life. The process established shall require
18that licensees be provided electronic access to names and
19social security numbers of persons voluntarily excluded
20through a secured interactive internet site maintained by
21the commission and information regarding persons voluntarily
22excluded shall be disseminated to all licensees under this
23chapter and chapter 99F. The names, social security numbers,
24and information regarding persons voluntarily excluded shall
25be kept confidential unless otherwise ordered by a court or by
26another person duly authorized to release such information.
27The process established shall also require a person requesting
28to be voluntarily excluded be provided information compiled
29by the Iowa department of public health on gambling treatment
30options. The state and any licensee under this chapter or
31chapter 99F shall not be liable to any person for any claim
32which may arise from this process. In addition to any other
33penalty provided by law, any money or thing of value that has
34been obtained by, or is owed to, a voluntarily excluded person
35as a result of wagers made by the person after the person has
-1-1been voluntarily excluded shall be forfeited by the person and
2shall be credited to the general fund of the state.
3 Sec. 2. Section 99F.1, subsection 1, Code 2019, is amended
4to read as follows:
51. “Adjusted gross receipts” means the gross receipts less
6winnings paid to wagerers on gambling games. However, “adjusted
7gross receipts” does not include promotional play receipts
8received after the date in any fiscal year that the commission
9determines that the wagering tax imposed pursuant to section
1099F.11 on all licensees in that fiscal year on promotional
11play receipts exceeds twenty-five million eight hundred twenty
12thousand dollars.
13 Sec. 3. Section 99F.1, Code 2019, is amended by adding the
14following new subsections:
15 NEW SUBSECTION. 2A. “Authorized sporting event” means a
16professional sporting event, a collegiate sporting event, or an
17international team or individual sporting event governed by the
18international olympic committee.
19 NEW SUBSECTION. 23. “Sports betting” means the acceptance
20of wagers on an authorized sporting event by any system of
21wagering as authorized by the commission. “Sports betting”
22does not include wagering on a race as defined in section
2399D.2, entering an internet fantasy sports contest as defined
24in section 99E.1, or placing a wager on the performance or
25nonperformance of any individual athlete participating in a
26single game or match of a collegiate sporting event in which
27a collegiate team from this state is a participant. “Sports
28betting” also does not include wagering on the performance of
29athletes in an international individual sporting event governed
30by the international olympic committee in which any participant
31in the sporting event is under eighteen years of age.
32 NEW SUBSECTION. 24. “Sports betting net receipts” means
33the gross receipts less winnings paid to wagerers on sports
34betting.
35 NEW SUBSECTION. 25. “Sports betting wagering area” means an
-2-1area, as designated by the commission, in which sports betting
2is conducted.
3 Sec. 4. Section 99F.1, subsection 17, Code 2019, is amended
4to read as follows:
517. “Licensee” means any person licensed under section 99F.7
6or 99F.7A.
7 Sec. 5. Section 99F.3, Code 2019, is amended to read as
8follows:
999F.3 Gambling games and sports betting authorized.
10The system of wagering on a gambling game and sports betting
11 as provided by this chapter is legal, when conducted on an
12excursion gambling boat, gambling structure, or racetrack
13enclosure at authorized locations by a licensee as provided in
14this chapter.
15 Sec. 6. Section 99F.4, subsections 3 and 22, Code 2019, are
16amended to read as follows:
173. To adopt standards under which all excursion gambling
18boat operations shall be held and standards for the facilities
19within which the gambling operations are to be held. The
20commission may authorize the operation of gambling games on an
21excursion gambling boat and sports betting in a sports betting
22wagering area which is also licensed to sell or serve alcoholic
23beverages, wine, or beer as defined in section 123.3.
2422. To establish a process to allow a person to be
25voluntarily excluded from advance deposit wagering as defined
26in section 99D.11, from an internet fantasy sports contest as
27defined in section 99E.1, from advance deposit sports betting
28wagering as defined in section 99F.9, from the gaming floor
29and sports betting wagering area of an excursion gambling
30boat, from the wagering area, as defined in section 99D.2,
31and from the gaming floor and sports betting wagering area
32 of all other licensed facilities under this chapter and
33chapter 99D as provided in this subsection. The process shall
34provide that an initial request by a person to be voluntarily
35excluded shall be for a period of five years or life and any
-3-1subsequent request following any five-year period shall be for
2a period of five years or life. The process established shall
3require that licensees be provided electronic access to names
4and social security numbers of persons voluntarily excluded
5through a secured interactive internet site maintained by
6the commission and information regarding persons voluntarily
7excluded shall be disseminated to all licensees under this
8chapter and chapter 99D. The names, social security numbers,
9and information regarding persons voluntarily excluded shall
10be kept confidential unless otherwise ordered by a court or by
11another person duly authorized to release such information.
12 The process established shall also require a person requesting
13to be voluntarily excluded be provided information compiled
14by the Iowa department of public health on gambling treatment
15options. The state and any licensee under this chapter or
16chapter 99D shall not be liable to any person for any claim
17which may arise from this process. In addition to any other
18penalty provided by law, any money or thing of value that has
19been obtained by, or is owed to, a voluntarily excluded person
20as a result of wagers made by the person after the person has
21been voluntarily excluded shall be forfeited by the person and
22shall be credited to the general fund of the state.
23 Sec. 7. Section 99F.4, Code 2019, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 27. To adopt standards under which all
26sports betting is conducted, including the scope and type of
27wagers allowed, to identify occupations within sports betting
28which require licensing, and to adopt standards for licensing
29and background qualifications for occupations including
30establishing fees for the occupational license. In considering
31standards regarding the scope and type of wagers allowed for
32sports betting, the commission shall consult with interested
33professional and collegiate sports leagues and, if interested,
34the international olympic committee. All revenue received by
35the commission under this chapter from license fees shall be
-4-1deposited in the general fund of the state and shall be subject
2to the requirements of section 8.60. All revenue received by
3the commission from regulatory fees shall be deposited into the
4gaming regulatory revolving fund established in section 99F.20.
5 Sec. 8. Section 99F.6, subsection 4, paragraph a,
6subparagraphs (3) and (5), Code 2019, are amended to read as
7follows:
8(3) The commission shall authorize, subject to the
9debt payments for horse racetracks and the provisions of
10paragraph “b” for dog racetracks, a licensee who is also
11licensed to conduct pari-mutuel dog or horse racing to use
12receipts from gambling games and sports betting within the
13racetrack enclosure to support the horse racing industry and to
14 supplement purses for races particularly for Iowa-bred horses
15pursuant to an agreement which shall be negotiated between the
16licensee and representatives of the dog or horse owners. For
17agreements subject to commission approval concerning purses
18for horse racing beginning on or after January 1, 2006, the
19agreements shall provide that total annual purses for all horse
20racing shall be no less than eleven percent of the first two
21hundred million dollars of net receipts, and six percent of
22net receipts above two hundred million dollars. In addition,
23live standardbred horse racing shall not be conducted at the
24horse racetrack in Polk county, but the purse moneys designated
25for standardbred racing pursuant to section 99D.7, subsection
265, paragraph “b”, shall be included in calculating the total
27annual purses required to be paid pursuant to this subsection.
