H0271B1942A04606 MSP:CMD 10/25/17 #90 A04606
AMENDMENTS TO HOUSE BILL NO. 271
Sponsor: SENATOR CORMAN
Printer's No. 1942
Amend Bill, page 2, lines 2 through 59, by striking out all
of said lines and inserting
Amending Titles 3 (Agriculture) and 4 (Amusements) of the
Pennsylvania Consolidated Statutes, extensively revising
gaming provisions as follows:
In Title 3:
for horse racing, in the area of race horse industry
reform.
In Title 4:
for amusements generally, in the areas of fantasy
contests, of lottery and of iLottery;
for gaming, in the areas of general provisions, of
Pennsylvania Gaming Control Board, of licensees, of table
games, of interactive gaming, of revenues, of administration
and enforcement and of miscellaneous provisions; and
providing for video gaming.
Providing, as to the revisions:
for related repeals.
Repealing a provision related to keno in the State Lottery
Law.
Amend Bill, page 211, lines 19 through 30; pages 212 through
674, lines 1 through 30; page 675, lines 1 through 14; by
striking out all of said lines on said pages and inserting
Section 1. Section 9313 of Title 3 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 9313. Budget.
Beginning July 1, 2016, the commission and the Department of
Agriculture shall annually submit a budget request to the
Secretary of the Budget in accordance with the provisions
contained in section 610 of the act of April 9, 1929 (P.L.177,
No.175), known as The Administrative Code of 1929, consisting of
amounts to be appropriated from the State Racing Fund, the
Pennsylvania Race Horse Development Trust Fund and the General
Fund to administer and enforce this chapter and for the
promotion of horse racing. Beginning July 1, 2016, and annually
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thereafter, 1% of the previous fiscal year's deposits into the
Pennsylvania Race Horse Development Trust Fund shall be
transferred from the Pennsylvania Race Horse Development Trust
Fund to the State Racing Fund to provide for the promotion of
horse racing.
Section 1.1. Section 9330(f) of Title 3 is repealed:
§ 9330. Place and manner of conducting pari-mutuel wagering at
racetrack enclosure.
* * *
[(f) Primary market area.--
(1) A licensed racing entity or secondary pari-mutuel
organization may not accept a wager or establish electronic
wagering or advanced deposit account wagering for any person
located in the primary market area of a racetrack, other than
the racetrack at which the licensed racing entity is
conducting a horse race meeting.
(2) Nothing in this subsection shall be construed to
prohibit a licensed racing entity from accepting a wager from
or establishing an electronic wagering account for any person
located in the primary market area of the racetrack where the
licensed racing entity is conducting a horse race meeting. If
two tracks share the primary market area, both racetracks
shall have equal rights to the market in the shared area.]
Section 1.2. Sections 9352(3) and (4), 9356(b)(2) and (10)
and 9374(a) of Title 3 are amended to read:
§ 9352. Licensing costs and fees.
Costs and fees are as follows:
* * *
(3) Initial license fee:
(i) The fee for an electronic wagering license under
section 9351(a) (relating to general license
requirements) shall be [$500,000] $50,000. If an
applicant that is also a Category 1 slot machine licensee
or its corporate successor or affiliate paid the license
fee under 4 Pa.C.S. § 1209 (relating to slot machine
license fee), the fee required under this paragraph shall
be deemed paid. A fee paid under this paragraph shall be
deposited in the State Racing Fund, or, in the case of a
deemed payment, transferred to the State Racing Fund upon
certification of the Secretary of the Budget.
(ii) The fee for an initial totalisator or racing
vendor license under section 9351(a.1) shall be $25,000
and shall be deposited in the State Racing Fund.
(4) License renewal fee:
(i) The fee for an electronic wagering license
renewal under section 9351(b)(2) shall be [$100,000]
$10,000. If an existing licensee under this section that
is also a Category 1 slot machine licensee or its
corporate successor or an affiliate paid the license fee
under 4 Pa.C.S. § 1209, the fee required under this
paragraph shall be deemed paid. A license renewal may not
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be issued until receipt of the license renewal fee. The
license fee shall be deposited into the State Racing
Fund, or, in the case of a deemed payment, it shall be
transferred to the State Racing Fund.
