H0271B1237A01435 MSP:CMD 05/23/17 #90 A01435
AMENDMENTS TO HOUSE BILL NO. 271
Sponsor: SENATOR SCAVELLO
Printer's No. 1237
Amend Bill, page 1, lines 1 through 10, by striking out all
of said lines and inserting
Amending Title 4 (Amusements) of the Pennsylvania Consolidated
Statutes, providing for fantasy contests and for iLottery; in
general provisions, further providing for legislative intent
and for definitions; in Pennsylvania Gaming Control Board,
further providing for general and specific powers, for
licensed gaming entity application appeals from board, for
board minutes and records, for regulatory authority of board,
for reports of board and for diversity goals of board; in
licensees, further providing for Category 3 slot machine
license, for slot machine license application, for supplier
licenses and for manufacturer licenses, providing for
nongaming service provider, further providing for license
renewals and providing for slot machine license operation
fee; in table games, further providing for other financial
transactions and for local share assessment; providing for
interactive gaming; imposing a multi-use gaming device tax;
in revenues, further providing for establishment of State
Gaming Fund and net slot machine revenue distribution and for
the Pennsylvania Gaming Economic Development and Tourism
Fund, establishing the Casino Marketing and Capital
Development Account and further providing for transfers from
State Gaming Fund; in administration and enforcement, further
providing for responsibility and authority of department, for
wagering on credit, for compulsive and problem gambling
program, for financial and employment interests, for
regulation requiring exclusion or ejection of certain
persons, for repeat offenders excludable from licensed gaming
facility, for list of persons self excluded from gaming
activities, for investigations and enforcement and for
prohibited acts and penalties; in miscellaneous provisions,
further providing for appropriations; and making a related
repeal.
Amend Bill, page 1, lines 13 through 21; pages 2 through 24,
lines 1 through 30; page 25, lines 1 through 17; by striking out
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all of said lines on said pages and inserting
Section 1. Title 4 of the Pennsylvania Consolidated Statutes
is amended by adding a part to read:
PART I
AMUSEMENTS GENERALLY
Chapter
1. Preliminary Provisions (Reserved)
3. Fantasy Contests
5. (Reserved)
7. iLottery
CHAPTER 1
PRELIMINARY PROVISIONS
(Reserved)
CHAPTER 3
FANTASY CONTESTS
Subchapter
A. General Provisions
B. Administration
C. Licensure
D. Fiscal Provisions
E. Miscellaneous Provisions
SUBCHAPTER A
GENERAL PROVISIONS
Sec.
301. Scope of chapter.
302. Definitions.
§ 301. Scope of chapter.
This chapter relates to fantasy contests.
§ 302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Board." The Pennsylvania Gaming Control Board.
"Conduct of gaming." The licensed placement, operation and
play of slot machines and table games under Part II (relating to
gaming) as authorized and approved by the board.
"Controlling interest." Either of the following:
(1) For a publicly traded domestic or foreign
corporation, a controlling interest is an interest if a
person's sole voting rights under State law or corporate
articles or bylaws entitle the person to elect or appoint one
or more of the members of the board of directors or other
governing board or the ownership or beneficial holding of 5%
or more of the securities of the publicly traded corporation,
partnership, limited liability company or other form of
publicly traded legal entity, unless this presumption of
control or ability to elect is rebutted by clear and
convincing evidence.
(2) For a privately held domestic or foreign
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corporation, partnership, limited liability company or other
form of privately held legal entity, a controlling interest
is the holding of securities of 15% or more in the legal
entity, unless this presumption of control is rebutted by
clear and convincing evidence.
"Department." The Department of Revenue of the Commonwealth.
"Entry fee." The cash or cash equivalent paid by a
participant to a licensed operator in order to participate in a
fantasy contest.
"Fantasy contest." An online fantasy or simulated game or
contest with an entry fee and a prize or award administered by a
licensed operator in which:
(1) The value of all prizes or awards offered to winning
participants is established and made known to participants in
advance of the contest.
(2) All winning outcomes reflect the relative knowledge
and skill of participants and are determined by accumulated
statistical results of the performance of individuals,
including athletes in the case of sports events.
(3) No winning outcome is based on the score, point
spread or performance of a single actual team or combination
of teams or solely on a single performance of an individual
athlete or player in a single actual event.
"Fantasy contest account." The formal electronic system
implemented by a licensed operator to record a participant's
entry fees, prizes or awards and other activities related to
participation in the licensed operator's fantasy contests.
"Fantasy contest adjusted revenues." For each fantasy
contest, the amount equal to the total amount of all entry fees
collected from all participants entering the fantasy contest
minus prizes or awards paid to participants in the fantasy
contest, multiplied by the in-State percentage.
"Fantasy contest license." A license issued by the
Pennsylvania Gaming Control Board authorizing a person to offer
fantasy contests in this Commonwealth in accordance with this
chapter.
"Gaming service provider." As defined in section 1103
(relating to definitions).
"In-State participant." An individual who participates in a
fantasy contest conducted by a licensed operator and pays a fee
to a licensed operator from a location within this Commonwealth.
"In-State percentage." For each fantasy contest, the
percentage, rounded to the nearest tenth of a percent, equal to
the total entry fees collected from all in-State participants
divided by the total entry fees collected from all participants
in the fantasy contest.