28Agreements that are subject to commission approval concerning
29horse purses for a period of time beginning on or after January
301, 2006, shall be jointly submitted to the commission for
31approval.
32(5) For purposes of this paragraph, “net receipts” means
33the annual adjusted gross receipts from all gambling games and
34sports betting net receipts, less the annual amount of money
35pledged by the owner of the facility to fund a project approved
-5-1to receive vision Iowa funds as of July 1, 2004.
2 Sec. 9. NEW SECTION. 99F.7A Sports betting — license —
3terms and conditions — fees.
41. The commission shall, upon payment of an initial
5license fee of fifteen thousand dollars and submission of an
6application to the commission consistent with the requirements
7of section 99F.6, issue a license to conduct sports betting
8to a licensee authorized to conduct gambling games at a
9pari-mutuel racetrack enclosure or a licensee authorized to
10operate an excursion gambling boat or gambling structure,
11subject to the requirements of this chapter. The annual
12renewal fee for a license to conduct sports betting shall be
13fifteen thousand dollars.
142. A licensee under this section shall do all of the
15following:
16a. Include on the internet site or mobile application used
17by the licensee to conduct advance deposit sports betting
18wagering as authorized in section 99F.9 the statewide telephone
19number authorized by the Iowa department of public health to
20provide problem gambling information and extensive responsible
21gaming features in addition to those described in section
2299F.4, subsection 22.
23b. Establish, subject to commission approval, sports betting
24wagering rules that specify the amounts to be paid on winning
25sports betting wagers, the effect of changes in the scheduling
26of an authorized sporting event subject to sports betting, and
27the source of the information used to determine the outcome
28of a sports betting wager. The sports betting wagering rules
29shall be displayed in the licensee’s sports betting wagering
30area, posted on the internet site or mobile application used by
31the licensee to conduct advance deposit sports betting wagering
32as authorized in section 99F.9, and included in the terms and
33conditions of the licensee’s advance deposit account sports
34betting wagering system.
353. A licensee issued a license to conduct sports betting
-6-1under this section shall employ commercially reasonable steps
2to prohibit coaches, athletic trainers, officials, players, or
3other individuals who participate in an authorized sporting
4event that is the subject of sports betting from sports betting
5under this chapter. In addition, a licensee shall employ
6commercially reasonable steps to prohibit persons who are
7employed in a position with direct involvement with coaches,
8players, athletic trainers, officials, players, or participants
9in an authorized sporting event that is the subject of sports
10betting from sports betting under this chapter.
11 Sec. 10. Section 99F.8, Code 2019, is amended to read as
12follows:
1399F.8 Bond of licensee.
14A licensee licensed under section 99F.7 shall post a bond
15to the state of Iowa before the license is issued in a sum
16as the commission shall fix, with sureties to be approved by
17the commission. The bond shall be used to guarantee that the
18licensee faithfully makes the payments, keeps its books and
19records and makes reports, and conducts its gambling games and
20sports betting in conformity with this chapter and the rules
21adopted by the commission. The bond shall not be canceled by
22a surety on less than thirty days’ notice in writing to the
23commission. If a bond is canceled and the licensee fails to
24file a new bond with the commission in the required amount on
25or before the effective date of cancellation, the licensee’s
26license shall be revoked. The total and aggregate liability
27of the surety on the bond is limited to the amount specified in
28the bond.
29 Sec. 11. Section 99F.9, subsection 1, Code 2019, is amended
30to read as follows:
311. Except as permitted in this section, the licensee
32shall not permit no sports betting or any form of wagering on
33gambling games.
34 Sec. 12. Section 99F.9, Code 2019, is amended by adding the
35following new subsection:
-7-1 NEW SUBSECTION. 3A. a. For the purposes of this section,
2unless the context otherwise requires:
3(1) “Advance deposit sports betting wagering” means a method
4of sports betting in which an eligible individual may, in an
5account established with a licensee under section 99F.7A,
6deposit moneys into the account and use the account balance to
7pay for sports betting. Prior to January 1, 2021, an account
8must be established by an eligible individual in person with
9a licensee.
10(2) “Advance deposit sports betting wagering operator” means
11an advance deposit sports betting wagering operator licensed
12by the commission who has entered into an agreement with a
13licensee under section 99F.7A to provide advance deposit sports
14betting wagering.
15(3) “Eligible individual” means an individual who is at
16least twenty-one years of age or older who is located within
17this state.
18b. The commission may authorize a licensee under section
1999F.7A to conduct advance deposit sports betting wagering. An
20advance deposit sports betting wager may be placed in person
21in the sports wagering area, or from any other location via
22a telephone-type device or any other electronic means. The
23commission may also issue an advance deposit sports betting
24wagering operator license to an entity who complies with this
25subsection and section 99F.6 and may require the advance
26deposit sports wagering operator to conduct an audit consistent
27with the requirements of section 99F.13.
28 Sec. 13. Section 99F.9, subsection 4, Code 2019, is amended
29to read as follows:
304. A person under the age of twenty-one years shall not make
31or attempt to make a wager pursuant to subsection 3A or on an
32excursion gambling boat, gambling structure, or in a racetrack
33enclosure and shall not be allowed on the gaming floor of
34an excursion gambling boat or gambling structure or in the
35wagering area, as defined in section 99D.2, or on the gaming
-8-1floor of a racetrack enclosure. However, a person eighteen
2years of age or older may be employed to work on the gaming
3floor of an excursion gambling boat or gambling structure or
4in the wagering area or on the gaming floor of a racetrack
5enclosure. A person who violates this subsection with respect
6to making or attempting to make a wager commits a scheduled
7violation under section 805.8C, subsection 5, paragraph “a”.
8 Sec. 14. Section 99F.11, subsection 3, unnumbered paragraph
91, Code 2019, is amended to read as follows:
10The taxes imposed by this section on adjusted gross receipts
11from gambling games authorized under this chapter shall be paid
12by the licensee to the treasurer of state within ten days after
13the close of the day when the wagers were made and shall be
14distributed as follows:
15 Sec. 15. Section 99F.11, Code 2019, is amended by adding the
16following new subsection:
17 NEW SUBSECTION. 4. a. A tax is imposed on the sports
18betting net receipts received each fiscal year by a licensed
19operator from sports betting authorized under this chapter at
20the rate of six and three-quarters percent.
