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House Study Bill 52 - IntroducedA Bill ForAn Act 1relating to fantasy sports contests, providing for a
2tax, making an appropriation, making penalties applicable,
3and including implementation provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 99E.1 Definitions.
2As used in this chapter, unless the context otherwise
3requires:
41. “Applicant” means an internet fantasy sports contest
5service provider applying for a license to conduct internet
6fantasy sports contests under this chapter.
72. “Commission” means the state racing and gaming commission
8created under section 99D.5.
93. “Fantasy sports contest” includes any fantasy or
10simulated game or contest in which the fantasy sports contest
11operator is not a participant in the game or contest, the value
12of all prizes and awards offered to winning participants are
13established and made known to the participants in advance
14of the contest, all winning outcomes reflect the relative
15knowledge and skill of the participants and shall be determined
16by accumulated statistical results of the performance of
17individuals, including athletes in the case of sporting events,
18in a fully completed game or contest, and no winning outcome
19is based on the score, point spread, or any performance or
20performances of any single actual team or solely on any single
21performance of an individual athlete or player in any single
22actual event. For purposes of this subsection, “fully completed
23game or contest” means the entirety of the game or contest, and
24not merely any portion thereof, and includes the entirety of a
25game or contest that has been suspended or shortened on account
26of weather or other natural or unforeseen event.
274. “Internet fantasy sports contest” means a method of
28entering a fantasy sports contest by which a person may
29establish an account with an internet fantasy sports contest
30service provider, deposit money into the account, and use
31the account balance for entering a fantasy sports contest by
32utilizing electronic communication.
335. “Internet fantasy sports contest adjusted revenues” means,
34for each internet fantasy sports contest, the amount equal to
35the total charges and fees collected from all participants
-1-1entering the internet fantasy sports contest less winnings paid
2to participants in the contest, multiplied by the location
3percentage.
46. “Internet fantasy sports contest player” means a person
5who is at least twenty-one years of age and participates in an
6internet fantasy sports contest operated by an internet fantasy
7sports contest service provider.
87. “Internet fantasy sports contest service provider” means
9a person, including a licensee under chapter 99D or 99F, who
10conducts an internet fantasy sports contest as authorized by
11this chapter.
128. “Location percentage” means, for each internet fantasy
13sports contest, the percentage, rounded to the nearest tenth of
14a percent, equal to the total charges and fees collected from
15all internet fantasy sports contest players located in this
16state divided by the total charges and fees collected from all
17participants in the internet fantasy sports contest.
18 Sec. 2. NEW SECTION. 99E.2 Internet fantasy sports contests
19authorized.
20The system of entering an internet fantasy sports contest as
21provided by this chapter is legal when conducted by a licensed
22internet fantasy sports contest service provider as provided in
23this chapter.
24 Sec. 3. NEW SECTION. 99E.3 Commission — powers.
25The commission shall have full jurisdiction over and shall
26supervise internet fantasy sports contests and internet fantasy
27sports contest service providers as governed by this chapter.
28The commission shall have the following powers and shall adopt
29rules pursuant to chapter 17A to implement this chapter:
301. To investigate applicants and determine the eligibility
31of applicants for a license to conduct internet fantasy sports
32contests.
332. To license and regulate internet fantasy sports contest
34service providers subject to the requirements of this chapter.
353. To investigate alleged violations of this chapter
-2-1or the commission rules, orders, or final decisions and to
2take appropriate disciplinary action against a licensee, or
3institute appropriate legal action for enforcement, or both.
4Information gathered during an investigation is confidential
5during the pendency of the investigation.
64. To assess fines and revoke or suspend licenses.
75. To require, beginning July 1, 2019, licensees to
8establish a process with the state for licensees to have
9electronic access to names and social security numbers of
10debtors of claimant agencies through a secured interactive
11internet site maintained by the state.
126. To take any other action as may be reasonable or
13appropriate to enforce this chapter and the commission rules.
14 Sec. 4. NEW SECTION. 99E.4 Requirements of applicant — fee
15— penalty.
161. An applicant for a license to conduct internet fantasy
17sports contests shall complete and sign an application on
18the form prescribed and published by the commission. The
19application shall include such information of the applicant
20that the commission deems necessary for purposes of issuing a
21license pursuant to this chapter.
222. An applicant shall submit fingerprints and information
23that the commission deems necessary to the commission in the
24manner prescribed on the application forms. The fingerprints
25may be submitted to the federal bureau of investigation by the
26department of public safety through the state criminal history
27repository for the purpose of a national criminal history
28check.
293. The commission shall charge the applicant a fee set
30by the department of public safety, division of criminal
31investigation, to defray the costs associated with any
32investigations conducted pursuant to the requirements of this
33section concerning the applicant. This fee is in addition
34to any other license fee charged by the commission. The fee
35may be retained by the department of public safety, division
-3-1of criminal investigation, and shall be considered repayment
2receipts as defined in section 8.2.