"Key employee." An individual who is employed by an
applicant for a fantasy contest license or a licensed operator
in a director or department head capacity and who is empowered
to make discretionary decisions that regulate fantasy contest
operations as determined by the board.
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"Licensed entity representative." A person, including an
attorney, agent or lobbyist, acting on behalf of or authorized
to represent the interest of an applicant, licensee or other
person authorized by the Pennsylvania Gaming Control Board to
engage in an act or activity which is regulated under this
chapter regarding a matter before, or which may be reasonably
expected to come before, the board.
"Licensed gaming entity." As defined in section 1103
(relating to definitions).
"Licensed operator." A person who holds a fantasy contest
license.
"Participant." An individual who participates in a fantasy
contest, whether the individual is located in this Commonwealth
or another jurisdiction.
"Person." A natural person, corporation, publicly traded
corporation, foundation, organization, business trust, estate,
limited liability company, licensed corporation, trust,
partnership, limited liability partnership, association or other
form of legal business entity.
"Principal." An officer, director, person who directly holds
a beneficial interest in or ownership of the securities of an
applicant for a fantasy contest license or a licensed operator,
person who has a controlling interest in an applicant for a
fantasy contest license or a licensed operator or who has the
ability to elect a majority of the board of directors of a
licensed operator or to otherwise control a licensed operator,
lender or other licensed financial institution of an applicant
for a fantasy contest license or a licensed operator, other than
a bank or lending institution which makes a loan or holds a
mortgage or other lien acquired in the ordinary course of
business, underwriter of an applicant for a fantasy contest
license or a licensed operator or other person or employee of an
applicant for a fantasy contest license or a licensed operator
deemed to be a principal by the board.
"Prize or award." Anything of value worth $100 or more or
any amount of cash or cash equivalents.
"Publicly traded corporation." A person, other than an
individual, that:
(1) has a class or series of securities registered under
the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C.
§ 78a et seq.);
(2) is a registered management company under the
Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. §
80a-1 et seq.); or
(3) is subject to the reporting obligations imposed by
section 15(d) of the Securities Exchange Act of 1934 by
reason of having filed a registration statement that has
become effective under the Securities Act of 1933 (48 Stat.
74, 15 U.S.C. § 77a et seq.).
"Script." A computer program created by a participant or
third party not approved by the licensed operator to automate
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processes on a licensed operator's fantasy contest platform.
"Season-long fantasy contest." A fantasy contest offered by
a licensed operator that is conducted over an entire sports
season.
SUBCHAPTER B
ADMINISTRATION
Sec.
311. General and specific powers of board.
312. Temporary regulations.
313. Fantasy contest license appeals.
314. Board minutes and records.
315. Reports of board.
§ 311. General and specific powers of board.
(a) General powers.--
(1) The board shall have regulatory authority over
licensed operators, principals and key employees and shall
ensure the integrity of fantasy contests offered in this
Commonwealth in accordance with this chapter.
(2) The board may employ individuals as necessary to
carry out the requirements of this chapter who shall serve at
the board's pleasure. An employee of the board shall be
considered a State employee for purposes of 71 Pa.C.S. Pt.
XXV (relating to retirement for State employees and
officers).
(b) Specific powers.--The board shall have the following
powers:
(1) At the board's discretion, to issue, approve, renew,
revoke, suspend, condition or deny issuance of licenses.
(2) At the board's discretion, to suspend, condition or
deny the issuance or renewal of a license or levy fines for
any violation of this chapter.
(3) To publish each January on the board's publicly
accessible Internet website a complete list of all persons
who applied for or held a fantasy contest license at any time
during the preceding calendar year and the status of the
application or fantasy contest license.
(4) To prepare and, through the Governor, submit
annually to the General Assembly an itemized budget
consistent with Article VI of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of 1929,
consisting of the amounts necessary to be appropriated by the
General Assembly out of the accounts established under
section 332 (relating to licensed operator deposits) required
to meet the obligations under this chapter accruing during
the fiscal period beginning July 1 of the following year.
(5) In the event that, in any year, appropriations for
the administration of this chapter are not enacted by June
30, any funds appropriated for the administration of this
chapter which are unexpended, uncommitted and unencumbered at
the end of a fiscal year shall remain available for
expenditure by the board until the enactment of appropriation
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for the ensuing fiscal year.
(6) To promulgate rules and regulations necessary for
the administration and enforcement of this chapter. Except as
provided in section 312 (relating to temporary regulations),
regulations shall be adopted under the act of July 31, 1968
(P.L.769, No.240), referred to as the Commonwealth Documents
Law, and the act of June 25, 1982 (P.L.633, No.181), known as
the Regulatory Review Act.
(7) To administer oaths, examine witnesses and issue
subpoenas compelling the attendance of witnesses or the
production of documents and records or other evidence or to
designate officers or employees to perform duties required by
this chapter.
(7.1) To require prospective and existing employees,
independent contractors, applicants, licensees and permittees
to submit to fingerprinting by the Pennsylvania State Police
or an authorized agent of the Pennsylvania State Police. The
Pennsylvania State Police shall submit the fingerprints to
the Federal Bureau of Investigation for purposes of verifying
the identity of the individual and obtaining records of
criminal arrests and convictions.
(7.2) To require prospective and existing employees,
independent contractors, applicants, licensees and permittees
to submit photographs consistent with the standards
established by the board.
(8) At the board's discretion, to delegate any of the
board's responsibilities under this chapter to the executive
director of the board or other designated staff.