(ii) The fee for the renewal of a totalisator or
racing vendor license under section 9351(b)(1) shall be
$5,000 and shall be deposited in the State Racing Fund.
* * *
§ 9356. Operations.
* * *
(b) Requirements.--
* * *
(2) A licensee shall [enter into an agreement with each
licensed racing entity in this Commonwealth on whose races
the licensee offers wagering regarding payment of host fees
and any other applicable fees, costs or payments of any kind
to be paid to the licensed racing entity. The licensed racing
entity and the applicable horsemen's organization shall
negotiate a separate agreement for contributions to the purse
account.] contribute to the purse account in accordance with
section 9331(d) (relating to pari-mutuel wagering at
nonprimary locations).
* * *
(10) The information supplied by the account holder
shall be verified by the licensee using means acceptable to
the commission. [A secondary pari-mutuel organization must
verify that the account holder does not reside within the
primary market area of a licensed racing entity.]
* * *
§ 9374. Costs of enforcement of medication rules or
regulations.
(a) Authorization.--Beginning July 1, 2016, and each year
thereafter, the General Assembly shall authorize the transfer of
funds from the Pennsylvania Race Horse Development Trust Fund to
the State Racing Fund to provide for each cost associated with
the collection and research of and testing for medication, which
shall include the cost of necessary personnel, equipment,
supplies and facilities, except holding barns or stables, to be
located at horse race facilities, grounds or enclosures or at
other locations designated by the commission. All such costs
shall be reviewed and approved by the commission. The transfer
shall be made in 52 equal weekly installments during the fiscal
year before any other distribution from the Pennsylvania Race
Horse Development Trust Fund.
* * *
Section 1.4. Title 4 is amended by adding a part to read:
PART I
AMUSEMENTS GENERALLY
Chapter
1. Preliminary Provisions (Reserved)
3. Fantasy Contests
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5. Lottery
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:
"Applicant." A person who, on his own behalf or on behalf of
another, is applying for permission to engage in any act or
activity which is regulated under the provisions of this
chapter. If the applicant is a person other than an individual,
the board shall determine the associated persons whose
qualifications are necessary as a precondition to the licensing
of the applicant.
"Beginner." A participant who has entered fewer than 51
contests offered by a single licensed operator or who does not
meet the definition of a highly experienced player.
"Board." The Pennsylvania Gaming Control Board.
"Bureau." The Bureau of Investigations and Enforcement of
the board.
"Conduct of gaming." As defined in section 1103 (relating to
definitions).
"Controlling interest." Either of the following:
(1) For a publicly traded domestic or foreign
corporation, partnership, limited liability company or other
form of publicly traded legal entity, 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
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by clear and convincing evidence.
(2) For a privately held domestic or foreign
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." As follows:
(1) An online fantasy or simulated game or contest with
an entry fee and a prize or award in which:
(i) The value of all prizes or awards offered to
winning participants is established and made known to
participants in advance of the contest and the value is
not determined by the number of participants or the
amount of any fees paid by those participants.
(ii) 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.
(iii) 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.
(2) The term does not include social fantasy contests.
"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 board
authorizing a person to offer fantasy contests in this
Commonwealth in accordance with this chapter.
"Fantasy contest terminal." A computerized or electronic
terminal or similar device within a licensed facility that
allows participants to:
(1) register for a fantasy contest account;
(2) pay an entry fee;
(3) select athletes for a fantasy contest;
(4) receive winnings; or
(5) otherwise participate in a fantasy contest.
"Gaming service provider." As defined in section 1103.
"Highly experienced player." As follows:
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(1) Any participant who has:
(i) entered more than 1,000 fantasy contests; or
(ii) won more than three fantasy contest prizes or
awards valued at $1,000 or more.
(2) Once a participant is classified as a highly
experienced player, a player shall remain classified as a
highly experienced player.