34. A license shall not be granted to an applicant if there
4is substantial evidence that any of the following apply:
5a. A license issued to the applicant to conduct internet
6fantasy sports contests in another jurisdiction has been
7revoked by an entity licensing persons to conduct such contests
8in that jurisdiction.
9b. The applicant has not demonstrated financial
10responsibility sufficient to adequately meet the requirements
11of the enterprise proposed.
12c. The applicant does not adequately disclose the true
13owners of the enterprise proposed.
14d. The applicant has knowingly made a false statement of a
15material fact to the commission.
16e. The applicant has failed to meet a monetary obligation in
17connection with conducting an internet fantasy sports contest.
18f. The applicant is not of good repute and moral character
19or the applicant has pled guilty to, or has been convicted of,
20a felony.
21g. Any member of the board of directors of the applicant is
22not twenty-one years of age or older.
235. A person who knowingly makes a false statement on the
24application is guilty of an aggravated misdemeanor.
256. For the purposes of this section, “applicant” includes
26each member of the board of directors of an internet fantasy
27sports contest service provider.
28 Sec. 5. NEW SECTION. 99E.5 Licenses — fees — terms and
29conditions — revocation.
301. If the commission is satisfied that the requirements
31of this chapter and its rules adopted under this chapter
32applicable to licensees have been or will be complied with, the
33commission shall issue a license for a period of not more than
34three years to an applicant to conduct internet fantasy sports
35contests in this state.
-4- 12. A licensed internet fantasy sports contest service
2provider shall comply with all of the following requirements:
3a. Prevent employees of the internet fantasy sports contest
4service provider and family members related within the second
5degree of affinity or consanguinity of such employees from
6competing in any internet fantasy sports contest conducted by
7any service provider in which the service provider offers a
8cash prize over five dollars.
9b. Verify that an internet fantasy sports contest player
10located in this state is twenty-one years of age or older.
11c. Ensure that coaches, officials, players, contestants,
12or other individuals who participate in a game or contest
13that is the subject of an internet fantasy sports contest are
14restricted from entering an internet fantasy sports contest in
15which the outcome is determined, in whole or in part, by the
16accumulated statistical results of a team of individuals in the
17game or contest in which they participate.
18d. Prohibit internet fantasy sports contests based upon any
19extracurricular interscholastic athletic contest or competition
20which is sponsored or administered by an organization as
21defined in section 280.13, any amateur athletic contest or
22competition in which all participants are under the age of
23twenty-one, or any intercollegiate sport as defined in section
249A.102.
25e. Allow individuals to restrict themselves from entering
26an internet fantasy sports contest conducted by the internet
27fantasy sports contest service provider upon request and take
28reasonable steps to prevent those individuals from entering
29any internet fantasy sports contests conducted by the internet
30fantasy sports contest service provider.
31f. Disclose the number of entries a single internet fantasy
32sports contest player may submit to each internet fantasy
33sports contest and take reasonable steps to prevent players
34from submitting more than the allowable number of entries for
35that internet fantasy sports contest.
-5- 1g. Segregate internet fantasy sports contest player funds
2from operational funds and maintain a reserve in the form
3of cash, cash equivalents, an irrevocable letter of credit,
4payment processor reserves and receivables, a bond, or a
5combination thereof in the amount of the deposits in internet
6fantasy sports contest player accounts for the benefit and
7protection of internet fantasy sports contest player funds held
8in internet fantasy sports contest accounts by the internet
9fantasy sports contest service provider.
10h. Annually contract with a third party to perform an
11independent audit, consistent with the standards established
12by the American institute of certified public accountants,
13to ensure compliance with all of the requirements in this
14chapter and submit the results of the independent audit to the
15commission.
16i. Pay the tax as provided in section 99E.6.
173. The annual license fee to conduct internet fantasy sports
18contests shall be five hundred dollars. Moneys collected by
19the commission from the annual license fee paid under this
20subsection shall be considered repayment receipts as defined
21in section 8.2.
224. Upon a violation of any of the conditions listed in
23section 99E.4 or this section by a licensee, the commission
24shall immediately revoke the license.
25 Sec. 6. NEW SECTION. 99E.6 Internet fantasy sports contest
26tax — rate — allocations.
271. A tax of seven and one-half percent is imposed on
28internet fantasy sports contest adjusted revenues. The tax
29imposed by this section shall be paid by the internet fantasy
30sports contest service provider to the commission as provided
31by the commission.
322. Of the revenues collected pursuant to this section, an
33amount equal to one-half of one percent of internet fantasy
34sports contest adjusted revenues is appropriated to the
35department of public health for purposes of the gambling
-6-1treatment program established pursuant to section 135.150. The
2remaining amount of the revenues collected pursuant to this
3section shall be deposited in the rebuild Iowa infrastructure
4fund created in section 8.57.
5 Sec. 7. NEW SECTION. 99E.7 Internet fantasy sports contests
6— age restrictions.
7A person under the age of twenty-one years shall not enter an
8internet fantasy sports contest. A person who violates this
9section with respect to entering an internet fantasy sports
10contest commits a scheduled violation under section 805.8C,
11subsection 11.