(9) To require licensed operators and applicants for a
fantasy contest license to submit information or
documentation necessary to ensure the proper regulation of
fantasy contests in accordance with this chapter.
(10) To require licensed operators, except for a
licensed operator operating season-long fantasy contests that
generate less than $250,000 in season-long fantasy contest
adjusted revenue, unless the board determines otherwise, to:
(i) annually contract with a certified public
accountant to conduct an independent audit in accordance
with standards adopted by the American Institute of
Certified Public Accountants to verify compliance with
the provisions of this chapter and board regulations;
(ii) annually contract with a testing laboratory
approved by the board to verify compliance with the
provisions of this chapter and board regulations; and
(iii) annually submit to the board and department a
copy of the audit report required by subparagraph (i) and
submit to the board a copy of the report of the testing
laboratory required by subparagraph (ii).
(11) In conjunction with the Department of Drug and
Alcohol Programs or successor agency, to develop a process by
which licensed operators provide participants with a toll-
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free telephone number that provides individuals with
information on how to access appropriate treatment services
for compulsive and problem play.
(b.1) Licensed entity representative.--
(1) A licensed entity representative shall register with
the board, in a manner prescribed by the board. The
registration shall include the name, employer or firm,
business address and business telephone number of both the
licensed entity representative and any licensed operator,
applicant for licensure or other person being represented.
(2) A licensed entity representative shall have an
affirmative duty to update its registration information on an
ongoing basis. Failure to update shall be punishable by the
board.
(3) The board shall maintain a list of licensed entity
representatives which shall contain the information required
under paragraph (1) and shall be available on the board's
publicly accessible Internet website.
(c) Exceptions.--Except as provided under section 342
(relating to licensed gaming entities), nothing in this section
shall be construed to authorize the board:
(1) To require background investigations for employees,
other than key employees and principals, of an applicant for
a fantasy contest license or a licensed operator.
(2) To require additional permits or licenses not
specifically enumerated in this chapter.
(3) To impose additional conditions of licensure on
licensed operators or prohibitions on the operation of
fantasy contests not specifically enumerated in this chapter.
(d) Additional powers.--The board may develop additional
classifications, investigations and conditions as it deems
appropriate.
§ 312. Temporary regulations.
(a) Promulgation.--In order to facilitate the prompt
implementation of this chapter, regulations promulgated by the
board shall be deemed temporary regulations and shall expire no
later than two years following publication. The board may
promulgate temporary regulations not subject to:
(1) Sections 201, 202 and 203 of the act of July 31,
1968 (P.L.769, No.240), referred to as the Commonwealth
Documents Law.
(2) The act of June 25, 1982 (P.L.633, No.181), known as
the Regulatory Review Act.
(b) Expiration.--Except for temporary regulations concerning
new fantasy contests or variations of approved fantasy contests,
network connectivity, security and testing and compulsive and
problem play, the authority provided to the board to adopt
temporary regulations in subsection (a) shall expire no later
than two years following the effective date of this section.
Regulations adopted after this period shall be promulgated as
provided by law.
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§ 313. Fantasy contest license appeals.
An applicant may appeal any final order, determination or
decision of the board involving the approval, issuance, denial,
revocation or conditioning of a fantasy contest license in
accordance with 2 Pa.C.S. Chs. 5 Subch. A (relating to practice
and procedure of Commonwealth agencies) and 7 Subch. A (relating
to judicial review of Commonwealth agency action).
§ 314. Board minutes and records.
(a) Record of proceedings.--The board shall maintain a
record of all proceedings held at public meetings of the board.
The verbatim transcript of the proceedings shall be the property
of the board and shall be prepared by the board upon the request
of any board member or upon the request of another person and
the payment by that person of the costs of preparation.
(b) Applicant information.--
(1) The board shall maintain a list of all applicants
for a fantasy contest license. The list shall include a
record of all actions taken with respect to each applicant.
The list shall be posted on the board's publicly accessible
Internet website.
(2) Information under paragraph (1) regarding an
applicant whose fantasy contest license has been denied,
revoked or not renewed shall be removed from the list after
seven years from the date of the action.
(c) Other files and records.--The board shall maintain other
files and records as it may deem appropriate.
(d) Confidentiality of information.--
(1) The following information submitted by an applicant
for a fantasy contest license under section 322 (relating to
application) or otherwise obtained by the board as part of a
background investigation or other investigation from any
source shall be confidential and withheld from public
disclosure:
(i) All information relating to character, honesty
and integrity, including family, habits, reputation,
history of criminal activity, business activities,
financial affairs and business, professional and personal
associations.
(ii) Nonpublic personal information, including home
addresses, telephone numbers and other personal contact
information, Social Security numbers, educational
records, memberships, medical records, tax returns and
declarations, actual or proposed compensation, financial
account records, creditworthiness or financial condition
relating to an applicant.
(iii) Information relating to proprietary
information, trade secrets, patents or exclusive
licenses, architectural and engineering plans and
information relating to competitive marketing materials
and strategies that may include customer-identifying
information or customer prospects for services subject to
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competition.
(iv) Information with respect to which there is a
reasonable possibility that public release or inspection
of the information would constitute an unwarranted
invasion into personal privacy of an individual as
determined by the board.