21b. The taxes imposed by this subsection for sports betting
22authorized under this chapter shall be paid by the licensed
23operator to the treasurer of state as determined by the
24commission and shall be distributed as follows:
25(1) An amount equal to one-fourth of one percent of sports
26betting net receipts is appropriated to the Iowa department of
27public health for purposes of the gambling treatment program
28established in section 135.150.
29(2) The remaining amount of sports betting net receipts
30taxes imposed pursuant to this subsection shall be credited as
31provided in section 8.57, subsection 5.
32 Sec. 16. Section 99F.12, subsection 2, Code 2019, is amended
33to read as follows:
342. a. The licensee shall furnish to the commission reports
35and information as the commission may require with respect to
-9-1the licensee’s activities.
2b. A licensee under section 99F.7A shall promptly report
3to the commission any criminal or disciplinary proceedings
4commenced against the licensee or its employees in connection
5with the licensee conducting sports betting including advance
6deposit sports betting wagering, any abnormal wagering activity
7or patterns that may indicate a concern about the integrity
8of an authorized sporting event or events, and any other
9conduct with the potential to corrupt a wagering outcome of
10an authorized sporting event for purposes of financial gain,
11including but not limited to match fixing, and suspicious or
12illegal wagering activities, including the use of funds derived
13from illegal activity, wagers to conceal or launder funds
14derived from illegal activity, use of agents to place wagers,
15or use of false identification. The commission is required
16to share any information received pursuant to this paragraph
17with the division of criminal investigation, any other law
18enforcement entity upon request, or any regulatory agency the
19commission deems appropriate. The commission may also share
20any information received pursuant to this paragraph with any
21sports team or sports governing body as the commission deems
22appropriate, but shall not share any information that would
23interfere with an ongoing criminal investigation.
24c. The gross receipts and adjusted gross receipts from
25gambling shall be separately handled and accounted for from
26all other moneys received from operation of an excursion
27gambling boat or from operation of a racetrack enclosure or
28gambling structure licensed to conduct gambling games. The
29commission may designate a representative to board a licensed
30excursion gambling boat or to enter a racetrack enclosure or
31gambling structure licensed to conduct gambling games. The
32representative shall have full access to all places within the
33enclosure of the boat, the gambling structure, or the racetrack
34enclosure and shall directly supervise the handling and
35accounting of all gross receipts and adjusted gross receipts
-10-1from gambling. The representative shall supervise and check
2the admissions. The compensation of a representative shall be
3fixed by the commission but shall be paid by the licensee.
4 Sec. 17. Section 99F.15, subsection 1, paragraph c, Code
52019, is amended to read as follows:
6c. Acting, or employing a person to act, as a shill or
7decoy to encourage participation in a gambling game or sports
8betting.
9 Sec. 18. Section 99F.15, subsection 4, paragraphs d, h, and
10i, Code 2019, are amended to read as follows:
11d. Cheats at a gambling game, including but not limited to
12committing any act which alters the outcome of the game, or
13cheats at sports betting.
14h. Claims, collects, or takes, or attempts to claim,
15collect, or take, money or anything of value in or from the
16gambling games or sports betting, with intent to defraud,
17without having made a wager contingent on winning a gambling
18game or sports betting wager, or claims, collects, or takes an
19amount of money or thing of value of greater value than the
20amount won.
21i. Knowingly entices or induces a person to go to any place
22where a gambling game or sports betting is being conducted or
23operated in violation of the provisions of this chapter with
24the intent that the other person plays or participates in that
25gambling game or sports betting.
26 Sec. 19. Section 99F.20, subsection 1, Code 2019, is amended
27to read as follows:
281. A gaming regulatory revolving fund is created in
29the state treasury under the control of the department of
30inspections and appeals. The fund shall consist of fees
31collected and deposited into the fund paid by licensees
32pursuant to section 99D.14, subsection 2, paragraph “c”, fees
33paid by licensees pursuant to section 99E.5, subsection 4,
34paragraph “c”, regulatory fees paid by licensees pursuant
35to section 99F.4, subsection 27, and fees paid by licensees
-11-1pursuant to section 99F.10, subsection 4, paragraph “c”. All
2costs relating to racetrack, excursion boat, and gambling
3structure regulation shall be paid from the fund as provided in
4appropriations made for this purpose by the general assembly.
5The department shall provide quarterly reports to the
6department of management and the legislative services agency
7specifying revenues billed and collected and expenditures
8from the fund in a format as determined by the department
9of management in consultation with the legislative services
10agency.
11 Sec. 20. EMERGENCY RULES. The state racing and gaming
12commission created under section 99D.5 may adopt emergency
13rules under section 17A.4, subsection 3, and section 17A.5,
14subsection 2, paragraph “b”, to implement the provisions of
15this division of this Act and the rules shall be effective
16immediately upon filing unless a later date is specified in the
17rules. Any rules adopted in accordance with this section shall
18also be published as a notice of intended action as provided
19in section 17A.4.
20 Sec. 21. IMPLEMENTATION. The racing and gaming commission
21shall not implement this division of this Act until the date
22the commission has adopted rules pursuant to chapter 17A
23providing for such implementation and such rules have become
24effective.
25 Sec. 22. EFFECTIVE DATE. This division of this Act, being
26deemed of immediate importance, takes effect upon enactment.
27DIVISION II
28INTERNET FANTASY SPORTS CONTESTS
29 Sec. 23. Section 80.25A, Code 2019, is amended to read as
30follows:
3180.25A Pari-mutuel and gambling game Gaming operations —
32investigation and enforcement.
33The commissioner of public safety shall direct the chief
34of the division of criminal investigation to establish a
35subdivision to be the primary criminal investigative and
-12-1enforcement agency for the purpose of enforcement of chapters
299D, 99E, and 99F. The commissioner of public safety shall
3appoint or assign other agents to the division as necessary to
4enforce chapters 99D, 99E, and 99F. All enforcement officers,
5assistants, and agents of the division are subject to section
680.15 except clerical workers.
7 Sec. 24. NEW SECTION. 99E.1 Definitions.
8As used in this chapter, unless the context otherwise
9requires:
101. “Applicant” means an internet fantasy sports contest
11service provider applying for a license to conduct internet
12fantasy sports contests under this chapter.
132. “Commission” means the state racing and gaming commission
14created under section 99D.5.
153. “Fantasy sports contest” includes any fantasy or
16simulated game or contest in which the fantasy sports contest
17operator is not a participant in the game or contest, the value
18of all prizes and awards offered to winning participants are
19established and made known to the participants in advance
20of the contest, all winning outcomes reflect the relative
21knowledge and skill of the participants and shall be determined
22by accumulated statistical results of the performance of
23individuals, including athletes in the case of sporting events,
24and no winning outcome is based on the score, point spread, or
25any performance or performances of any single actual team or
26solely on any single performance of an individual athlete or
27player in any single actual event.