12 Sec. 8. NEW SECTION. 99E.8 Division of criminal
13investigation.
14The division of criminal investigation of the department of
15public safety may investigate to determine licensee compliance
16with the requirements of this chapter. Investigations may be
17conducted either on the criminal investigation division’s own
18initiative or at the request of the commission. The criminal
19investigation division and the commission shall cooperate to
20the maximum extent possible on an investigation.
21 Sec. 9. NEW SECTION. 99E.9 Setoff.
221. A licensee or a person acting on behalf of a licensee
23shall be provided electronic access to the names of the
24persons indebted to a claimant agency pursuant to the process
25established pursuant to section 99E.3, subsection 5. The
26electronic access provided by the claimant agency shall
27include access to the names of the debtors, their social
28security numbers, and any other information that assists the
29licensee in identifying the debtors. If an internet fantasy
30sports contest player located in this state makes an account
31balance withdrawal equal to one thousand two hundred dollars
32or greater, the licensee shall perform an electronic records
33search of persons indebted to a claimant agency. If the name
34of the internet fantasy sports contest player is retrieved by
35the licensee pursuant to the records search, the retrieval of
-7-1such a name shall constitute a valid lien upon and claim of
2lien against the account balance withdrawal of the internet
3fantasy sports contest player whose name is electronically
4retrieved from the claimant agency. If an internet fantasy
5sports contest player’s account balance withdrawal is equal
6to or greater than one thousand two hundred dollars per
7occurrence, the full amount of the debt shall be collectible
8from any account balance withdrawal due the internet fantasy
9sports contest player without regard to limitations on the
10amounts that may be collectible in increments through setoff or
11other proceedings.
122. The licensee is authorized and directed to withhold
13any account balance withdrawal of an internet fantasy sports
14contest player which is paid out directly by the licensee
15subject to the lien created by this section and provide notice
16of such withholding to the internet fantasy sports contest
17player making the account balance withdrawal. The licensee
18shall pay the funds over to the collection entity which
19administers the setoff program pursuant to section 8A.504.
203. Notwithstanding any other provision of law to the
21contrary, the licensee may provide to a claimant agency all
22information necessary to accomplish and effectuate the intent
23of this section, and likewise the claimant agency may provide
24all information necessary to accomplish and effectuate the
25intent of this section.
264. The information obtained by a claimant agency from the
27licensee in accordance with this section shall retain its
28confidentiality and shall only be used by a claimant agency in
29the pursuit of its debt collection duties and practices. An
30employee or prior employee of a claimant agency who unlawfully
31discloses any such information for any other purpose, except
32as otherwise specifically authorized by law, shall be subject
33to the penalties specified by law for unauthorized disclosure
34of confidential information by an agent or employee of the
35claimant agency.
-8- 15. The information obtained by a licensee from a claimant
2agency in accordance with this section shall retain its
3confidentiality and only be used by the licensee in the
4pursuit of debt collection duties and practices. An employee
5or prior employee of a licensee who unlawfully discloses any
6such information for any other purpose, except as otherwise
7specifically authorized by law, shall be subject to the
8same penalties specified by law for unauthorized disclosure
9of confidential information by an agent or employee of the
10licensee.
116. Except as otherwise provided in this chapter,
12attachments, setoffs, or executions authorized and issued
13pursuant to law shall be withheld if timely served upon the
14licensee.
157. A claimant agency or licensee, acting in good faith,
16shall not be liable to any person for actions taken pursuant to
17this section.
18 Sec. 10. NEW SECTION. 99E.10 Penalties.
19In addition to any other penalty specified in this chapter,
20a person who willfully fails to comply with the requirements
21of this chapter and the rules adopted pursuant to chapter 17A
22commits a class “D” felony and, in addition, shall be barred
23for life from internet fantasy sports contests.
24 Sec. 11. Section 232C.4, subsection 3, Code 2017, is amended
25to read as follows:
263. An emancipated minor shall remain subject to voting
27restrictions under chapter 48A, gambling restrictions under
28chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
29contest restrictions under chapter 99E, alcohol restrictions
30under chapter 123, compulsory attendance requirements under
31chapter 299, and cigarette tobacco restrictions under chapter
32453A.
33 Sec. 12. Section 714B.10, subsection 1, Code 2017, is
34amended to read as follows:
351. Advertising by sponsors registered pursuant to chapter
-9-1557B, licensed pursuant to chapter 99B, or regulated pursuant
2to chapter 99D, 99E, 99F, or 99G.
3 Sec. 13. Section 805.8C, Code 2017, is amended by adding the
4following new subsection:
5 NEW SUBSECTION. 11. Internet fantasy sports contest
6violations. For violations of legal age for entering an
7internet fantasy sports contest under section 99E.7, the
8scheduled fine is five hundred dollars. Failure to pay the
9fine by a person under the age of eighteen shall not result in
10the person being detained in a secure facility.