(v) Records of an applicant for a fantasy contest
license or a licensed operator not required to be filed
with the Securities and Exchange Commission by issuers
that either have securities registered under section 12
of the Securities Exchange Act of 1934 (48 Stat. 881, 15
U.S.C. § 78l) or are required to file reports under
section 15(d) of the Securities Exchange Act of 1934 (48
Stat. 881, 15 U.S.C. § 78o)
(vi) Records considered nonpublic matters or
information by the Securities and Exchange Commission as
provided by 17 CFR 200.80 (relating to commission records
and information).
(vii) Financial or security information deemed
confidential by the board upon a showing of good cause by
the applicant for a fantasy contest license or licensed
operator.
(2) No claim of confidentiality may be made regarding
any criminal history record information that is available to
the public under 18 Pa.C.S. § 9121(b) (relating to general
regulations).
(3) No claim of confidentiality shall be made regarding
any record in possession of the board that is otherwise
publicly available from a Commonwealth agency, local agency
or another jurisdiction.
(4) The information made confidential under this section
shall be withheld from public disclosure, in whole or in
part, except that any confidential information shall be
released upon the order of a court of competent jurisdiction
or, with the approval of the Attorney General, to a duly
authorized law enforcement agency or shall be released to the
public, in whole or in part, to the extent that the release
is requested by an applicant for a fantasy contest license or
licensed operator and does not otherwise contain confidential
information about another person.
(5) The board may seek a voluntary waiver of
confidentiality from an applicant for a fantasy contest
license or a licensed operator, but may not require an
applicant or licensed operator to waive any confidentiality
provided for in this subsection as a condition for the
approval of an application, renewal of a fantasy contest
license or other action of the board.
(e) Notice.--Notice of the contents of information, except
to a duly authorized law enforcement agency under this section,
shall be given to an applicant or licensee in a manner
prescribed by the rules and regulations adopted by the board.
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(f) Information held by department.--Files, records, reports
and other information in the possession of the department
pertaining to licensed operators shall be made available to the
board as may be necessary for the effective administration of
this chapter.
§ 315. Reports of board.
(a) General rule.--The annual report submitted by the board
under section 1211 (relating to reports of board) shall include
the following information on the conduct of fantasy contests:
(1) Total fantasy contest adjusted revenues.
(2) All taxes, fees, fines and other revenue collected
from licensed operators during the previous year. The
department shall collaborate with the board to carry out the
requirements of this section.
(3) At the board's discretion, any other information
related to the conduct of fantasy contests or licensed
operators.
(b) Licensed operators.--The board may require licensed
operators to provide information to the board to assist in the
preparation of the report.
SUBCHAPTER C
LICENSURE
Sec.
321. General prohibition.
322. Application.
323. Issuance and denial of license.
324. License renewal.
325. Conditions of licensure.
326. Prohibitions.
327. Change in ownership or control of licensed operators.
328. Penalties.
§ 321. General prohibition.
(a) General rule.--Except as provided for in subsection (b),
no person may offer or otherwise make available for play in this
Commonwealth a fantasy contest without a fantasy contest license
issued by the board.
(b) Existing activity.--A person who applies for or renews a
fantasy contest license in accordance with this chapter may
operate during the application or renewal period unless:
(1) The board has reasonable cause to believe the person
is or may be in violation of the provisions of this chapter.
(2) The board requires the person to suspend the
operation of any fantasy contest until the license is issued
or renewed.
§ 322. Application.
(a) Form and information.--An application for a license
shall be submitted on a form and in a manner as shall be
required by the board. An application for a fantasy contest
license shall contain the following information:
(1) The name, Federal employer identification number and
principal address of the applicant; if a corporation, the
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state of its incorporation, the full name and address of each
officer and director of the corporation, and, if a foreign
corporation, whether it is qualified to do business in this
Commonwealth; if a partnership or joint venture, the name and
address of each officer of the partnership or joint venture.
(2) The name and address of the person having custody of
the applicant's financial records.
(3) The names and addresses of key employees.
(4) The names and addresses of each of the applicant's
principals.
(5) Information, documentation and assurances related to
financial and criminal history as the board deems necessary
to establish by clear and convincing evidence the financial
and character suitability, integrity and responsibility of
the applicant and the applicant's key employees and
principals.
(6) Information and documentation necessary to establish
the applicant's ability to comply with section 325 (relating
to conditions of licensure).
(7) Any other information required by the board.
(b) Application fee.--Each application submitted under this
chapter shall be accompanied by an application fee which shall
be determined by the board. The fees established by the board
shall be utilized to pay all costs incurred by the board to
fulfill the requirements of this section and section 323
(relating to issuance and denial of license). If the fee is
greater than the costs incurred by the board, then the board
shall remit the difference to the applicant.
(c) Additional information.--A person applying for a fantasy
contest license shall have the continuing duty to provide
information required by the board and to cooperate in any
inquiry or investigation.
(d) Abbreviated application process.--The board, at its
discretion, may establish an abbreviated application process for
a fantasy contest license for persons that are also licensed
gaming entities. The abbreviated application may only require
information not in possession of the board that is necessary to
fulfill the requirements of this chapter.
§ 323. Issuance and denial of license.
(a) Duty to review applications.--The board shall review all
applications for a license and shall issue a license to any
applicant that:
(1) Has submitted a completed application and paid the
nonrefundable application fee as required by the board under
section 322 (relating to application).
(2) Has demonstrated that the applicant has the
financial stability, integrity and responsibility to comply
with the provisions of this chapter and regulations
established by the board.
