HF 2540

1st Unofficial Engrossment - 89th Legislature (2015 - 2016)

Posted on 05/09/2016 09:15 a.m.

1.1A bill for an act 1.2relating to commerce; authorizing fantasy sports;amending Minnesota Statutes 1.32014, sections 541.20; 541.21; 609.761, by adding a subdivision; proposing 1.4coding for new law in Minnesota Statutes, chapter 325F. 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.6    Section 1. new text begin [325F.9901] CONSUMER PROTECTION; FANTASY SPORTS. new text end 1.7     new text begin Subdivision 1. new text end new text begin Fantasy game operation requirements. new text end new text begin A game operator offering new text end 1.8 new text begin a fantasy game with an entry fee in this state must implement commercially reasonable new text end 1.9 new text begin procedures to: new text end 1.10 new text begin (1) prevent employees of the game operator and relatives living in the same new text end 1.11 new text begin household as employees of the game operator from competing in any fantasy game with an new text end 1.12 new text begin entry fee offered by any game operator in which the operator offers a cash prize over $5; new text end 1.13 new text begin (2) prevent disclosure of gaming information that could affect fantasy game play new text end 1.14 new text begin before the information is made publicly available; new text end 1.15 new text begin (3) prevent a game operator employee from being a participant in a fantasy game new text end 1.16 new text begin the game operator offers; new text end 1.17 new text begin (4) verify that contest participants are 18 years of age through the use of a new text end 1.18 new text begin commercially available database or aggregate of databases that is regularly used new text end 1.19 new text begin by government and businesses for the purpose of age and identity verification and new text end 1.20 new text begin authentication; new text end 1.21 new text begin (5) ensure that an individual who participates as a player or official in a game or new text end 1.22 new text begin contest that is the subject of a fantasy game will be restricted from entering a fantasy game new text end 1.23 new text begin that is determined, in whole or in part, on the accumulated statistical results of a team of new text end 1.24 new text begin individuals in the game or contest in which the individual is a participant; new text end 2.1 new text begin (6) make available on the operator's Web site information about resources relating to new text end 2.2 new text begin compulsive behavior and where to seek assistance for compulsive behavior; new text end 2.3 new text begin (7) make available via Web site, telephone, or online chat means to allow individuals new text end 2.4 new text begin to irrevocably restrict their ability to enter a fantasy game and select the length of time new text end 2.5 new text begin restrictions will be in place; new text end 2.6 new text begin (8) disclose the number of entries a single fantasy game player may submit to new text end 2.7 new text begin each fantasy game with an entry fee and take reasonable steps to prevent a player from new text end 2.8 new text begin submitting more than the allowable number; new text end 2.9 new text begin (9) for the benefit and protection of fantasy game players' funds held in fantasy game new text end 2.10 new text begin accounts, segregate player funds from operational funds and maintain a reserve in the new text end 2.11 new text begin form of cash, cash equivalents, an irrevocable letter of credit, a bond, security deposits new text end 2.12 new text begin at merchant banks and payment processors, or a combination thereof in the amount of new text end 2.13 new text begin the balance available for withdrawal in player accounts; new text end 2.14 new text begin (10) offer access to the fantasy game player's play history, including a summary of new text end 2.15 new text begin entry fees expended, games played and previous line-ups, and prizes awarded; new text end 2.16 new text begin (11) offer access to account details, including all deposit amounts, withdrawal new text end 2.17 new text begin amounts, and bonus or promotion information, including how much is left on any pending new text end 2.18 new text begin bonus or promotion and how much has been released to the fantasy game player; new text end 2.19 new text begin (12) prevent a player from using a proxy server to enter the game operator's platform; new text end 2.20 new text begin (13) prominently publish the rules governing each fantasy game with an entry fee; new text end 2.21 new text begin (14) prohibit the use of third-party scripts, and prohibit a person found to be using new text end 2.22 new text begin a third-party script from playing in a fantasy game offered by the operator for a period new text end 2.23 new text begin of not less than one year; new text end 2.24 new text begin (15) develop and prominently publish procedures by which a person may file a new text end 2.25 new text begin complaint with the operator; and new text end 2.26 new text begin (16) disclose the terms of all promotional offers at the time the offers are advertised, new text end 2.27 new text begin and provide full disclosures of limitations on the offer before a person provides financial new text end 2.28 new text begin consideration in exchange for the offer. new text end 2.29     new text begin Subd. 2. new text end new text begin Definitions. new text end new text begin For purposes of this section, "game operator," "fantasy game," new text end 2.30 new text begin and "entry fee" have the meanings given them under section 609.761, subdivision 7. new text end 2.31 new text begin "Commissioner" means the commissioner of public safety. "Script" means commands new text end 2.32 new text begin that a computer program can execute to automate processes on a game operator's Web new text end 2.33 new text begin site or application. new text end 2.34     new text begin Subd. 3. new text end new text begin Registration. new text end new text begin (a) A game operator shall register with the Department of new text end 2.35 new text begin Public Safety within 30 days of offering a fantasy game to a person in Minnesota. The new text end 2.36 new text begin registration statement must include: new text end 3.1 new text begin (1) the business name, address, and contact information of the game operator; new text end 3.2 new text begin (2) the game operator's Web site address; new text end 3.3 new text begin (3) the names and addresses of the game operator's officers, directors, and any new text end 3.4 new text begin stakeholder with more than 15 percent interest in the operator; new text end 3.5 new text begin (4) the name and contact information of the game operator's independent auditor; new text end 3.6 new text begin (5) the game operator's tax identification number; and new text end 3.7 new text begin (6) proof of the game operator's financial security in an amount sufficient to comply new text end 3.8 new text begin with the provisions of subdivision 1, clause (9). new text end 3.9 new text begin (b) The registration must be submitted by January 15 of every year, and within new text end 3.10 new text begin 30 days if there is a material change in the operator's registration information. The new text end 3.11 new text begin commissioner may not issue a registration under this chapter or may revoke a registration new text end 3.12 new text begin if the operator fails to comply with the requirements of this section. new text end 3.13 new text begin (c) The commissioner may charge an annual registration fee of $500 that adequately new text end 3.14 new text begin covers the cost of issuing the registration and other registration duties. The fees shall new text end 3.15 new text begin be deposited in an account in the special revenue fund and are appropriated to the new text end 3.16 new text begin commissioner for the purposes of this subdivision. new text end 3.17     new text begin Subd. 4. new text end new text begin Audits. new text end new text begin A game operator shall contract annually with a third party to new text end 3.18 new text begin perform an independent audit, consistent with the standards established by the Public new text end 3.19 new text begin Company Accounting Oversight Board or using the Statements on Accounting Standards new text end 3.20 new text begin issued by the Audit Standards Board of the American Institute of Certified Public new text end 3.21 new text begin Accountants, to ensure compliance with this section. The game operator must submit the new text end 3.22 new text begin audit to the commissioner by March 15 each year for examination and inspection. new text end 3.23     new text begin Subd. 5. new text end new text begin Civil remedies. new text end new text begin Any person injured by a violation of this section may bring new text end 3.24 new text begin a civil action and recover actual damages, together with costs and disbursements, including new text end 3.25 new text begin reasonable attorney fees, and receive other equitable relief as determined by the court. new text end 3.26     new text begin Subd. 6. new text end new text begin Criminal penalty. new text end new text begin Any person who knowingly violates the provisions of new text end 3.27 new text begin this section is guilty of a gross misdemeanor. new text end 3.28     new text begin Subd. 7. new text end new text begin Investigations and powers. new text end new text begin The commissioner may designate certain new text end 3.29 new text begin division employees who are authorized to investigate and arrest any person who is new text end 3.30 new text begin suspected of violating any provision of this section and to conduct searches and seizures new text end 3.31 new text begin to enforce any of those laws. Any employee authorized by this subdivision to make an new text end 3.32 new text begin arrest must be licensed under sections 626.84 to 626.863. Nothing in this section limits new text end 3.33 new text begin the authority of the division to exercise any other power specified under chapter 240, new text