284. “Internet fantasy sports contest” means a method of
29entering a fantasy sports contest by which a person may
30establish an account with an internet fantasy sports contest
31service provider, deposit money into the account, and use
32the account balance for entering a fantasy sports contest by
33utilizing electronic communication.
345. “Internet fantasy sports contest adjusted revenues” means,
35for each internet fantasy sports contest, the amount equal to
-13-1the total charges and fees collected from all participants
2entering the internet fantasy sports contest less winnings paid
3to participants in the contest, multiplied by the location
4percentage.
56. “Internet fantasy sports contest player” means a person
6who is at least twenty-one years of age and participates in an
7internet fantasy sports contest operated by an internet fantasy
8sports contest service provider.
97. “Internet fantasy sports contest service provider” means
10a person, including a licensee under chapter 99D or 99F, who
11conducts an internet fantasy sports contest as authorized by
12this chapter.
138. “Licensee” means any person licensed under section 99E.5
14to conduct internet fantasy sports contests.
159. “Location percentage” means, for each internet fantasy
16sports contest, the percentage, rounded to the nearest tenth of
17a percent, equal to the total charges and fees collected from
18all internet fantasy sports contest players located in this
19state divided by the total charges and fees collected from all
20participants in the internet fantasy sports contest.
21 Sec. 25. NEW SECTION. 99E.2 Internet fantasy sports
22contests authorized.
23The system of entering an internet fantasy sports contest as
24provided by this chapter is legal when conducted by a licensed
25internet fantasy sports contest service provider as provided in
26this chapter.
27 Sec. 26. NEW SECTION. 99E.3 Commission — powers.
281. The commission shall have full jurisdiction over and
29shall supervise internet fantasy sports contests and internet
30fantasy sports contest service providers as governed by this
31chapter.
322. The commission shall have the following powers and shall
33adopt rules pursuant to chapter 17A to administer and implement
34this chapter:
35a. To review and investigate applicants and determine the
-14-1eligibility of applicants for a license to conduct internet
2fantasy sports contests, pursuant to rules adopted by the
3commission.
4b. To license and regulate internet fantasy sports contest
5service providers subject to the requirements of this chapter.
6c. To provide for the prevention of practices detrimental to
7the public and to provide for the best interests of internet
8fantasy sports contests.
9d. To investigate alleged violations of this chapter
10or the commission rules, orders, or final decisions and to
11take appropriate disciplinary action against a licensee, or
12institute appropriate legal action for enforcement, or both.
13Information gathered during an investigation is confidential
14during the pendency of the investigation.
15e. To assess fines and revoke or suspend licenses and to
16impose penalties for violations of this chapter.
17f. To take any other action as may be reasonable or
18appropriate to enforce this chapter and the commission rules.
19 Sec. 27. NEW SECTION. 99E.4 Requirements of applicant —
20fee.
211. An applicant for a license to conduct internet fantasy
22sports contests shall complete and sign an application on
23the form prescribed and published by the commission. The
24application shall include such information of the applicant
25that the commission deems necessary for purposes of issuing a
26license pursuant to this chapter.
272. An applicant shall submit fingerprints and information
28that the commission deems necessary to the commission in the
29manner prescribed on the application forms. The fingerprints
30may be submitted to the federal bureau of investigation by
31the department of public safety through the state criminal
32history repository for the purpose of a national criminal
33history check. The results of a criminal history record check
34conducted pursuant to this subsection shall be considered a
35confidential record under chapter 22.
-15- 13. Before a license is granted, the division of criminal
2investigation of the department of public safety shall conduct
3a thorough background investigation of the applicant for a
4license to conduct internet fantasy sports contests. The
5applicant shall provide information on a form as required by
6the division of criminal investigation.
74. The commission shall charge the applicant a reasonable
8fee set by the division of criminal investigation of the
9department of public safety, to defray those costs associated
10with the fingerprint and national criminal history check
11requirements of subsection 2 and background investigations
12conducted by agents of the division of criminal investigation
13as provided in subsection 3. These fees and costs are in
14addition to any other license fees and costs charged by the
15commission.
165. The commission shall not grant a license to an applicant
17if there is substantial evidence that any of the following
18apply:
19a. A license issued to the applicant to conduct internet
20fantasy sports contests in another jurisdiction has been
21revoked, or a request for a license to conduct internet fantasy
22sports contests in another jurisdiction has been denied, by
23an entity licensing persons to conduct such contests in that
24jurisdiction.
25b. The applicant has not demonstrated financial
26responsibility sufficient to adequately meet the requirements
27of the enterprise proposed.
28c. The applicant does not adequately disclose the true
29owners of the enterprise proposed.
30d. The applicant has knowingly made a false statement of a
31material fact to the commission.
32e. The applicant has failed to meet a monetary obligation in
33connection with conducting an internet fantasy sports contest.
34f. The applicant is not of good repute and moral character
35or the applicant has pled guilty to, or has been convicted of,
-16-1a felony.
2g. Any member of the board of directors of the applicant is
3not twenty-one years of age or older.
46. A person who knowingly makes a false statement on the
5application is guilty of an aggravated misdemeanor.
67. For the purposes of this section, “applicant” includes
7each member of the board of directors of an internet fantasy
8sports contest service provider.
9 Sec. 28. NEW SECTION. 99E.5 Licenses — fees — terms and
10conditions — revocation.
111. If the commission is satisfied that the requirements
12of this chapter and its rules adopted under this chapter
13applicable to licensees have been or will be complied with, the
14commission shall, upon payment of an initial annual license
15fee of five thousand dollars, issue a license for a period of
16not more than three years to an applicant to conduct internet
17fantasy sports contests in this state.
182. A licensed internet fantasy sports contest service
19provider shall use commercially reasonable methods to comply
20with all of the following requirements:
21a. Prevent employees of the internet fantasy sports contest
22service provider and relatives living in the same household of
23such employees from competing in any internet fantasy sports
24contest on the service provider’s digital platform in which the
25service provider offers a cash prize to the public.
26b. Verify that an internet fantasy sports contest player
27located in this state is twenty-one years of age or older.
28c. Ensure that coaches, officials, players, contestants,
29or other individuals who participate in a game or contest
30that is the subject of an internet fantasy sports contest are
31restricted from entering an internet fantasy sports contest in
32which the outcome is determined, in whole or in part, by the
33accumulated statistical results of a team of individuals in the
34game or contest in which they participate.
35d. Allow individuals to restrict themselves from entering
-17-1an internet fantasy sports contest conducted by the internet
2fantasy sports contest service provider upon request and take
3reasonable steps to prevent those individuals from entering
4any internet fantasy sports contests conducted by the internet
5fantasy sports contest service provider.