(3) Has not been denied a license under subsection (b).
(b) Reasons to deny applications.--The board may deny an
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application for a license if the applicant:
(1) has knowingly made a false statement of material
fact or has deliberately failed to disclose any information
requested;
(2) employs a principal or key employee who has been
convicted of a felony, a crime of moral turpitude or any
criminal offense involving dishonesty or breach of trust
within 10 years prior to the date of the application for
license;
(3) has at any time knowingly failed to comply with the
provisions of this chapter or requirements of the board;
(4) has had a registration, permit or license to conduct
fantasy contests denied or revoked in another jurisdiction;
(5) has legally defaulted in the payment of an
obligation or debt due to the Commonwealth or is not
compliant with taxes due; or
(6) is not qualified to do business in this Commonwealth
or is not subject to the jurisdiction of the courts of the
Commonwealth.
(c) Time period for review.--The board shall conclude its
review of an application for a fantasy contest license within
180 days of receipt of the completed application. If the license
is not issued, the board shall provide the applicant with the
justification for not issuing a license with specificity.
(d) License fee.--
(1) Within 30 days of the board issuing a fantasy
contest license, an applicant shall pay to the board a
license fee of $50,000 or an amount equivalent to 7.5% of the
applicant's fantasy contest adjusted revenues for the
previous calendar year, whichever is less, except that an
applicant who is also a licensed gaming entity shall pay to
the board a license fee of $50,000. The minimum amount of the
license fee shall be $5,000.
(2) The license fee collected under this subsection
shall be deposited into the General Fund.
(3) If an applicant fails to pay the fee required by
this subsection, the board shall suspend or revoke the
applicant's fantasy contest license until payment of the
license fee is received.
(e) Abbreviated approval process.--The board, at its
discretion, may establish an abbreviated approval process for
the issuance of a fantasy contest license to a licensed gaming
entity whose slot machine license and table game certificate are
in good standing.
§ 324. License renewal.
(a) Renewal.--
(1) A license issued under this chapter shall be valid
for a period of five years.
(2) Nothing in this paragraph shall be construed to
relieve a licensed operator of the affirmative duty to notify
the board of changes relating to the status of its fantasy
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contest license or to any other information contained in the
application materials on file with the board.
(3) The application for renewal of a fantasy contest
license must be submitted at least 90 days prior to the
expiration of the license and include an update of the
information contained in the initial application for a
fantasy contest license. A fantasy contest license for which
a completed renewal application and fee as required under
subsection (c) has been received by the board shall continue
in effect unless and until the board sends written
notification to the licensed operator that the board has
denied the renewal of the license.
(b) Revocation or failure to renew.--
(1) In addition to any other sanction the board may
impose under this chapter, the board may at its discretion
suspend, revoke or deny renewal of a fantasy contest license
issued under this chapter if it receives information that:
(i) the applicant or any of the applicant's key
employees or principals are in violation of a provision
of this chapter;
(ii) the applicant has furnished the board with
false or misleading information;
(iii) the information contained in the applicant's
initial application or any renewal application is no
longer true and correct;
(iv) the applicant has failed to remit taxes or
assessments required under section 331 (relating to
fantasy contest tax), 332 (relating to licensed operator
deposits) or 333 (relating to responsibility and
authority of department); or
(v) the applicant has legally defaulted in the
payment of any obligation or debt due to the
Commonwealth.
(2) In the event of a revocation or failure to renew,
the applicant's authorization to conduct fantasy contests
shall immediately cease and all fees paid in connection with
the application shall be deemed to be forfeited.
(3) In the event of a suspension, the applicant's
authorization to conduct fantasy contests shall immediately
cease until the board has notified the applicant that the
suspension is no longer in effect.
(c) Renewal fee.--
(1) Within 30 days of the board renewing a fantasy
contest license, the licensed operator shall pay to the board
a renewal fee of $5,000, or an amount equal to 7.5% of the
applicant's fantasy contest adjusted revenue, whichever is
less.
(2) The renewal fee collected by the board under this
subsection shall be deposited into the General Fund.
(3) If a licensed operator fails to pay the renewal fee
required under this subsection, the board shall suspend or
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revoke the licensed operator's fantasy contest license until
payment of the renewal fee is received.
§ 325. Conditions of licensure.
As a condition of licensure, a licensed operator shall
establish and implement the following reasonable procedures
related to conduct of fantasy contests in this Commonwealth:
(1) Permit only participants who have established a
fantasy contest account with the licensed operator to
participate in a fantasy contest conducted by the licensed
operator.
(2) Verify the age, location and identity of a
participant prior to making a deposit into a fantasy contest
account for a participant located in this Commonwealth. No
individual under 18 years of age may be permitted to
establish a fantasy contest account with a licensed operator.
(3) Verify the identity of a participant by requiring
the participant to provide the licensed operator a unique
username and password prior to accessing a fantasy contest
account.
(4) Ensure rules and prizes and awards established by
the licensed operator for a fantasy contest are made known to
a participant prior to the acceptance of an entry fee.
(5) Ensure that a player who is the subject of a fantasy
contest is restricted from entering as a participant in a
fantasy contest that is determined, in whole or in part, on
the accumulated statistical results of a team of individuals
in the league in which the player is a member.
(6) Allow an individual to self-exclude from entering a
fantasy contest or accessing a fantasy contest account for a
specific period of time as determined by the participant and
implement reasonable procedures to prevent the individual
from participating in the licensed operator's fantasy
contests.