11 Sec. 14. IMPLEMENTATION DATE. The following provision or
12provisions of this Act shall not be implemented until July 1,
132019:
141. The section of this Act enacting section 99E.9.
15EXPLANATION
16The inclusion of this explanation does not constitute agreement with
17the explanation’s substance by the members of the general assembly.
18This bill authorizes internet fantasy sports contests
19and provides for the licensing, regulation, and taxation of
20internet fantasy sports contests.
21New Code section 99E.1 provides for definitions. A “fantasy
22sports contest” is defined as any fantasy or simulated game
23or contest in which all prizes and awards offered to winning
24participants are established and made known in advance of the
25contest, all winning outcomes reflect the relative knowledge
26and skill of the participants and are determined predominantly
27by accumulated statistical results of the performance of
28individuals in a fully completed game or contest, and no
29winning outcome is based on the score, or performance of any
30single actual team or combination of such teams or solely on
31any single performance of an individual athlete in any single
32actual sporting or other event. An “internet fantasy sports
33contest” is defined as a method of entering a fantasy sports
34contest by establishing an account with an internet fantasy
35sports contest service provider. An “internet fantasy sports
-10-1contest player” is defined as a person who is at least 21 years
2of age who participates in an internet fantasy sports contest.
3The bill also defines internet fantasy sports contest adjusted
4revenues, internet fantasy sports contest service provider, and
5location percentage.
6New Code section 99E.2 provides that the system of entering
7an internet fantasy sports contest is legal when conducted by a
8licensed internet fantasy sports contest service provider as
9provided in the new Code chapter.
10New Code section 99E.3 establishes the powers of the racing
11and gaming commission in relation to internet fantasy sports
12contests and internet fantasy sports contest service providers.
13Specifically, the new Code section authorizes the commission to
14investigate and license internet fantasy sports contest service
15providers, assess fines and revoke or suspend licenses, and
16take any other action to enforce the requirements of the new
17Code chapter.
18New Code section 99E.4 establishes the requirements for an
19applicant to be granted a license to conduct internet fantasy
20sports contests. The Code section allows the commission
21to charge the applicant a fee for the department of public
22safety, division of criminal investigation, to defray the
23costs associated with any investigation. The new Code
24section provides that a license shall not be issued if there
25is evidence that the applicant has failed to meet certain
26qualifying requirements. A person who knowingly makes a
27false statement on the application is guilty of an aggravated
28misdemeanor.
29New Code section 99E.5 establishes the terms and conditions
30of licenses issued to conduct internet fantasy sports contests.
31The Code section provides that a license may be issued for
32a period of not more than three years and provides that
33the annual license fee shall be $500. The new Code section
34provides that a licensed internet fantasy sports contest
35service provider shall prevent any employees and certain family
-11-1members from participating in internet fantasy sports contests,
2verify that internet fantasy sports contest players located
3in this state are 21 or older, ensure that participants in
4a game or contest shall not be allowed to enter an internet
5fantasy sports contest involving that game or contest, prohibit
6internet fantasy sports contests based upon any interscholastic
7or intercollegiate athletic contest or any amateur athletic
8contest or competition in which all participants are under
9the age of 21, permit individuals to restrict themselves
10from entering an internet fantasy sports contest, perform an
11independent audit, and pay the tax imposed by the new Code
12chapter.
13New Code section 99E.6 provides for a tax of 7.5 percent
14to be imposed on internet fantasy sports contest adjusted
15revenues. The bill defines, in new Code section 99E.1,
16internet fantasy sports contest adjusted revenues as the
17total of fees and charges collected, less winnings, in an
18internet fantasy sports contest multiplied by the percentage
19of fees and charges paid by participants who are located in
20this state in that contest. The bill provides that of the
21revenues collected, an amount equal to .5 percent of internet
22fantasy sports contest adjusted revenues is appropriated to the
23department of public health for gambling treatment with the
24remainder of revenues collected to be deposited in the rebuild
25Iowa infrastructure fund.
26New Code section 99E.7 provides that a person under the
27age of 21 shall not enter an internet fantasy sports contest.
28A person who violates this Code section commits a scheduled
29violation under Code section 805.8C and is subject to a $500
30fine. Code section 805.8C is amended to reflect this violation
31and applicable fine.
32New Code section 99E.8 authorizes the division of criminal
33investigation of the department of public safety to investigate
34licensee compliance with the requirements of the new Code
35chapter.
-12- 1New Code section 99E.9 requires a licensee to offset
2account balance withdrawals of an internet fantasy sports
3contest player who is a debtor in an amount equal to or greater
4than $1,200, subject to the requirements of this new Code
5section. The bill provides that this Code section shall not be
6implemented until July 1, 2019.
7New Code section 99E.10 provides that, in addition to any
8other penalty specified in the new Code chapter, a person who
9willfully fails to comply with the requirements of the Code
10chapter commits a class “D” felony and shall be barred for life
11from internet fantasy sports contests.
12Code section 232C.4, concerning emancipation orders and
13minors, is amended to reflect that an emancipated minor is
14subject to the age restrictions for internet fantasy sports
15contests.
16Code section 714B.10, concerning prize promotions, is
17amended to exempt internet fantasy sports contests from the
18Code chapter.