6e. Allow individuals to establish an account with an
7internet fantasy sports contest service provider by utilizing
8electronic communication.
9f. Disclose the number of entries a single internet fantasy
10sports contest player may submit to each internet fantasy
11sports contest and take reasonable steps to prevent players
12from submitting more than the allowable number of entries for
13that internet fantasy sports contest.
14g. Segregate internet fantasy sports contest player funds
15from operational funds or maintain a reserve in the form of
16cash, cash equivalents, an irrevocable letter of credit,
17payment processor reserves and receivables, a bond, or a
18combination thereof in the amount of the deposits in internet
19fantasy sports contest player accounts for the benefit and
20protection of internet fantasy sports contest player funds held
21in internet fantasy sports contest accounts by the internet
22fantasy sports contest service provider.
23h. Conduct an annual audit under section 99E.9.
24i. Pay the tax as provided in section 99E.6.
253. The annual renewal fee for a license to conduct internet
26fantasy sports contests shall be five thousand dollars. Moneys
27collected by the commission from the annual renewal fee for
28a license paid under this subsection shall be considered
29repayment receipts as defined in section 8.2.
304. a. A licensed internet fantasy sports contest service
31provider shall pay a regulatory fee to the commission. The
32regulatory fee shall be established by the commission based on
33the costs of administering and enforcing this chapter.
34b. A licensed internet fantasy sports contest service
35provider shall receive a credit for the amount of the license
-18-1and regulatory fee paid by the provider against the taxes to be
2paid pursuant to section 99E.6.
3c. Notwithstanding section 8.60, the portion of the fee
4paid pursuant to paragraph “a” relating to the costs of the
5commission shall be deposited into the gaming regulatory
6revolving fund established in section 99F.20.
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. 29. NEW SECTION. 99E.6 Internet fantasy sports contest
11tax — rate.
121. A tax is imposed on internet fantasy sports contest
13adjusted revenues received each fiscal year by an internet
14fantasy sports contest service provider from internet fantasy
15sports contests authorized under this chapter at the rate of
16six and three-quarters percent.
172. The taxes imposed by this section for internet fantasy
18sports contests authorized under this chapter shall be paid by
19the internet fantasy sports contest service provider to the
20treasurer of state as determined by the commission and shall be
21distributed as follows:
22a. An amount equal to one-fourth of one percent of internet
23fantasy sports contest adjusted revenues is appropriated to the
24Iowa department of public health for purposes of the gambling
25treatment program established in section 135.150.
26b. The remaining amount of internet fantasy sports contest
27adjusted revenues taxes imposed pursuant to this section shall
28be credited as provided in section 8.57, subsection 5.
29 Sec. 30. NEW SECTION. 99E.7 Internet fantasy sports
30contests — age restrictions.
31A person under the age of twenty-one years shall not enter an
32internet fantasy sports contest. A person who violates this
33section with respect to entering an internet fantasy sports
34contest commits a scheduled violation under section 805.8C,
35subsection 12.
-19-1 Sec. 31. NEW SECTION. 99E.8 Licensees — records — reports
2— confidentiality.
31. An internet fantasy sports contest service provider
4shall keep its books and records so as to clearly show the
5internet fantasy sports contest adjusted revenues for each
6internet fantasy sports contest subject to tax in this state.
72. a. The licensee shall furnish to the commission reports
8and information as the commission may require with respect to
9the licensee’s activities.
10b. A licensee shall promptly report to the commission any
11criminal or disciplinary proceedings commenced against the
12licensee or its employees in connection with the licensee
13conducting an internet fantasy sports contest, any abnormal
14contest activity or patterns that may indicate a concern about
15the integrity of an internet fantasy sports contest, and any
16other conduct with the potential to corrupt an outcome of an
17internet fantasy sports contest for purposes of financial gain,
18including but not limited to match fixing, and suspicious or
19illegal internet fantasy sports contest activities, including
20the use of funds derived from illegal activity, deposits
21of money to enter an internet fantasy sports contest to
22conceal or launder funds derived from illegal activity, use
23of agents to enter an internet fantasy sports contest, or
24use of false identification. The commission is authorized
25to share any information received pursuant to this paragraph
26with the division of criminal investigation, any other law
27enforcement entity upon request, or any regulatory agency the
28commission deems appropriate. The commission may also share
29any information received pursuant to this paragraph with any
30sports team or sports governing body as the commission deems
31appropriate, but shall not share any information that would
32interfere with an ongoing criminal investigation.
333. Except as provided in subsection 4, the books and records
34kept by a licensee as provided by this section are public
35records and the examination, publication, and dissemination of
-20-1the books and records are governed by the provisions of chapter
222.
34. The records of the commission shall be governed by the
4provisions of chapter 22, provided that, in addition to records
5that may be kept confidential pursuant to section 22.7, the
6following records provided by a licensee to the commission
7shall be kept confidential, unless otherwise ordered by a
8court, by the lawful custodian of the records, or by another
9person duly authorized to release such information:
10a. Patron and customer records.
11b. Security reports and network audits.
12c. Internal control and compliance records.
13d. Employee records.
14e. Marketing expenses.
15f. Supplemental schedules to the certified audit, except for
16those books and records as described in subsection 1 of this
17section, that are obtained by the commission in connection with
18the annual audit under section 99E.9.
19g. Any information specifically requested for inspection by
20the commission or a representative of the commission.
21 Sec. 32. NEW SECTION. 99E.9 Annual audit of licensee
22operations.
23Within ninety days after the end of the licensee’s fiscal
24year, the licensee shall transmit to the commission an audit
25of the licensee’s total internet fantasy sports contest
26operations, including an itemization of all expenses and
27subsidies. Each audit shall be conducted by a certified public
28accountant authorized to practice in the state of Iowa under
29chapter 542 who is selected by the licensee and approved by the
30commission.
31 Sec. 33. NEW SECTION. 99E.10 Civil penalty.
32A person who willfully fails to comply with the requirements
33of this chapter and the rules adopted pursuant to chapter 17A
34under this chapter shall be liable for a civil penalty of
35not more than one thousand dollars for each violation, not
-21-1to exceed ten thousand dollars for violations arising out of
2the same transaction or occurrence, which shall accrue to the
3state and may be recovered in a civil action brought by the
4commission.
5 Sec. 34. Section 99F.2, Code 2019, is amended to read as
6follows:
799F.2 Scope of provisions.
8This chapter does not apply to the pari-mutuel system of
9wagering used or intended to be used in connection with the
10horse-race or dog-race meetings as authorized under chapter
1199D, internet fantasy sports contests authorized under chapter
1299E, lottery or lotto games authorized under chapter 99G, or
13bingo or games of skill or chance authorized under chapter 99B.