"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.
The term includes an individual who pays an entry fee through a
fantasy contest terminal within a licensed facility.
"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.
"Institutional investor." As defined in section 1103.
"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 or who is empowered to
make discretionary decisions that regulate fantasy contest
operations as determined by the board.
"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 board to engage in an act or activity
which is regulated under this chapter regarding a matter before,
or which may be reasonably be expected to come before, the
board.
"Licensed facility." As defined in section 1103.
"Licensed gaming entity." As defined in section 1103.
"Licensed operator." A person who holds a fantasy contest
license.
"Licensee." A licensed operator, a principal or key employee
of a licensed operator.
"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 any
other form of legal business entity.
"Principal." An officer, director or 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, a 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
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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 requirements under
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 list of commands that a fantasy-contest-related
computer software program can execute that is created by a
participant or third party not approved by the licensed operator
to automate 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.
"Social fantasy contest." A fantasy contest which meets one
or more of the following criteria:
(1) Nothing is offered to participants other than game-
based virtual currency that cannot be redeemed for cash,
merchandise or anything of value outside the context of game
play.
(2) The contest is free to all participants.
(3) The entity offering the contest receives no
compensation, other than an administrative fee for the
maintenance of statistical information, in connection with
the contest.
(4) The winnings offered are of no greater value than
the lowest individual fee charged to a single participant for
entering or participating in the contest.
(5) The contest encompasses an entire season of the
activity in which the underlying competition is being
conducted and the winnings offered, if any, are determined by
agreement of the participants only in order to distribute
fully the participants' contributions to a fund established
to grant the winnings for the contest.
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"Suspicious transaction." A transaction between a licensed
operator or an employee of a licensed operator and an individual
that involves the acceptance or redemption by a person of cash
or cash equivalent involving or aggregating $5,000 or more which
a licensed operator or employee of a licensed operator knows,
suspects or has reason to believe:
(1) involves funds derived from illegal activities or is
intended or conducted in order to conceal or disguise funds
or assets derived from illegal activities;
(2) is part of a plan to violate or evade a law or
regulation to avoid a transaction reporting requirement under
the laws or regulations of the United States or this
Commonwealth, including a plan to structure a series of
transactions to avoid a transaction reporting requirement
under the laws of the United States or this Commonwealth; or
(3) had no apparent lawful purpose or is not the type of
transaction in which a person would normally be expected to
engage and the licensed operator or employee knows of no
reasonable explanation for the transaction after examining
the available facts, including the background and possible
purpose of the transaction.
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 general and sole regulatory
authority over the conduct of fantasy contests and related
activities as described in this chapter. The board shall
ensure the integrity of fantasy contests offered in this
Commonwealth.
(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
specific powers:
(1) At the board's discretion, to issue, approve, renew,
revoke, suspend, condition or deny issuance of licenses under
this chapter.
(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
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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 period beginning July 1 of the following fiscal 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
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 and licensees to submit
to fingerprinting by the Pennsylvania State Police or an
authorized agent of the Pennsylvania State Police. The
Pennsylvania State Police or authorized agent of the
Pennsylvania State Police shall submit the fingerprints to
the Federal Bureau of Investigation for purposes or 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 and licensees to submit
photographs consistent with the standards established by the
board.
(7.3) To require licensed operators to maintain an
office or place of business within this Commonwealth.
(7.4) To exempt certain prospective and existing
employees or independent contractors from the requirements
under paragraphs (7.1) and (7.2) that are not inconsistent
with the proper regulation of fantasy contests under this
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chapter.
(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 any 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) contract with a certified public accountant to
conduct an annual 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) contract with a testing laboratory approved by
the board to annually 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-
free telephone number that provides individuals with
information on how to access appropriate treatment services.
(12) To promulgate regulations regarding the placement
and operation of fantasy contest terminals within licensed
facilities and to ensure the integrity of fantasy contest
terminals.
(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 a registration 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 to require any
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additional permits or licenses not specifically enumerated in
this chapter.