end 3.34 new text begin 299L, 340A, 349, or 349A. new text end 4.1    Sec. 2. Minnesota Statutes 2014, section 541.20, is amended to read: 4.2541.20 RECOVERY OF MONEY LOST. 4.3Every person who, by playing at cards, dice, or other game, or by betting on the 4.4hands or sides of such as are gambling, shall lose to any person so playing or betting 4.5any sum of money or any goods, and pays or delivers the same, or any part thereof, to 4.6the winner, may sue for and recover such money by a civil action, before any court 4.7of competent jurisdiction. For purposes of this section, gambling shall not include 4.8pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase 4.9or sale of tickets in the state lottery, or gambling authorized under chapters 349 and 349A new text begin , new text end 4.10 new text begin or participation in a fantasy game as defined under section 609.761, subdivision 7 new text end . 4.11    Sec. 3. Minnesota Statutes 2014, section 541.21, is amended to read: 4.12541.21 COMMITMENTS FOR GAMBLING DEBT VOID. 4.13Every note, bill, bond, mortgage, or other security or conveyance in which the whole 4.14or any part of the consideration shall be for any money or goods won by gambling or 4.15playing at cards, dice, or any other game whatever, or by betting on the sides or hands 4.16of any person gambling, or for reimbursing or repaying any money knowingly lent or 4.17advanced at the time and place of such gambling or betting, or lent and advanced for any 4.18gambling or betting to any persons so gambling or betting, shall be void and of no effect 4.19as between the parties to the same, and as to all persons except such as hold or claim under 4.20them in good faith, without notice of the illegality of the consideration of such contract or 4.21conveyance. The provisions of this section shall not apply to: 4.22(1) pari-mutuel wagering conducted under a license issued pursuant to chapter 240; 4.23(2) purchase of tickets in the state lottery under chapter 349A; 4.24(3) gaming activities conducted pursuant to the Indian Gaming Regulatory Act, 4.25United States Code, title 25, section 2701 et seq.; or 4.26(4) lawful gambling activities permitted under chapter 349 new text begin ; or new text end 4.27 new text begin (5) participation in a fantasy game as defined under section 609.761, subdivision 7 new text end . 4.28    Sec. 4. Minnesota Statutes 2014, section 609.761, is amended by adding a subdivision 4.29to read: 4.30     new text begin Subd. 7. new text end new text begin Fantasy games. new text end new text begin (a) For purposes of this subdivision, the following terms new text end 4.31 new text begin have the meanings given them: new text end 4.32 new text begin (1) "entry fee" means cash or cash equivalent that is required to be paid by a fantasy new text end 4.33 new text begin game player to a game operator to participate in a fantasy game; new text end 5.1 new text begin (2) "commissioner" means the commissioner of public safety or a person to whom new text end 5.2 new text begin the commissioner has delegated authority; new text end 5.3 new text begin (3) "fantasy game" means a fantasy contest that meets the following conditions: new text end 5.4 new text begin (i) the value of all prizes and awards offered to winning game participants are new text end 5.5 new text begin established and made known to the game participants in advance of the fantasy game; new text end 5.6 new text begin (ii) all winning outcomes are determined predominantly by the accumulated new text end 5.7 new text begin statistical results of the performance of individual athletes in sporting events; new text end 5.8 new text begin (iii) no winning outcome is based on the score, point spread, or performance or new text end 5.9 new text begin performances of a single team or combination of teams or solely on a single performance new text end 5.10 new text begin of an individual athlete or player in a single event; and new text end 5.11 new text begin (iv) the result of a fantasy game is not based on any athlete participating on a team new text end 5.12 new text begin sponsored by a secondary or postsecondary educational organization; and new text end 5.13 new text begin (4) "game operator" means a person that offers a fantasy game for a cash prize or new text end 5.14 new text begin other prize of value for commercial purposes. new text end 5.15 new text begin (b) A fantasy game conducted by a game operator registered with the commissioner new text end 5.16 new text begin of public safety under section 325F.9901, subdivision 3, is a bona fide contest for the new text end 5.17 new text begin determination of skill under section 609.75, subdivision 3, clause (3), and is not a violation new text end 5.18 new text begin of sections 609.75, 609.755, and 609.76. new text end 5.19 new text begin (c) Sections 609.755 and 609.76 do not prohibit a game operator registered with the new text end 5.20 new text begin commissioner of public safety under section 325F.9901, subdivision 3, from offering a new text end 5.21 new text begin fantasy game. new text end