14 Sec. 35. Section 99F.4B, Code 2019, is amended to read as
15follows:
1699F.4B Rules.
17The department of inspections and appeals shall cooperate
18to the maximum extent possible with the division of criminal
19investigation in adopting rules relating to the gaming
20operations in this chapter and chapter chapters 99D and 99E.
21 Sec. 36. Section 232C.4, subsection 3, Code 2019, is amended
22to read as follows:
233. An emancipated minor shall remain subject to voting
24restrictions under chapter 48A, gambling restrictions under
25chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
26contest restrictions under chapter 99E, alcohol restrictions
27under chapter 123, compulsory attendance requirements under
28chapter 299, and cigarette tobacco restrictions under chapter
29453A.
30 Sec. 37. Section 714B.10, subsection 1, Code 2019, is
31amended to read as follows:
321. Advertising by sponsors registered pursuant to chapter
33557B, licensed pursuant to chapter 99B, or regulated pursuant
34to chapter 99D, 99E, 99F, or 99G.
35 Sec. 38. Section 725.15, Code 2019, is amended to read as
-22-1follows:
2725.15 Exceptions for legal gambling.
3Sections 725.5 through 725.10 and 725.12 do not apply to
4a game, activity, ticket, or device when lawfully possessed,
5used, conducted, or participated in pursuant to chapter 99B,
699E, 99F, or 99G.
7 Sec. 39. Section 805.8C, Code 2019, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 12. Internet fantasy sports contest
10violations. For violations of legal age for entering an
11internet fantasy sports contest under section 99E.7, the
12scheduled fine is five hundred dollars. Failure to pay the
13fine by a person under the age of eighteen shall not result in
14the person being detained in a secure facility.
15 Sec. 40. TRANSITIONAL LICENSE. Notwithstanding any
16provisions of chapter 99E as enacted by this Act to the
17contrary, a person granted a license or registration by two or
18more states to conduct internet fantasy sports contests may
19apply for and shall be granted a transitional license by the
20racing and gaming commission to conduct internet fantasy sports
21contests in this state subject to the requirements of chapter
2299E, as enacted by this Act. The transitional license shall
23be valid until the earlier of the date the racing and gaming
24commission grants or denies a license under section 99E.5 to
25the person to conduct internet fantasy sports contests, or
26twelve months from the date the racing and gaming commission
27accepts applications for issuance of a license to conduct
28internet fantasy sports contests under section 99E.5.
29 Sec. 41. EMERGENCY RULES. The state racing and gaming
30commission created under section 99D.5 may adopt emergency
31rules under section 17A.4, subsection 3, and section 17A.5,
32subsection 2, paragraph “b”, to implement the provisions of
33this division of this Act and the rules shall be effective
34immediately upon filing unless a later date is specified in the
35rules. Any rules adopted in accordance with this section shall
-23-1also be published as a notice of intended action as provided
2in section 17A.4.
3 Sec. 42. IMPLEMENTATION. The racing and gaming commission
4shall not implement this division of this Act until the date
5the commission has adopted rules pursuant to chapter 17A
6providing for such implementation and such rules have become
7effective.
8 Sec. 43. EFFECTIVE DATE. This division of this Act, being
9deemed of immediate importance, takes effect upon enactment.
10DIVISION III
11GAMBLING REGULATION
12 Sec. 44. Section 99B.41, Code 2019, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 1A. “Social fantasy sports contest” means
15any fantasy or simulated game or contest in which the value
16of all prizes and awards offered to winning participants are
17established and made known to the participants in advance of
18the contest and do not exceed a total of one thousand dollars
19or equivalent consideration, all winning outcomes reflect
20the relative knowledge and skill of the participants and
21shall be determined by accumulated statistical results of
22the performance of individuals in events occurring over more
23than a twenty-four-hour period, including athletes in the case
24of sporting events, and no winning outcome is based on the
25score, point spread, or any performance or performances of
26any single actual team or solely on any single performance of
27an individual athlete or player in any single actual event.
28“Social fantasy sports contest” does not include an internet
29fantasy sports contest as defined in section 99E.1.
30 Sec. 45. Section 99B.45, subsection 2, Code 2019, is amended
31by adding the following new paragraph:
32 NEW PARAGRAPH. c. A social fantasy sports contest.
33 Sec. 46. Section 99D.7, subsection 5, paragraph c,
34subparagraphs (2) and (3), Code 2019, are amended to read as
35follows:
-24- 1(2) Of the purse moneys designated for thoroughbred
2racing, two percent shall be distributed to an organization
3representing owners of thoroughbred race horses for the
4purpose purposes of paying the annual operating expenses of the
5organization, and for the promotion and marketing of Iowa-bred
6horses, benevolence, thoroughbred aftercare, breeder promotions
7and awards, and improvements to the horse racetrack in Polk
8county. The organization receiving such purse moneys shall
9complete and provide to the commission an annual audit and
10accounting of the allocation of such moneys.
11(3) Of the purse moneys designated for quarter horse
12racing, two percent shall be distributed to an organization
13representing owners of quarter horse race horses for the
14purpose purposes of paying the annual operating expenses of
15the organization, and for the promotion and marketing of
16Iowa-bred horses, benevolence, quarter horse aftercare, breeder
17promotions and awards, and improvements to the horse racetrack
18in Polk county. The organization receiving such purse moneys
19shall complete and provide to the commission an annual audit
20and accounting of the allocation of such moneys.
21 Sec. 47. Section 99D.11, subsection 6, paragraph c,
22subparagraph (4), Code 2019, is amended by striking the
23subparagraph.
24EXPLANATION
25The inclusion of this explanation does not constitute agreement with
26the explanation’s substance by the members of the general assembly.
27This bill authorizes sports gambling and wagering, including
28sports betting and fantasy sports contests.
29LICENSED SPORTS BETTING. This division authorizes and
30licenses sports betting.
31Code section 99F.1, concerning definitions, is amended. The
32bill defines “sports betting” as wagering on an authorized
33sporting event by any system of wagering as authorized by the
34racing and gaming commission (commission). “Sports betting”
35is further defined to exclude wagering on the performance of
-25-1an athlete participating in a collegiate sporting event that
2includes a collegiate team from this state or in an individual
3olympic event in which any athlete is under eighteen years of
4age, horse racing, and internet fantasy sports contests. An
5“authorized sporting event” is defined to include professional
6and collegiate sporting events and international team and
7individual sporting events governed by the international
8olympic committee. The definition of “licensee” is amended to
9include a person licensed to conduct sports betting. The bill
10defines “sports betting net receipts” as gross receipts less
11winnings paid to wagerers on sports betting. “Sports betting
12wagering area” is defined as an area, as designated by the
13commission, in which sports betting is conducted.
