HF 2540

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 03/24/2016 04:29pm

A bill for an act
relating to commerce; authorizing fantasy sports; amending Minnesota Statutes
2014, sections 297E.03, by adding a subdivision; 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.

Minnesota Statutes 2014, section 297E.03, is amended by adding a
subdivision to read:

new text begin Subd. 9. new text end

new text begin Fantasy game. new text end

new text begin A fantasy game as defined under section 609.761,
subdivision 7, is exempt from taxation under this section.
new text end

Sec. 2.

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

new text begin (a) A game operator offering fantasy games with an entry fee in this state must
implement commercially reasonable procedures that are intended to:
new text end

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

new text begin (2) prevent sharing of confidential information with third parties that could affect
fantasy game play until the information is made publicly available;
new text end

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

new text begin (4) have a mechanism in place that is designed to verify that a fantasy game player is
at least 18 years of age;
new text end

new text begin (5) ensure that individuals who participate 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 they are a participant;
new text end

new text begin (6) allow individuals to restrict themselves from entering a fantasy game upon
request and take reasonable steps to prevent those individuals from entering the operator's
fantasy games;
new text end

new text begin (7) disclose the number of entries a single fantasy game player may submit to each
fantasy game and take reasonable steps to prevent players from submitting more than
the allowable number; and
new text end

new text begin (8) segregate player funds from operational funds and maintain a reserve in the
form of cash, cash equivalents, an irrevocable letter of credit, a bond, or a combination
thereof in the amount of the deposits in player accounts for the benefit and protection of
authorized fantasy game players' funds held in fantasy game accounts.
new text end

new text begin (b) For purposes of this section, "game operator," "fantasy game," and "entry fee"
have the meanings given them under section 609.761, subdivision 7.
new text end

Sec. 3.

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. 4.

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. 5.

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 or simulation sports game or educational game
or contest that meets the following conditions:
new text end

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 statistical results of the performance of individuals are not based on any
athlete participating on a team sponsored by a secondary or postsecondary educational
organization located in this state; and
new text end

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 lottery, bet, or sports bookmaking within the
meaning 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