Florida Senate - 2011                                     SB 812
       
       
       
       By Senator Diaz de la Portilla
       
       
       
       
       36-00490A-11                                           2011812__
    1                        A bill to be entitled                      
    2         An act relating to Internet poker; creating the
    3         “Internet Poker Consumer Protection and Revenue
    4         Generation Act”; providing for intrastate Internet
    5         poker to be provided to the public by cardroom
    6         operators through a state Internet poker network
    7         operated by licensed Internet poker hub operators;
    8         creating s. 849.087, F.S.; providing legislative
    9         intent; providing definitions; authorizing
   10         participation in and operation of intrastate Internet
   11         poker; providing for the Division of Pari-mutuel
   12         Wagering of the Department of Business and
   13         Professional Regulation to administer the act and
   14         regulate the operation of a state Internet poker
   15         network, Internet poker hub operators, cardroom
   16         affiliates, and the playing of intrastate Internet
   17         poker; authorizing the division to adopt rules,
   18         conduct investigations and monitor operations, review
   19         books and accounts and records, suspend or revoke any
   20         license or permit for a violation, take testimony,
   21         issue summons and subpoenas, monitor and ensure the
   22         proper collection of taxes and fees, and monitor and
   23         ensure that the playing of Internet poker is conducted
   24         fairly and that player information is protected by
   25         Internet poker hub operators; requiring Internet poker
   26         hub operators to be licensed; providing qualifications
   27         and conditions for licensure; providing application
   28         requirements; providing for an advance payment to be
   29         credited toward taxes; providing initial and renewal
   30         license fees; providing for selection of Internet
   31         poker hub operators through competitive procurement
   32         process; requiring payment of certain costs and refund
   33         of amounts collected in excess of the cost; requiring
   34         a surety bond; providing for a contract between the
   35         state and the poker hub operator; requiring the
   36         division to annually determine the need for additional
   37         operators; providing for a cardroom affiliate license
   38         to be issued to a cardroom operator to provide
   39         intrastate Internet poker for play; providing for
   40         applications for the affiliate license and renewal
   41         thereof; providing conditions for licensure and
   42         renewal of licensure as an affiliate; requiring
   43         reporting to and approval by the division of a change
   44         of ownership of the affiliate licensee; prohibiting
   45         certain acts by an affiliate; providing a fee;
   46         providing for employee and business occupational
   47         licenses; requiring certain employees of and certain
   48         companies doing business with a cardroom affiliate or
   49         an Internet poker hub operator to hold an appropriate
   50         occupational license; prohibiting such operator or
   51         affiliate from employing or allowing to be employed
   52         such a person or doing business with such a company if
   53         that person or company does not hold an occupational
   54         license; directing the division to adopt rules
   55         regarding Internet poker hub operator, cardroom
   56         affiliate, and occupational licenses and renewal of
   57         such licenses; providing a fee for occupational
   58         license and renewal thereof; providing penalties for
   59         failure to pay the fee; exempting from licensure a
   60         person holding a valid individual cardroom
   61         occupational license; providing grounds for the
   62         division to deny an application for or revoke,
   63         suspend, or place conditions or restrictions on or
   64         refuse to renew such occupational license; requiring
   65         fingerprints; providing procedures for processing
   66         fingerprints and conducting a criminal history records
   67         check and for payment of costs; providing for
   68         citations and civil penalties; providing requirements
   69         to register and play intrastate Internet poker;
   70         providing for an Internet Poker Self-Exclusion Form;
   71         requiring the Internet poker hub operator to exclude
   72         from play any person who has completed such form;
   73         providing for maintenance of the form and distribution
   74         to cardroom affiliates and the division; requiring the
   75         Internet poker hub operator to display a link to the
   76         website offering services related to the prevention of
   77         compulsive and addictive gambling; limiting liability;
   78         providing requirements for approval of games to be
   79         offered to players; providing requirements for all
   80         offered games and game results and games not
   81         completed; providing requirements to minimize fraud
   82         and cheating; prohibiting action for damages against