-13-ec/nh
2tax, making an appropriation, making penalties applicable,
3and including implementation provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 99E.1 Definitions.
2As used in this chapter, unless the context otherwise
3requires:
41. “Applicant” means an internet fantasy sports contest
5service provider applying for a license to conduct internet
6fantasy sports contests under this chapter.
72. “Commission” means the state racing and gaming commission
8created under section 99D.5.
93. “Fantasy sports contest” includes any fantasy or
10simulated game or contest in which the fantasy sports contest
11operator is not a participant in the game or contest, the value
12of all prizes and awards offered to winning participants are
13established and made known to the participants in advance
14of the contest, all winning outcomes reflect the relative
15knowledge and skill of the participants and shall be determined
16by accumulated statistical results of the performance of
17individuals, including athletes in the case of sporting events,
18in a fully completed game or contest, and no winning outcome
19is based on the score, point spread, or any performance or
20performances of any single actual team or solely on any single
21performance of an individual athlete or player in any single
22actual event. For purposes of this subsection, “fully completed
23game or contest” means the entirety of the game or contest, and
24not merely any portion thereof, and includes the entirety of a
25game or contest that has been suspended or shortened on account
26of weather or other natural or unforeseen event.
274. “Internet fantasy sports contest” means a method of
28entering a fantasy sports contest by which a person may
29establish an account with an internet fantasy sports contest
30service provider, deposit money into the account, and use
31the account balance for entering a fantasy sports contest by
32utilizing electronic communication.
335. “Internet fantasy sports contest adjusted revenues” means,
34for each internet fantasy sports contest, the amount equal to
35the total charges and fees collected from all participants
-1-1entering the internet fantasy sports contest less winnings paid
2to participants in the contest, multiplied by the location
3percentage.
46. “Internet fantasy sports contest player” means a person
5who is at least twenty-one years of age and participates in an
6internet fantasy sports contest operated by an internet fantasy
7sports contest service provider.
87. “Internet fantasy sports contest service provider” means
9a person, including a licensee under chapter 99D or 99F, who
10conducts an internet fantasy sports contest as authorized by
11this chapter.
128. “Location percentage” means, for each internet fantasy
13sports contest, the percentage, rounded to the nearest tenth of
14a percent, equal to the total charges and fees collected from
15all internet fantasy sports contest players located in this
16state divided by the total charges and fees collected from all
17participants in the internet fantasy sports contest.
18 Sec. 2. NEW SECTION. 99E.2 Internet fantasy sports contests
19authorized.
20The system of entering an internet fantasy sports contest as
21provided by this chapter is legal when conducted by a licensed
22internet fantasy sports contest service provider as provided in
23this chapter.
24 Sec. 3. NEW SECTION. 99E.3 Commission — powers.
25The commission shall have full jurisdiction over and shall
26supervise internet fantasy sports contests and internet fantasy
27sports contest service providers as governed by this chapter.
28The commission shall have the following powers and shall adopt
29rules pursuant to chapter 17A to implement this chapter:
301. To investigate applicants and determine the eligibility
31of applicants for a license to conduct internet fantasy sports
32contests.
332. To license and regulate internet fantasy sports contest
34service providers subject to the requirements of this chapter.
353. To investigate alleged violations of this chapter
-2-1or the commission rules, orders, or final decisions and to
2take appropriate disciplinary action against a licensee, or
3institute appropriate legal action for enforcement, or both.
4Information gathered during an investigation is confidential
5during the pendency of the investigation.
64. To assess fines and revoke or suspend licenses.
75. To require, beginning July 1, 2019, licensees to
8establish a process with the state for licensees to have
9electronic access to names and social security numbers of
10debtors of claimant agencies through a secured interactive
11internet site maintained by the state.
126. To take any other action as may be reasonable or
13appropriate to enforce this chapter and the commission rules.
14 Sec. 4. NEW SECTION. 99E.4 Requirements of applicant — fee
15— penalty.
161. An applicant for a license to conduct internet fantasy
17sports contests shall complete and sign an application on
18the form prescribed and published by the commission. The
19application shall include such information of the applicant
20that the commission deems necessary for purposes of issuing a
21license pursuant to this chapter.
222. An applicant shall submit fingerprints and information
23that the commission deems necessary to the commission in the
24manner prescribed on the application forms. The fingerprints
25may be submitted to the federal bureau of investigation by the
26department of public safety through the state criminal history
27repository for the purpose of a national criminal history
28check.
293. The commission shall charge the applicant a fee set
30by the department of public safety, division of criminal
31investigation, to defray the costs associated with any
32investigations conducted pursuant to the requirements of this
33section concerning the applicant. This fee is in addition
34to any other license fee charged by the commission. The fee
35may be retained by the department of public safety, division
-3-1of criminal investigation, and shall be considered repayment
2receipts as defined in section 8.2.
34. A license shall not be granted to an applicant if there
4is substantial evidence that any of the following apply:
5a. A license issued to the applicant to conduct internet
6fantasy sports contests in another jurisdiction has been
7revoked by an entity licensing persons to conduct such contests
8in that jurisdiction.