(7) Allow a participant or other person to restrict the
total amount of deposits that the participant may pay to the
licensed operator for a specific time period established by
the participant and implement reasonable procedures to
prevent the participant from exceeding the limit.
(8) Conspicuously post compulsive and problem play
notices at fantasy contest registration points and provide a
toll-free telephone number to participants who have expressed
to the licensed operator issues with compulsive and problem
play of fantasy contests. The toll-free telephone number and
the compulsive and problem play notice shall be approved by
the board, in consultation with the Department of Drug and
Alcohol Programs or successor agency.
(9) Disclose the number of entries a single participant
may submit to each fantasy contest and take steps to prevent
participants from submitting more than the allowable number.
(10) Prevent the licensed operator's principals,
employees and relatives living in the same household of an
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employee or principal from competing in a fantasy contest
offered by any licensed operator to the general public and in
which fantasy contest the licensed operator offers a prize or
award.
(11) Prevent the sharing of confidential information
that could affect fantasy contest play with third parties
until the information is made publicly available.
(12) Take steps to maintain the confidentiality of a
participant's personal and financial information.
(13) Segregate participant funds from operational funds
in separate accounts and maintain a reserve in the form of
cash, cash equivalents, security deposits held by banks and
processors, an irrevocable letter of credit, payment
processor reserves and receivables, a bond or a combination
thereof in an amount sufficient to pay all prizes and awards
offered to winning participants. To satisfy this paragraph, a
licensed operator that only offers season-long fantasy
contests that generate less than $250,000 in season-long
fantasy contest adjusted revenue may contract with a third
party to hold prizes and awards in an escrow account until
after the season is concluded and prizes and awards are
distributed.
(14) Provide winning in-State participants with
information and documentation necessary to ensure the proper
reporting of winnings by in-State participants to the
department.
(15) Remit taxes or assessments to the department in
accordance with sections 331 (relating to fantasy contest
tax), 332 (relating to licensed operator deposits) and 333
(relating to responsibility and authority of department).
(16) Prohibit the use of scripts by participants and
implement technologies to prevent the use of scripts.
(17) Monitor fantasy contests for the use of scripts and
restrict players found to have used scripts from
participation in future fantasy contests.
(18) Establish conditions deemed appropriate by the
board.
§ 326. Prohibitions.
(a) General rule.--No licensed operator may:
(1) accept an entry fee from or permit a natural person
under 18 years of age to become a participant in a fantasy
contest;
(2) offer a fantasy contest based, in whole or in part,
on collegiate or high school events or players;
(3) permit a participant to enter a fantasy contest
prior to establishing a fantasy contest account;
(4) establish a fantasy contest account for a person who
is not an individual;
(5) alter rules established for a fantasy contest after
a participant has entered the fantasy contest;
(6) issue credit to a participant to establish or fund a
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fantasy contest account;
(7) knowingly directly market to an individual during
the time period in which the individual has self-excluded
from the licensed operators' fantasy contests;
(8) knowingly permit an individual to enter the licensed
operator's fantasy contests during the time period in which
individual has self-excluded from the licensed operators'
fantasy contests;
(8.1) knowingly allow a self-excluded individual to keep
a prize or award.
(9) knowingly accept a deposit in excess of a limit
established by a participant for the specific time period
established by the participant;
(10) share confidential information that could affect
fantasy contest play with third parties until the information
is made publicly available;
(11) knowingly permit a principal, an employee or a
relative living in the same household of an employee or
principal to become a participant in a fantasy contest
offered by a licensed operator in which a licensed operator
offers a prize or award;
(12) offer a fantasy contest where:
(i) the value of all prizes or awards offered to
winning participants is not established and made known to
participants in advance of the fantasy contest;
(ii) winning outcomes do not reflect the relative
knowledge and skill of participants;
(iii) the winning outcome is based on the score,
point spread or performance of a single actual team or
combination of teams or solely on a single performance of
an individual athlete or player in a single actual event;
or
(iv) the winning outcome is not based on statistical
results accumulated from fully completed athletic sports
contests or events, except that participants may be
credited for statistical results accumulated in a
suspended or shortened sports event which has been
partially completed on account of weather or other
natural or unforeseen event;
(13) fail to remit taxes or assessments to the
department in accordance with sections 331 (relating to
fantasy contest tax), 332 (relating to licensed operator
deposits) and 333 (relating to responsibility and authority
of department);
(14) knowingly allow a participant to use a script
during a fantasy contest; and
(15) perform another action prohibited by the board.
(b) Deposit.--The licensed operator shall deposit the amount
of the prize or award under subsection (a)(8.1) in the General
Fund.
§ 327. Change in ownership or control of licensed operators.
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(a) Notification and approval.--
(1) A licensed operator shall notify the board upon
becoming aware of a proposed change of ownership of the
licensed operator by a person or group of persons acting in
concert which involves any of the following:
(i) More than 15% of a licensed operator's
securities or other ownership interests.
(ii) The sale other than in the ordinary course of
business of a licensed operator's assets.
(iii) Another transaction or occurrence deemed by
the board to be relevant to fantasy contest license
qualifications.