14Code sections 99D.7(23) and 99F.4(22), concerning persons
15voluntarily excluded from wagering or gaming areas, are amended
16to include internet fantasy sports contests, advance deposits
17wagering, advance deposit sports betting wagering, and the
18sports betting wagering area.
19Code section 99F.3, concerning authorized wagering under
20Code chapter 99F, is amended to authorize sports betting.
21Code section 99F.4, concerning racing and gaming commission
22powers, is amended to authorize the operation of sports betting
23in a sports betting wagering area on an excursion gambling
24boat which is also licensed to serve alcoholic beverages and
25grants the racing and gaming commission the authority to adopt
26standards under which sports betting is conducted including
27the scope and type of wagers allowed. The bill provides that
28revenue received by the commission from license fees for sports
29betting shall be deposited in the general fund of the state
30and revenue received by the commission from regulatory fees
31shall be deposited into the gaming regulatory revolving fund
32established in Code section 99F.20.
33Code section 99F.6, concerning licensee applicants,
34is amended to provide that net receipts, for purposes of
35determining purse agreements for horse racing, include sports
-26-1betting net receipts.
2New Code section 99F.7A provides specific requirements
3relative to the licensing, operation, and fees applicable to
4sports betting.
5The bill provides that the commission shall, upon payment
6of an initial license fee of $15,000, issue a license to
7conduct sports betting to a licensee authorized to conduct
8gambling games at a pari-mutuel racetrack enclosure or a
9licensee authorized to operate an excursion gambling boat or
10gambling structure. The bill provides that the annual renewal
11fee for a license shall also be $15,000. The bill provides
12that a licensee establish, and display and post, sports
13betting wagering rules specifying the amounts to be paid on
14winning wagers, the effect of changes in the scheduling of an
15authorized sporting event, and the source of information used
16to determine the outcome of a wager. The new Code section also
17provides that a licensee shall include on the internet site
18or mobile application used by the licensee to conduct advance
19deposit sports betting wagering the statewide telephone number
20authorized by the Iowa department of public health to provide
21problem gambling information and extensive responsible gaming
22features. The bill also provides that a licensee issued a
23license to conduct sports betting shall employ commercially
24reasonable steps to prohibit coaches, athletic trainers,
25officials, players, participants, or other persons employed in
26a position with direct involvement with such individuals from
27sports betting under Code chapter 99F.
28Code section 99F.8, concerning licensee bonding
29requirements, is amended to make such requirements applicable
30to sports betting.
31Code section 99F.9, concerning wagering on gambling games,
32is amended to allow the commission to authorize gambling game
33licensees under Code chapter 99F to conduct advance deposit
34sports betting wagering. The bill also allows a licensee
35under Code section 99F.7A to enter into an agreement with an
-27-1advance deposit sports betting wagering operator licensed
2by the commission to provide advance deposit sports betting
3wagering for the licensee and allows the commission to require
4the advance deposit sports betting wagering operator to
5conduct an audit. The bill would allow for an advance deposit
6sports betting wager to be placed in person at a licensed
7facility authorized to conduct gambling games or from any other
8location by telephone or other electronic means. The bill
9defines “advance deposit sports betting wagering” as a form
10of wagering where an eligible individual creates an account
11with a licensee, deposits money into that account, and can
12use the balance within the account for sports betting. Prior
13to January 1, 2021, an account must be established in person
14with a licensee. The bill defines an “eligible individual”
15for purposes of advance deposit sports betting wagering as an
16individual 21 years of age or older who is located within this
17state. The Code section is also amended to provide that a
18person under the age of 21 shall not make or attempt to make a
19wager by advance deposit sports wagering.
20Code section 99F.11, concerning the wagering tax, is
21amended. The bill provides that sports betting net receipts
22received each fiscal year by a licensed operator from sports
23betting shall be taxed at the rate of six and three-quarters
24percent. The taxes imposed shall be paid by the licensed
25operator to the treasurer of state as determined by the
26commission. The bill provides that of the taxes collected, an
27amount equal to one-fourth of one percent of sports betting net
28receipts is appropriated to the department of public health
29for the gambling treatment program with the remainder of taxes
30collected to be credited as provided in Code section 8.57,
31subsection 5.
32Code section 99F.12, concerning certain required reports
33and records of licensees, is amended to provide that a sports
34betting licensee shall promptly report to the commission any
35criminal or disciplinary proceedings commenced against the
-28-1licensee, any abnormal sports wagering activity, and any other
2conduct with the potential to corrupt a wagering outcome of an
3authorized sporting event. The bill requires the commission to
4share any information received with the division of criminal
5investigation, any other law enforcement entity, or regulatory
6agency the commission deems appropriate. The commission may
7also share information with a sports team or sports governing
8body as the commission deems appropriate if it will not
9interfere with an ongoing criminal investigation.
10Code section 99F.15, concerning certain prohibited
11activities and penalties, is amended to provide that current
12prohibitions on cheating at a gambling game, claiming anything
13of value from a gambling game with intent to defraud, and
14knowingly enticing a person to go where a gambling game is
15conducted in violation of Code chapter 99F also applies to
16sports betting.
17Code section 99F.20, concerning the gaming regulatory
18revolving fund, is amended to provide that regulatory fees
19by an internet fantasy sports contest service provider and
20by a licensee authorized to conduct sports wagering shall be
21deposited in the fund.
22This division of the bill takes effect upon enactment.
23However, the bill authorizes the racing and gaming commission
24to adopt emergency rules to implement the bill and provides
25that the racing and gaming commission shall not implement
26this division of the bill until the date the commission has
27adopted rules pursuant to Code chapter 17A providing for such
28implementation and such rules have become effective.
29INTERNET FANTASY SPORTS CONTESTS. This division of the bill
30authorizes internet fantasy sports contests and provides for
31the licensing, regulation, and taxation of internet fantasy
32sports contests.
33Code section 80.25, concerning gaming investigation and
34enforcement by the division of criminal investigation of
35the department of public safety, is amended to provide for
-29-1investigation and enforcement concerning the new Code chapter.
2New Code section 99E.1 provides for definitions. A “fantasy
3sports contest” is defined as any fantasy or simulated game
4or contest in which all prizes and awards offered to winning
5participants are established and made known in advance of the
6contest, all winning outcomes reflect the relative knowledge
7and skill of the participants and are determined predominantly
8by accumulated statistical results of the performance of
9individuals, and no winning outcome is based on the score, or
10performance of any single actual team or combination of such
11teams or solely on any single performance of an individual
12athlete in any single actual sporting or other event. An
13“internet fantasy sports contest” is defined as a method of
14entering a fantasy sports contest by establishing an account
15with an internet fantasy sports contest service provider. An
16“internet fantasy sports contest player” is defined as a person
17who is at least 21 years of age who participates in an internet
18fantasy sports contest. The bill also defines “internet
19fantasy sports contest adjusted revenues”, “internet fantasy
20sports contest service provider”, “licensee”, and “location
21percentage”.