9b. The applicant has not demonstrated financial
10responsibility sufficient to adequately meet the requirements
11of the enterprise proposed.
12c. The applicant does not adequately disclose the true
13owners of the enterprise proposed.
14d. The applicant has knowingly made a false statement of a
15material fact to the commission.
16e. The applicant has failed to meet a monetary obligation in
17connection with conducting an internet fantasy sports contest.
18f. The applicant is not of good repute and moral character
19or the applicant has pled guilty to, or has been convicted of,
20a felony.
21g. Any member of the board of directors of the applicant is
22not twenty-one years of age or older.
235. A person who knowingly makes a false statement on the
24application is guilty of an aggravated misdemeanor.
256. For the purposes of this section, “applicant” includes
26each member of the board of directors of an internet fantasy
27sports contest service provider.
28 Sec. 5. NEW SECTION. 99E.5 Licenses — fees — terms and
29conditions — revocation.
301. If the commission is satisfied that the requirements
31of this chapter and its rules adopted under this chapter
32applicable to licensees have been or will be complied with, the
33commission shall issue a license for a period of not more than
34three years to an applicant to conduct internet fantasy sports
35contests in this state.
-4- 12. A licensed internet fantasy sports contest service
2provider shall comply with all of the following requirements:
3a. Prevent employees of the internet fantasy sports contest
4service provider and family members related within the second
5degree of affinity or consanguinity of such employees from
6competing in any internet fantasy sports contest conducted by
7any service provider in which the service provider offers a
8cash prize over five dollars.
9b. Verify that an internet fantasy sports contest player
10located in this state is twenty-one years of age or older.
11c. Ensure that coaches, officials, players, contestants,
12or other individuals who participate in a game or contest
13that is the subject of an internet fantasy sports contest are
14restricted from entering an internet fantasy sports contest in
15which the outcome is determined, in whole or in part, by the
16accumulated statistical results of a team of individuals in the
17game or contest in which they participate.
18d. Prohibit internet fantasy sports contests based upon any
19extracurricular interscholastic athletic contest or competition
20which is sponsored or administered by an organization as
21defined in section 280.13, any amateur athletic contest or
22competition in which all participants are under the age of
23twenty-one, or any intercollegiate sport as defined in section
249A.102.
25e. Allow individuals to restrict themselves from entering
26an internet fantasy sports contest conducted by the internet
27fantasy sports contest service provider upon request and take
28reasonable steps to prevent those individuals from entering
29any internet fantasy sports contests conducted by the internet
30fantasy sports contest service provider.
31f. Disclose the number of entries a single internet fantasy
32sports contest player may submit to each internet fantasy
33sports contest and take reasonable steps to prevent players
34from submitting more than the allowable number of entries for
35that internet fantasy sports contest.
-5- 1g. Segregate internet fantasy sports contest player funds
2from operational funds and maintain a reserve in the form
3of cash, cash equivalents, an irrevocable letter of credit,
4payment processor reserves and receivables, a bond, or a
5combination thereof in the amount of the deposits in internet
6fantasy sports contest player accounts for the benefit and
7protection of internet fantasy sports contest player funds held
8in internet fantasy sports contest accounts by the internet
9fantasy sports contest service provider.
10h. Annually contract with a third party to perform an
11independent audit, consistent with the standards established
12by the American institute of certified public accountants,
13to ensure compliance with all of the requirements in this
14chapter and submit the results of the independent audit to the
15commission.
16i. Pay the tax as provided in section 99E.6.
173. The annual license fee to conduct internet fantasy sports
18contests shall be five hundred dollars. Moneys collected by
19the commission from the annual license fee paid under this
20subsection shall be considered repayment receipts as defined
21in section 8.2.
224. Upon a violation of any of the conditions listed in
23section 99E.4 or this section by a licensee, the commission
24shall immediately revoke the license.
25 Sec. 6. NEW SECTION. 99E.6 Internet fantasy sports contest
26tax — rate — allocations.
271. A tax of seven and one-half percent is imposed on
28internet fantasy sports contest adjusted revenues. The tax
29imposed by this section shall be paid by the internet fantasy
30sports contest service provider to the commission as provided
31by the commission.
322. Of the revenues collected pursuant to this section, an
33amount equal to one-half of one percent of internet fantasy
34sports contest adjusted revenues is appropriated to the
35department of public health for purposes of the gambling
-6-1treatment program established pursuant to section 135.150. The
2remaining amount of the revenues collected pursuant to this
3section shall be deposited in the rebuild Iowa infrastructure
4fund created in section 8.57.
5 Sec. 7. NEW SECTION. 99E.7 Internet fantasy sports contests
6— age restrictions.
7A person under the age of twenty-one years shall not enter an
8internet fantasy sports contest. A person who violates this
9section with respect to entering an internet fantasy sports
10contest commits a scheduled violation under section 805.8C,
11subsection 11.
12 Sec. 8. NEW SECTION. 99E.8 Division of criminal
13investigation.