§ 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 the publication of temporary
regulations. The board may promulgate temporary regulations not
subject to:
(1) Sections 201, 202, 203, 204 and 205 of the act of
July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(2) Section 204(b) of the act of October 15, 1980
(P.L.950, No.164), known as the Commonwealth Attorneys Act.
(3) The act of June 25, 1982 (P.L.633, No.181), known as
the Regulatory Review Act.
(b) Expiration.--Except for temporary regulations concerning
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 publication of temporary
regulations. Regulations adopted after this period shall be
promulgated as provided by law.
§ 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 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 available 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 such
other files and records as it may deem appropriate.
(d) Confidentiality of information.--
(1) The following information submitted by an applicant
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for a fantasy contest license under section 322 (relating to
application) or otherwise obtained by the board or the bureau
as part of a background 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 or licensee.
(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
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) Except as provided in paragraph (1), no claim of
confidentiality shall 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) Except as provided in paragraph (1), no claim of
confidentiality shall be made regarding a record in
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possession of the board that is otherwise publicly available
from the board under the act of February 14, 2008 (P.L.6,
No.3), known as the Right-to-Know Law.
(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 such 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 any other action of the board.
(e) Notice.--Notice of the contents of any 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.
(f) Information held by department.--Files, records, reports
and other information in the possession of the department
pertaining to licensed operators or applicants 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.
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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 in subsection (b), no
person may offer or otherwise make available for play in this
Commonwealth a fantasy contest without a fantasy contest
license.
(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
or licensed operator is or may be in violation of the
provisions of this chapter.
(2) The board requires the person to suspend the
operation of a fantasy contest until the fantasy contest
license is issued or renewed.
§ 322. Application.
(a) Form and information.--An application for a fantasy
contest license shall be submitted on a form and in manner as
shall be required by the board. An application for a fantasy
contest license shall contain the following information:
(1) (i) if the applicant is an individual, the name,
Federal employer identification number and business
address of the applicant;
(ii) if the applicant is a corporation, the name and
business address of the corporation, the state of its
incorporation and the full name and business address of
each officer and director thereof;
(iii) if the applicant is a foreign corporation, the
name and business address of the corporation, whether it
is qualified to do business in this Commonwealth and the
full name and business address of each officer and
director thereof; and
(iv) if the applicant is a partnership or joint
venture, the name and business address of each officer
thereof.
(2) The name and business address of the person having
custody of the applicant's financial records.
(3) The names and business addresses of the applicant's
key employees.
(4) The names and business 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
stability, 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
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to conditions of licensure).
(7) Any other information required by the board.
(b) Nonrefundable application fee.--Each application
submitted under this chapter shall be accompanied by a
nonrefundable application fee, which shall be established by the
board, and which may not exceed the amount necessary to
reimburse the board for all costs incurred by the board for
fulfilling the requirements of this section and section 323
(relating to issuance and denial of license).
(c) Additional information.--A person applying for a fantasy
contest license shall have an ongoing 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 applicants 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 fantasy contest license and may 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 an application for a fantasy
contest license under subsection (b).
(b) Reasons to deny applications.--The board may deny an
application for a fantasy contest license if the applicant:
(1) has knowingly made a false statement of material
fact in the application or has deliberately failed to
disclose any information requested;
(2) employs a principal or key employee who has been
convicted in any jurisdiction of any of the following:
(i) a felony;
(ii) an offense under the laws of another
jurisdiction which, if committed in this Commonwealth,
would be subject to imprisonment for more than five
years; or
(iii) a misdemeanor gambling offense, unless 15
years have elapsed from the date of conviction for the
offense.
(3) has at any time knowingly failed to comply with the
provisions of this chapter or of any requirements of the
board;
(4) has had a registration, permit or license to conduct
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fantasy contests denied or revoked in any other jurisdiction;
(5) has legally defaulted in the payment of any
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.
(7) is found by the board to be unsuitable for licensure
or inimicable to the interest of the Commonwealth to offer
fantasy contests in this Commonwealth.