22New Code section 99E.2 provides that the system of entering
23an internet fantasy sports contest is legal when conducted by a
24licensed internet fantasy sports contest service provider as
25provided in the new Code chapter.
26New Code section 99E.3 establishes the powers of the racing
27and gaming commission in relation to internet fantasy sports
28contests and internet fantasy sports contest service providers.
29Specifically, the Code section authorizes the commission
30to investigate and license internet fantasy sports contest
31service providers, assess fines and revoke or suspend licenses,
32impose penalties for violations of the Code chapter, and take
33any other action to enforce the requirements of the new Code
34chapter.
35New Code section 99E.4 establishes the requirements for an
-30-1applicant to be granted a license to conduct internet fantasy
2sports contests. The Code section allows the commission
3to charge the applicant a fee for the department of public
4safety, division of criminal investigation, to defray the
5costs associated with any investigation. The new Code
6section provides that a license shall not be issued if there
7is evidence that the applicant has failed to meet certain
8qualifying requirements. The Code section provides that a
9person who knowingly makes a false statement on the application
10is guilty of an aggravated misdemeanor.
11New Code section 99E.5 establishes the terms and conditions
12of licenses issued to conduct internet fantasy sports contests.
13The Code section provides that a license may be issued for
14a period of not more than three years and provides for an
15initial and annual license fee of $5,000. The Code section
16also provides for the payment of a regulatory fee to be set
17by the racing and gaming commission based on the costs of
18administering and enforcing the new Code chapter. The Code
19section further provides that each licensee shall receive a
20credit for the amount of the license and regulatory fee paid
21against taxes to be paid pursuant to the new Code chapter. The
22Code section provides that a licensed internet fantasy sports
23contest service provider shall use commercially reasonable
24methods to prevent any employees and certain family members
25from participating in internet fantasy sports contests on the
26service provider’s digital platform, verify that internet
27fantasy sports contest players located in this state are 21
28or older, ensure that participants in a game or contest shall
29not be allowed to enter an internet fantasy sports contest
30involving that game or contest, permit individuals to establish
31an account with an internet fantasy sports contest service
32provider by electronic communication and to restrict themselves
33from entering an internet fantasy sports contest, conduct an
34annual audit, and pay the tax imposed by the new Code chapter.
35New Code section 99E.6 provides for a tax of six and
-31-1three-quarters percent on internet fantasy sports contest
2adjusted revenues. The bill defines “internet fantasy sports
3contest adjusted revenues” as the total of fees and charges
4collected, less winnings, in an internet fantasy sports
5contest multiplied by the percentage of fees and charges
6paid by participants who are located in this state in that
7contest. The taxes imposed shall be paid by the internet
8fantasy sports contest service provider to the treasurer of
9state as determined by the commission. The bill provides
10that of the taxes collected, an amount equal to one-fourth
11of one percent of internet fantasy sports contest adjusted
12revenues is appropriated to the department of public health
13for the gambling treatment program with the remainder of taxes
14collected to be credited as provided in Code section 8.57,
15subsection 5.
16New Code section 99E.7 provides that a person under the
17age of 21 shall not enter an internet fantasy sports contest.
18A person who violates this Code section commits a scheduled
19violation under Code section 805.8C and is subject to a $500
20fine. Code section 805.8C is amended to reflect this violation
21and applicable fine.
22New Code section 99E.8 requires an internet fantasy sports
23contest service provider to keep books and records on internet
24fantasy sports contest adjusted revenues and to provide the
25commission reports and information as the commission may
26require. The bill provides that a licensee promptly report
27to the commission any criminal or disciplinary proceedings
28commenced against the licensee, any abnormal fantasy sports
29contest activity, and any other conduct with the potential to
30corrupt an outcome of an internet fantasy sports contest. The
31bill requires the commission to share any information received
32with the division of criminal investigation, any other law
33enforcement entity, or regulatory agency the commission deems
34appropriate. The commission may also share information with a
35sports team or sports governing body as the commission deems
-32-1appropriate if it will not interfere with an ongoing criminal
2investigation.
3New Code section 99E.9 requires a licensee to conduct an
4audit within 90 days after the end of the licensee’s fiscal
5year.
6New Code section 99E.10 establishes civil penalties. The
7new Code section provides that a person who willfully fails to
8comply with the requirements of this new Code chapter shall be
9liable for a civil penalty of not more than $1,000 for each
10violation, not to exceed $10,000 for violations arising out of
11the same transaction or occurrence.
12The bill also makes changes to Code sections 99F.2, 99F.4B,
13232C.4, 714B.10, and 725.15 to provide that provisions in those
14Code sections that list some or all Code chapters that govern
15lawful gambling also list the new Code chapter provided in this
16division of the bill.
17The bill provides for the issuance of a transitional license
18by the racing and gaming commission to a person to conduct
19internet fantasy sports contests in this state if the person
20has been granted a license or registration by two or more other
21states to conduct internet fantasy sports contests. The bill
22provides that the transitional license shall be valid until the
23earlier of the date the commission grants or denies a license
24to the person or 12 months from the date the commission accepts
25applications for issuance of a license.
26This division of the bill takes effect upon enactment.
27However, the bill authorizes the racing and gaming commission
28to adopt emergency rules to implement this division of the
29bill and provides that the racing and gaming commission shall
30not implement the bill until the date the commission has
31adopted rules pursuant to Code chapter 17A providing for such
32implementation and such rules have become effective.
33GAMBLING REGULATION. This division makes several changes
34related to gambling regulation. Code section 99B.45,
35concerning social gambling between individuals, is amended to
-33-1authorize social gambling on social fantasy sports contests.
2Code section 99B.41 is amended to define “social fantasy sports
3contest” as a fantasy sports contest in which prizes and awards
4offered to winning participants do not exceed $1,000 and
5winning outcomes are based on the performance of individuals in
6events occurring over more than a 24-hour period. Current law
7limits wins or losses on social gambling to $200.
8Code section 99D.7(5), concerning the purse structure for
9horse racing, is amended to provide that of the percentage
10of purse money for thoroughbred racing and for quarter horse
11racing that is distributed to organizations representing owners
12of each of the two horse breeds, that percentage of purse
13moneys may also be used for benevolence, horse aftercare,
14breeder promotions and awards, and improvements to the horse
15racetrack in Polk county.
16Code section 99D.11, subsection 6, concerning criminal
17penalties, is amended to strike the specific criminal penalty
18relating to an unlicensed advance deposit wagering operator or
19an individual taking or receiving wagers from residents of this
20state that are not authorized by the Code chapter.
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