(2) Notwithstanding the provisions of paragraph (1), a
licensed operator shall not be required to notify the board
of any acquisition by an institutional investor under
paragraph (1)(i) or (ii) if the institutional investor holds
less than 20% of the securities or other ownership interests
referred to in paragraph (1)(i) or (ii), the securities or
interests are publicly traded securities and its holdings of
the securities were purchased for investment purposes only
and the institutional investor files with the board a
certified statement to the effect that the institutional
investor has no intention of influencing or affecting,
directly or indirectly, the affairs of the licensed operator,
except that the institutional investor may vote on matters
put to the vote of the outstanding security holders. Notice
to the board shall be required prior to completion of a
proposed or contemplated change of ownership of a licensed
operator that meets the criteria of this section.
(b) Qualification of purchaser and change of control.--
(1) A purchaser of the assets, other than in the
ordinary course of business, of a licensed operator shall
independently qualify for a fantasy contest license in
accordance with this chapter and shall pay the application
fee and license fee as required by sections 322 (relating to
application) and 323 (relating to issuance and denial of
license), except that if the purchaser of assets is another
licensed operator, the purchaser of assets shall not be
required to requalify for a fantasy contest license or pay
another application fee and license fee.
(2) A change in control of a licensed operator shall
require that the licensed operator independently qualify for
a fantasy contest license in accordance with this chapter,
and the licensed operator shall pay a new initial application
and license fee as required by sections 322 and 323, except
that if the new controller is another licensed operator, the
new controller shall not be required to requalify for a
fantasy contest license or pay another application fee and
license fee.
(c) Change in control defined.--For purposes of this
section, a change in control of a licensed operator shall mean
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the acquisition by a person or group of persons acting in
concert of more than 20% of a licensed operator's securities or
other ownership interests, with the exception of an ownership
interest of the person that existed at the time of initial
licensing and payment of the initial fantasy contest license
fee, or more than 20% of the securities or other ownership
interests of a corporation or other form of business entity that
owns directly or indirectly at least 20% of the voting or other
securities or other ownership interests of the licensed
operator.
(d) License revocation.--Failure to comply with this section
may cause the fantasy contest license issued under this chapter
to be revoked or suspended by the board unless the purchase of
the assets or the change in control that meets the criteria of
this section has been independently qualified in advance by the
board and a required application or license fee has been paid.
§ 328. Penalties.
(a) Suspension or revocation of license.--
(1) After a public hearing with at least 15 days'
notice, the board may suspend or revoke a licensed operator's
fantasy contest license in a case where a violation of this
chapter has been shown by a preponderance of the evidence.
(2) The board may revoke a fantasy contest license if
the board finds that facts not known by the board at the time
the board considered the application indicate that the
license should not have been issued.
(b) Administrative penalties.--
(1) In addition to suspension or revocation of a fantasy
contest license, the board may impose administrative
penalties on a licensed operator for violations of this
chapter not to exceed $5,000 for each violation.
(2) A violation of this chapter that is determined to be
an offense of a continuing nature shall be deemed to be a
separate offense on each event or day during which the
violation occurs, except that the total administrative
penalty for an offense of a continuing nature may not exceed
$25,000.
(3) The licensed operator shall have the right to appeal
administrative penalties in accordance with 2 Pa.C.S. Chs. 5
Subch. A (relating to practice and procedure of Commonwealth
agencies) and 7 Subch. A (relating to judicial review of
Commonwealth agency action).
(4) Penalties imposed under this subsection shall be
deposited into the General Fund.
(c) Civil penalties.--
(1) In addition to the provisions of this section, a
person who knowingly violates a provision of this chapter
shall be liable for a civil penalty of not more than $1,000
for each violation.
(2) The civil penalty shall be recovered in a civil
action brought by the board and shall be paid into the
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General Fund.
SUBCHAPTER D
FISCAL PROVISIONS
Sec.
331. Fantasy contest tax.
332. Licensed operator deposits.
333. Responsibility and authority of department.
§ 331. Fantasy contest tax.
(a) Imposition.--Each licensed operator shall report to the
department and pay from its quarterly fantasy contest adjusted
revenues, on a form and in the manner prescribed by the
department, a tax of 12% of its quarterly fantasy contest
adjusted revenues.
(b) Deposits and distributions.--
(1) The tax imposed under subsection (a) shall be
payable to the department on a quarterly basis and shall be
based upon quarterly fantasy contest adjusted revenue derived
during the previous quarter.
(2) All funds owed to the Commonwealth under this
section shall be held in trust for the Commonwealth by the
licensed operator until the funds are paid to the department.
(3) The tax imposed under subsection (a) shall be
deposited into the General Fund.
(c) Penalty.--
(1) A licensed operator who fails to timely remit to the
department amounts required under this section shall be
liable, in addition to liability imposed in this chapter, to
a penalty of 5% per month up to a maximum of 25% of the
amounts ultimately found to be due, to be recovered by the
department.
(2) Penalties imposed under this subsection shall be
deposited in the General Fund.
§ 332. Licensed operator deposits.
(a) Accounts established.--The State Treasurer shall
establish within the State Treasury an account for each licensed
operator for the deposit of sums required under subsection (b)
to:
(1) recover costs or expenses incurred by the board and
the department in carrying out their powers and duties under
this chapter based upon a budget submitted by the board and
the department under subsection (c); and
(2) repay any loans made by the General Fund to the
board or the department in connection with carrying out their
powers and duties under this chapter.
(b) Deposits.--
(1) The department shall determine the appropriate
assessment amount for each licensed operator, which shall be
a percentage assessed on the licensed operator's fantasy
contest adjusted revenues. Each licensed operator shall
deposit funds into its account on a quarterly basis.