(c) Time period for review.--The board shall conclude its
review of an application for a fantasy contest license within
120 days of receipt of the completed application. If the fantasy
contest license is not issued, the board shall provide the
applicant with the justification for not issuing the fantasy
contest license.
(d) License fee.--
(1) Within 30 days of the board issuing a fantasy
contest license, a successful applicant shall pay to the
board a license fee of $50,000.
(2) The license fee collected under this subsection
shall be deposited into the General Fund.
(3) If a licensed operator fails to pay the fee required
by this subsection, the board shall suspend or revoke the
licensed operator'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 under Chapter 13 (relating to
licenses) and table game operation certificate under Chapter 13A
(relating to table games) are in good standing.
§ 324. License renewal.
(a) Renewal.--
(1) A fantasy contest license issued under this chapter
shall be valid for a period of five years.
(2) Nothing in this subsection shall be construed to
relieve a licensed operator of the affirmative duty to notify
the board of any changes relating to the status of its
fantasy 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 180 days prior to the
expiration of the fantasy contest 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 fantasy contest license.
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(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 licensed operator or the licensed operator's
key employees or principals are in violation of any
provision of this chapter;
(ii) the licensed operator has furnished the board
with false or misleading information;
(iii) the information contained in the licensed
operator's initial application or any renewal application
is no longer true and correct;
(iv) the licensed operator 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 licensed operator 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 licensed operator'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 licensed
operator's authorization to conduct fantasy contests shall
immediately cease until the board has notified the licensed
operator 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 $10,000.
(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
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, the board shall require each
licensed operator to establish and implement procedures to
govern the conduct of fantasy contests in this Commonwealth. The
procedures, at a minimum, shall:
(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 any
participant prior to making a deposit into a fantasy contest
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account for a participant located in this Commonwealth
according to regulations established by the board. No
participant 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
user name 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 any entry fee and
prize and award values are not determined by the number of
participants nor the amount of any fees paid by those
participants.
(4.1) Develop and offer fantasy contests that are
limited to beginners as follows:
(i) Except as provided in subparagraph (ii), a
licensed operator shall prohibit participants who are not
beginners from participating, directly or through another
person as a proxy, in beginner fantasy contests.
(ii) A licensed operator may allow a participant who
is not a beginner to enter up to 10 beginner fantasy
contests in any sport in which that participant has not
already entered 20 fantasy contests.
(iii) A licensed operator shall suspend the account
of a participant who is not a beginner, except as
provided for in subparagraph (ii), that enters a beginner
fantasy contest and shall ban the participant from
further participation in beginner fantasy contests
offered by the licensed operator.
(4.2) Develop and offer fantasy contests in which highly
experienced players cannot, either directly or through
another person as a proxy, participate. A licensed operator
shall suspend the account of any highly experienced player
who enters a fantasy contest which excludes highly
experienced players, directly or through another person as a
proxy, and shall ban the individual from further
participation in fantasy contests offered by the licensed
operator.
(4.3) Establish a procedure for receiving and responding
to participant complaints and reconciling a participant's
fantasy contest account. The licensed operator shall forward
to the board on a quarterly basis a copy of each complaint
received.
(4.4) Submit, in the manner as the board requires, a
description of the licensed operator's administrative and
accounting procedures in detail, including its written system
of internal control. Each written system of internal control
shall include:
(i) An organizational chart depicting appropriate
segregation of employee functions and responsibilities.
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(ii) A description of the duties and
responsibilities of each employee position shown on the
organizational chart.
(iii) A detailed narrative description of the
administrative and accounting procedures designed to
satisfy the requirements of this section.
(iv) Record retention policy.
(v) A statement signed by the chief financial
officer of the proposed licensed operator or other
competent person and the chief executive officer of the
proposed licensed operator or other competent person
attesting that the officers believe, in good faith, that
the system satisfies the requirements of this section.
(vi) Any other item that the board may require in
its discretion.