14The division of criminal investigation of the department of
15public safety may investigate to determine licensee compliance
16with the requirements of this chapter. Investigations may be
17conducted either on the criminal investigation division’s own
18initiative or at the request of the commission. The criminal
19investigation division and the commission shall cooperate to
20the maximum extent possible on an investigation.
21 Sec. 9. NEW SECTION. 99E.9 Setoff.
221. A licensee or a person acting on behalf of a licensee
23shall be provided electronic access to the names of the
24persons indebted to a claimant agency pursuant to the process
25established pursuant to section 99E.3, subsection 5. The
26electronic access provided by the claimant agency shall
27include access to the names of the debtors, their social
28security numbers, and any other information that assists the
29licensee in identifying the debtors. If an internet fantasy
30sports contest player located in this state makes an account
31balance withdrawal equal to one thousand two hundred dollars
32or greater, the licensee shall perform an electronic records
33search of persons indebted to a claimant agency. If the name
34of the internet fantasy sports contest player is retrieved by
35the licensee pursuant to the records search, the retrieval of
-7-1such a name shall constitute a valid lien upon and claim of
2lien against the account balance withdrawal of the internet
3fantasy sports contest player whose name is electronically
4retrieved from the claimant agency. If an internet fantasy
5sports contest player’s account balance withdrawal is equal
6to or greater than one thousand two hundred dollars per
7occurrence, the full amount of the debt shall be collectible
8from any account balance withdrawal due the internet fantasy
9sports contest player without regard to limitations on the
10amounts that may be collectible in increments through setoff or
11other proceedings.
122. The licensee is authorized and directed to withhold
13any account balance withdrawal of an internet fantasy sports
14contest player which is paid out directly by the licensee
15subject to the lien created by this section and provide notice
16of such withholding to the internet fantasy sports contest
17player making the account balance withdrawal. The licensee
18shall pay the funds over to the collection entity which
19administers the setoff program pursuant to section 8A.504.
203. Notwithstanding any other provision of law to the
21contrary, the licensee may provide to a claimant agency all
22information necessary to accomplish and effectuate the intent
23of this section, and likewise the claimant agency may provide
24all information necessary to accomplish and effectuate the
25intent of this section.
264. The information obtained by a claimant agency from the
27licensee in accordance with this section shall retain its
28confidentiality and shall only be used by a claimant agency in
29the pursuit of its debt collection duties and practices. An
30employee or prior employee of a claimant agency who unlawfully
31discloses any such information for any other purpose, except
32as otherwise specifically authorized by law, shall be subject
33to the penalties specified by law for unauthorized disclosure
34of confidential information by an agent or employee of the
35claimant agency.
-8- 15. The information obtained by a licensee from a claimant
2agency in accordance with this section shall retain its
3confidentiality and only be used by the licensee in the
4pursuit of debt collection duties and practices. An employee
5or prior employee of a licensee who unlawfully discloses any
6such information for any other purpose, except as otherwise
7specifically authorized by law, shall be subject to the
8same penalties specified by law for unauthorized disclosure
9of confidential information by an agent or employee of the
10licensee.
116. Except as otherwise provided in this chapter,
12attachments, setoffs, or executions authorized and issued
13pursuant to law shall be withheld if timely served upon the
14licensee.
157. A claimant agency or licensee, acting in good faith,
16shall not be liable to any person for actions taken pursuant to
17this section.
18 Sec. 10. NEW SECTION. 99E.10 Penalties.
19In addition to any other penalty specified in this chapter,
20a person who willfully fails to comply with the requirements
21of this chapter and the rules adopted pursuant to chapter 17A
22commits a class “D” felony and, in addition, shall be barred
23for life from internet fantasy sports contests.
24 Sec. 11. Section 232C.4, subsection 3, Code 2017, is amended
25to read as follows:
263. An emancipated minor shall remain subject to voting
27restrictions under chapter 48A, gambling restrictions under
28chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
29contest restrictions under chapter 99E, alcohol restrictions
30under chapter 123, compulsory attendance requirements under
31chapter 299, and cigarette tobacco restrictions under chapter
32453A.
33 Sec. 12. Section 714B.10, subsection 1, Code 2017, is
34amended to read as follows:
351. Advertising by sponsors registered pursuant to chapter
-9-1557B, licensed pursuant to chapter 99B, or regulated pursuant
2to chapter 99D, 99E, 99F, or 99G.
3 Sec. 13. Section 805.8C, Code 2017, is amended by adding the
4following new subsection:
5 NEW SUBSECTION. 11. Internet fantasy sports contest
6violations. For violations of legal age for entering an
7internet fantasy sports contest under section 99E.7, the
8scheduled fine is five hundred dollars. Failure to pay the
9fine by a person under the age of eighteen shall not result in
10the person being detained in a secure facility.
11 Sec. 14. IMPLEMENTATION DATE. The following provision or
12provisions of this Act shall not be implemented until July 1,
132019:
141. The section of this Act enacting section 99E.9.
15EXPLANATION
16The inclusion of this explanation does not constitute agreement with
17the explanation’s substance by the members of the general assembly.