(2) The percentage assessed shall not exceed an amount
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necessary to:
(i) recover costs or expenses incurred by the board
and the department in carrying out powers and duties
under this chapter based on a budget submitted by the
board and the department under subsection (c); and
(ii) repay loans made from the General Fund to the
board in connection with carrying out its powers and
duties under this chapter.
(c) Itemized budget reporting.--
(1) The board and the department shall prepare and
annually submit to the chairman and minority chairman of the
Appropriations Committee of the Senate and the chairman and
minority chairman of the Appropriations Committee of the
House of Representatives an itemized budget consisting of
amounts to be appropriated out of the accounts established
under this section necessary to administer this chapter.
(2) As soon as practicable after submitting copies of
the itemized budget, the board and the department shall
prepare and submit to the chairman and minority chairman of
the Appropriations Committee of the Senate and the chairman
and minority chairman of the Appropriations Committee of the
House of Representatives analyses of and make recommendations
regarding the itemized budgets.
(d) Appropriation.--Costs and expenses from accounts
established under subsection (a) shall only be disbursed upon
appropriation by the General Assembly.
(e) Penalty.--
(1) A licensed operator who fails to timely remit to the
department amounts required under this section shall be
liable, in addition to liability imposed in this chapter, to
a penalty of 5% per month up to a maximum of 25% of the
amounts ultimately found to be due, to be recovered by the
department.
(2) Penalties imposed under this subsection shall be
deposited into the General Fund.
§ 333. Responsibility and authority of department.
(a) General rule.--The department may administer and collect
taxes imposed under section 331 (relating to fantasy contest
tax) and interest imposed under section 806 of the act of April
9, 1929 (P.L.343, No.176), known as The Fiscal Code, and
promulgate and enforce rules and regulations to carry out its
prescribed duties in accordance with sections 331 and 332
(relating to licensed operator deposits), including the
collection of taxes, penalties, assessments and interest.
(b) Procedure.--For purposes of implementing sections 331
and 332, the department may promulgate regulations in the same
manner in which the board is authorized as provided in section
312 (relating to temporary regulations).
SUBCHAPTER E
MISCELLANEOUS PROVISIONS
Sec.
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341. Applicability of other statutes.
342. Licensed gaming entities.
343. Funding.
§ 341. Applicability of other statutes.
(a) Unlawful gambling.--The provisions of 18 Pa.C.S. § 5513
(relating to gambling devices, gambling, etc.) shall not apply
to a fantasy contest conducted in accordance with this chapter.
(b) Pool selling and bookmaking.--The provisions of 18
Pa.C.S. § 5514 (relating to pool selling and bookmaking) shall
not apply to a fantasy contest conducted in accordance with this
chapter.
(c) Lotteries.--The provisions of 18 Pa.C.S. § 5512
(relating to lotteries, etc.) shall not apply to a fantasy
contest conducted in accordance with this chapter.
(d) State Lottery Law.--This chapter shall not apply to a
fantasy contest or similar product authorized under the act of
August 26, 1971 (P.L.351, No.91), known as the State Lottery
Law, and authorized solely by the department and the Division of
the State Lottery or iLottery under section 703 (relating to
iLottery authorization).
§ 342. Licensed gaming entities.
(a) Scope.--This section shall apply to a licensed gaming
entity that holds a fantasy contest license.
(b) Applicability.--Nothing in this chapter shall be
construed to limit the board's general and sole regulatory
authority over the conduct of gaming or related activities under
Part II (relating to gaming), including, but not limited to, the
certification, registration and regulation of gaming service
providers and individuals and entities associated with them.
(c) Restricted contests.--A licensed gaming entity may offer
fantasy contests that are exclusive to participants who are at
least 21 years of age.
(d) Promotional play.--For a restricted contest under
subsection (c), a licensed gaming entity may offer slot machine
promotional play or table game match play to a participant who
is at least 21 years of age as a prize or award or for
participating in a fantasy contest conducted by the licensed
gaming entity.
(e) Gaming service providers.--A licensed operator who is
not a licensed gaming entity may, at the discretion of the
board, be certificated or registered as a gaming service
provider under section 1317.2 (relating to gaming service
provider) in order to operate fantasy contests subject to the
restrictions of subsection (c) on behalf of a licensed gaming
entity.
§ 343. Funding.
(a) Appropriation.--The following amounts are appropriated:
(1) The sum of $1,250,000 is appropriated from the
General Fund to the board for the fiscal year period July 1,
2017, to June 30, 2018, for the purpose of implementing and
administering the provisions of this chapter.
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(2) The sum of $500,000 is appropriated from the General
Fund to the department for the fiscal period July 1, 2017, to
June 30, 2018, for the purpose of implementing and
administering the provisions of this chapter.
(b) Repayment.--The appropriations in this section shall be
considered loans from the General Fund and shall be repaid to
the General Fund quarterly through assessments on licensed
operators authorized under section 332 (relating to licensed
operator deposits) by the department. The total amounts
appropriated to the board and department under this section
shall be repaid to the General Fund no later than 10 years from
the date the board issues the first fantasy contest license.
(c) Unused amounts.--On July 1, 2018, any portion of amounts
appropriated under subsection (a) that is unexpended,
unencumbered or uncommitted as of June 30 of the prior fiscal
year shall automatically be