HF 2540

3rd Engrossment - 89th Legislature (2015 - 2016) Posted on 06/02/2016 08:52am

A bill for an act
relating to commerce; authorizing fantasy sports; amending Minnesota Statutes
2014, sections 541.20; 541.21; 609.761, by adding a subdivision; proposing
coding for new law in Minnesota Statutes, chapter 325F.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [325F.9901] CONSUMER PROTECTION; FANTASY SPORTS.
new text end

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
a fantasy game with an entry fee in this state must implement commercially reasonable
procedures to:
new text end

new text begin (1) prevent employees of the game operator and relatives living in the same
household as employees of the game operator from competing in any fantasy game with an
entry fee offered by any game operator in which the operator offers a cash prize over $5;
new text end

new text begin (2) prevent disclosure of gaming information that could affect fantasy game play
before the information is made publicly available;
new text end

new text begin (3) prevent a game operator employee from being a participant in a fantasy game
the game operator offers;
new text end

new text begin (4) verify that contest participants are 18 years of age through the use of a
commercially available database or aggregate of databases that is regularly used
by government and businesses for the purpose of age and identity verification and
authentication;
new text end

new text begin (5) ensure that an individual who participates as a player or official in a game or
contest that is the subject of a fantasy game will be restricted from entering a fantasy game
that is determined, in whole or in part, on the accumulated statistical results of a team of
individuals in the game or contest in which the individual is a participant;
new text end

new text begin (6) make available on the operator's Web site information about resources relating to
compulsive behavior and where to seek assistance for compulsive behavior;
new text end

new text begin (7) make available via Web site, telephone, or online chat means to allow individuals
to irrevocably restrict their ability to enter a fantasy game and select the length of time
restrictions will be in place;
new text end

new text begin (8) disclose the number of entries a single fantasy game player may submit to
each fantasy game with an entry fee and take reasonable steps to prevent a player from
submitting more than the allowable number;
new text end

new text begin (9) for the benefit and protection of fantasy game players' funds held in fantasy game
accounts, segregate player funds from operational funds and maintain a reserve in the
form of cash, cash equivalents, an irrevocable letter of credit, a bond, security deposits
at merchant banks and payment processors, or a combination thereof in the amount of
the balance available for withdrawal in player accounts;
new text end

new text begin (10) offer access to the fantasy game player's play history, including a summary of
entry fees expended, games played and previous line-ups, and prizes awarded;
new text end

new text begin (11) offer access to account details, including all deposit amounts, withdrawal
amounts, and bonus or promotion information, including how much is left on any pending
bonus or promotion and how much has been released to the fantasy game player;
new text end

new text begin (12) prevent a player from using a proxy server to enter the game operator's platform;
new text end

new text begin (13) prominently publish the rules governing each fantasy game with an entry fee;
new text end

new text begin (14) prohibit the use of third-party scripts, and prohibit a person found to be using
a third-party script from playing in a fantasy game offered by the operator for a period
of not less than one year;
new text end

new text begin (15) develop and prominently publish procedures by which a person may file a
complaint with the operator; and
new text end

new text begin (16) disclose the terms of all promotional offers at the time the offers are advertised,
and provide full disclosures of limitations on the offer before a person provides financial
consideration in exchange for the offer.
new text end

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,"
and "entry fee" have the meanings given them under section 609.761, subdivision 7.
"Script" means commands that a computer program can execute to automate processes on
a game operator's Web site or application.
new text end

new text begin Subd. 3. new text end

new text begin Audits. new text end

new text begin A game operator shall contract annually with a third party to
perform an independent audit, consistent with the standards established by the Public
Company Accounting Oversight Board, to ensure compliance with this section. The
game operator must submit the audit to the commissioner of public safety by March 15
each year for examination and inspection.
new text end

Sec. 2.

Minnesota Statutes 2014, section 541.20, is amended to read:

541.20 RECOVERY OF MONEY LOST.

Every person who, by playing at cards, dice, or other game, or by betting on the
hands or sides of such as are gambling, shall lose to any person so playing or betting
any sum of money or any goods, and pays or delivers the same, or any part thereof, to
the winner, may sue for and recover such money by a civil action, before any court
of competent jurisdiction. For purposes of this section, gambling shall not include
pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
or sale of tickets in the state lottery, deleted text begin or deleted text end gambling authorized under chapters 349 and 349A new text begin ,
or participation in a fantasy game as defined under section 609.761, subdivision 7 new text end .

Sec. 3.

Minnesota Statutes 2014, section 541.21, is amended to read:

541.21 COMMITMENTS FOR GAMBLING DEBT VOID.

Every note, bill, bond, mortgage, or other security or conveyance in which the whole
or any part of the consideration shall be for any money or goods won by gambling or
playing at cards, dice, or any other game whatever, or by betting on the sides or hands
of any person gambling, or for reimbursing or repaying any money knowingly lent or
advanced at the time and place of such gambling or betting, or lent and advanced for any
gambling or betting to any persons so gambling or betting, shall be void and of no effect
as between the parties to the same, and as to all persons except such as hold or claim under
them in good faith, without notice of the illegality of the consideration of such contract or
conveyance. The provisions of this section shall not apply to:

(1) pari-mutuel wagering conducted under a license issued pursuant to chapter 240;

(2) purchase of tickets in the state lottery under chapter 349A;

(3) gaming activities conducted pursuant to the Indian Gaming Regulatory Act,
United States Code, title 25, section 2701 et seq.; deleted text begin or deleted text end

(4) lawful gambling activities permitted under chapter 349 new text begin ; or
new text end

new text begin (5) participation in a fantasy game as defined under section 609.761, subdivision 7 new text end .

Sec. 4.

Minnesota Statutes 2014, section 609.761, is amended by adding a subdivision
to read:

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
have the meanings given them:
new text end

new text begin (1) "entry fee" means cash or cash equivalent that is required to be paid by a fantasy
game player to a game operator to participate in a fantasy game;
new text end

new text begin (2) "fantasy game" means a fantasy sports game or contest that meets the following
conditions:
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new text begin (i) the value of all prizes and awards offered to winning game participants are
established and made known to the game participants in advance of the fantasy game;
new text end

new text begin (ii) all winning outcomes are determined predominantly by the accumulated statistical
results of the performance of individuals, including athletes in the case of sporting events;
new text end

new text begin (iii) no winning outcome is based on the score, point spread, or performance
or performances of a single team or combination of such teams or solely on a single
performance of an individual athlete or player in a single event; and
new text end

new text begin (iv) the result of a fantasy game is not based on any athlete participating on a
team sponsored by a secondary or postsecondary educational organization located in
this state; and
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new text begin (3) "game operator" means a person that offers a fantasy game for a cash prize.
new text end

new text begin (b) A fantasy game is a bona fide contest for the determination of skill under section
609.75, subdivision 3, clause (3), and is not a violation of sections 609.75, 609.755,
and 609.76.
new text end

new text begin (c) Sections 609.755 and 609.76 do not prohibit a game operator from offering a
fantasy game.
new text end