18This bill authorizes internet fantasy sports contests
19and provides for the licensing, regulation, and taxation of
20internet fantasy sports contests.
21New Code section 99E.1 provides for definitions. A “fantasy
22sports contest” is defined as any fantasy or simulated game
23or contest in which all prizes and awards offered to winning
24participants are established and made known in advance of the
25contest, all winning outcomes reflect the relative knowledge
26and skill of the participants and are determined predominantly
27by accumulated statistical results of the performance of
28individuals in a fully completed game or contest, and no
29winning outcome is based on the score, or performance of any
30single actual team or combination of such teams or solely on
31any single performance of an individual athlete in any single
32actual sporting or other event. An “internet fantasy sports
33contest” is defined as a method of entering a fantasy sports
34contest by establishing an account with an internet fantasy
35sports contest service provider. An “internet fantasy sports
-10-1contest player” is defined as a person who is at least 21 years
2of age who participates in an internet fantasy sports contest.
3The bill also defines internet fantasy sports contest adjusted
4revenues, internet fantasy sports contest service provider, and
5location percentage.
6New Code section 99E.2 provides that the system of entering
7an internet fantasy sports contest is legal when conducted by a
8licensed internet fantasy sports contest service provider as
9provided in the new Code chapter.
10New Code section 99E.3 establishes the powers of the racing
11and gaming commission in relation to internet fantasy sports
12contests and internet fantasy sports contest service providers.
13Specifically, the new Code section authorizes the commission to
14investigate and license internet fantasy sports contest service
15providers, assess fines and revoke or suspend licenses, and
16take any other action to enforce the requirements of the new
17Code chapter.
18New Code section 99E.4 establishes the requirements for an
19applicant to be granted a license to conduct internet fantasy
20sports contests. The Code section allows the commission
21to charge the applicant a fee for the department of public
22safety, division of criminal investigation, to defray the
23costs associated with any investigation. The new Code
24section provides that a license shall not be issued if there
25is evidence that the applicant has failed to meet certain
26qualifying requirements. A person who knowingly makes a
27false statement on the application is guilty of an aggravated
28misdemeanor.
29New Code section 99E.5 establishes the terms and conditions
30of licenses issued to conduct internet fantasy sports contests.
31The Code section provides that a license may be issued for
32a period of not more than three years and provides that
33the annual license fee shall be $500. The new Code section
34provides that a licensed internet fantasy sports contest
35service provider shall prevent any employees and certain family
-11-1members from participating in internet fantasy sports contests,
2verify that internet fantasy sports contest players located
3in this state are 21 or older, ensure that participants in
4a game or contest shall not be allowed to enter an internet
5fantasy sports contest involving that game or contest, prohibit
6internet fantasy sports contests based upon any interscholastic
7or intercollegiate athletic contest or any amateur athletic
8contest or competition in which all participants are under
9the age of 21, permit individuals to restrict themselves
10from entering an internet fantasy sports contest, perform an
11independent audit, and pay the tax imposed by the new Code
12chapter.
13New Code section 99E.6 provides for a tax of 7.5 percent
14to be imposed on internet fantasy sports contest adjusted
15revenues. The bill defines, in new Code section 99E.1,
16internet fantasy sports contest adjusted revenues as the
17total of fees and charges collected, less winnings, in an
18internet fantasy sports contest multiplied by the percentage
19of fees and charges paid by participants who are located in
20this state in that contest. The bill provides that of the
21revenues collected, an amount equal to .5 percent of internet
22fantasy sports contest adjusted revenues is appropriated to the
23department of public health for gambling treatment with the
24remainder of revenues collected to be deposited in the rebuild
25Iowa infrastructure fund.
26New Code section 99E.7 provides that a person under the
27age of 21 shall not enter an internet fantasy sports contest.
28A person who violates this Code section commits a scheduled
29violation under Code section 805.8C and is subject to a $500
30fine. Code section 805.8C is amended to reflect this violation
31and applicable fine.
32New Code section 99E.8 authorizes the division of criminal
33investigation of the department of public safety to investigate
34licensee compliance with the requirements of the new Code
35chapter.
-12- 1New Code section 99E.9 requires a licensee to offset
2account balance withdrawals of an internet fantasy sports
3contest player who is a debtor in an amount equal to or greater
4than $1,200, subject to the requirements of this new Code
5section. The bill provides that this Code section shall not be
6implemented until July 1, 2019.
7New Code section 99E.10 provides that, in addition to any
8other penalty specified in the new Code chapter, a person who
9willfully fails to comply with the requirements of the Code
10chapter commits a class “D” felony and shall be barred for life
11from internet fantasy sports contests.
12Code section 232C.4, concerning emancipation orders and
13minors, is amended to reflect that an emancipated minor is
14subject to the age restrictions for internet fantasy sports
15contests.
16Code section 714B.10, concerning prize promotions, is
17amended to exempt internet fantasy sports contests from the
18Code chapter.
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