(4.5) File a report of any suspicious transaction with
the bureau. The following shall apply:
(i) A licensed operator or a person acting on behalf
of a licensed operator who knowingly fails to file a
report of a suspicious transaction commits a misdemeanor
of the third degree.
(ii) A licensed operator or a person acting on
behalf of a licensed operator who fails to file a report
or a person who causes another person required under this
section to fail to file a report of a suspicious
transaction shall be strictly liable for his actions and
may be subject to sanctions as determined by the board.
(iii) The bureau shall maintain a record of all
reports made under this paragraph for a period of five
years. The bureau shall make the reports available to any
Federal or State law enforcement agency without necessity
of subpoena.
(iv) A person who is required to file a report of a
suspicious transaction shall not notify an individual
suspected of committing the suspicious transaction that
the transaction has been reported. A person that violates
this subsection commits a misdemeanor of the third degree
and may be subject to sanctions as determined by the
board.
(v) A person who is required to file a report of a
suspicious transaction who in good faith makes the report
shall not be liable in any civil action brought by a
person for making the report, regardless of whether the
transaction is later determined to be suspicious.
(5) Ensure that an individual 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 part, on
the accumulated statistical results of a team of individuals
in the sport in which the individual is a member.
(6) Allow a person to restrict himself from entering a
fantasy contest or accessing a fantasy contest account for a
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specific period of time as determined by the participant and
implement procedures to prevent the person from participating
in the licensed operator's fantasy contests. The following
shall apply to self-exclusions:
(i) A person may request placement on the list of
self-excluded persons and agree that, during any period
of voluntary exclusion, the person may not collect any
winnings nor recover any losses resulting from any
fantasy contest activity.
(ii) Notwithstanding any other law to the contrary,
the board's list of self-excluded persons shall not be
open to public inspection. Nothing in this section shall
be construed to prohibit a licensed operator from
disclosing the identity of persons self-excluded under
this paragraph to affiliated licensed gaming entities or
licensed operators in this Commonwealth or other
jurisdictions for the limited purpose of assisting in the
proper administration of responsible programs operated by
affiliated licensed gaming entities or licensed
operators.
(7) Allow a 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 procedures to prevent the
participant from exceeding the limit.
(8) Conspicuously post compulsive and problem play
notices at fantasy contest registration points and provide
the toll-free telephone number to participants. 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 a successor
agency.
(9) Disclose the number of entries a single participant
may submit to each fantasy contest and take steps to prevent
such participants from submitting more than the allowable
number.
(10) Prohibit the licensed operator's principals,
employees and relatives living in the same household of an
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
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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
prohibit participants found to have used such scripts from
participation in future fantasy contests.
(18) Establish any other condition 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 athletic events or players;
(3) permit a participant to enter a fantasy contest
prior to establishing a fantasy contest account, unless the
licensed operator is also a licensed gaming entity and the
participant enters a fantasy contest through a fantasy
contest terminal located within the licensed gaming entity's
licensed facility;
(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
fantasy contest account;
(7) knowingly market to a participant during the time
period in which the participant has self-excluded from the
licensed operator's fantasy contests;
(8) knowingly permit a participant to enter the licensed
operator's fantasy contests during the time period in which
the participant has self-excluded from the licensed
operators' fantasy contests;
(8.1) knowingly allow a self-excluded person to keep a
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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 of a
licensed operator or a relative living in the same household
of an employee or principal of a licensed operator to become
a participant in a fantasy contest offered by any 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) the value of the prize or award is determined
by the number of participants or the amount of any fees
paid by those participants;
(iii) the winning outcome does not reflect the
relative knowledge and skill of participants;
(iv) 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
(v) 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;
(15) except as permitted under section 342 (relating to
licensed gaming entities), offer or make available in this
Commonwealth a fantasy contest terminal; and
(16) perform any other action prohibited by the board.
(b) Deposit.--The licensed operator shall forward the amount
of the prize or award under subsection (a)(8.1) to the board
which shall transfer the amount to the State Treasurer for
deposit in the General Fund.
§ 327. Change in ownership or control of licensed operators.
(a) Notification and approval.--
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