   83         the Internet poker hub operator to prevent fraud or
   84         cheating under certain circumstances; providing
   85         requirements for player eligibility and registration
   86         and player accounts; authorizing the Internet poker
   87         hub operator to suspend or revoke player accounts;
   88         providing requirements for poker hub operations;
   89         requiring the Internet poker hub operator to establish
   90         a book of accounts, regularly audit financial records,
   91         and make the records available to the division;
   92         providing technical system requirements; requiring the
   93         Internet poker hub operator to define, document, and
   94         implement certain methodologies relating to its
   95         systems; requiring the Internet poker hub operator to
   96         maintain such documentation for a certain period of
   97         time; providing for player participation fees;
   98         prohibiting certain relationships and acts by
   99         employees of the division and occupational license
  100         holders and certain relatives; authorizing conduct of
  101         proposed and authorized games; prohibiting a person
  102         who has not attained a certain age from holding an
  103         Internet poker occupational license or engaging in any
  104         game conducted; prohibiting offering Internet poker to
  105         persons located in the state except in compliance with
  106         law; providing that an entity that has accepted any
  107         wager on any online gambling activity from a Florida
  108         resident since a certain date is not eligible to apply
  109         for licensure and participate in intrastate Internet
  110         poker in Florida for a specified period of time;
  111         prohibiting false statements; prohibiting manipulation
  112         of Internet poker play and operations; providing civil
  113         and criminal penalties; providing for disposition of
  114         fines collected; providing for license fees to be paid
  115         by the Internet poker hub operator and cardroom
  116         affiliates; providing for disposition and accounting
  117         of fees collected; providing for an advance payment by
  118         the Internet poker hub operator to be credited toward
  119         taxes; providing for the tax rate and procedures for
  120         payment; requiring payments to be accompanied by a
  121         report showing all intrastate Internet poker
  122         activities for the preceding calendar month and
  123         containing such other information as prescribed by the
  124         division; providing penalties for failure to pay taxes
  125         and penalties; providing for use of certain deposits;
  126         providing for distribution of moneys received from
  127         Internet poker hub operations; providing grounds for
  128         the division to deny a license or the renewal thereof
  129         or suspend or revoke a license; providing penalties;
  130         authorizing the division to adopt rules; providing for
  131         administration of the act and regulation of the
  132         intrastate Internet poker industry; providing an
  133         effective date.
  134  
  135  Be It Enacted by the Legislature of the State of Florida:
  136  
  137         Section 1. This act may be cited as the “Internet Poker
  138  Consumer Protection and Revenue Generation Act.”
  139         Section 2. Section 849.087, Florida Statutes, is created to
  140  read:
  141         849.087 Intrastate Internet poker authorized.—
  142         (1) LEGISLATIVE INTENT.—It is the intent of the Legislature
  143  to create a framework for the state to regulate intrastate
  144  Internet poker which can ensure consumer protections and
  145  additional revenue to the state by authorizing, implementing,
  146  and creating a licensing and regulatory structure and system of
  147  intrastate Internet poker to:
  148         (a) Provide that intrastate Internet poker is offered for
  149  play only in a manner that is lawful under the federal Unlawful
  150  Internet Gaming Enforcement Act of 2006, which authorizes a
  151  state to regulate and conduct intrastate Internet gambling, such
  152  as poker.
  153         (b) Provide a new source of revenue that will generate
  154  additional positive economic benefits to the state through the
  155  authorization of lawful and regulated intrastate Internet poker
  156  in Florida instead of flowing offshore to unregulated foreign
  157  operators and markets.
  158         (c) Create a contractual relationship with one or more
  159  Internet poker hub operators having the technical expertise to
  160  ensure that wagering authorized by this section is offered only
  161  to registered players who are at least 18 years of age and
  162  physically present within the borders of this state at the time
  163  of play.
  164         (d) Provide for a competitive procurement process to select
  165  one or more Internet poker hub operators that are qualified to
  166  be licensed by the state and meet all statutory, regulatory, and
  167  contractual requirements of the state while protecting
  168  registered poker players.
  169         (e) Provide for a licensed cardroom operator to become a
  170  licensed provider of intrastate Internet poker through Internet
  171  poker hub operators.
  172         (f) Ensure that the state is able to collect all taxes and
  173  fees from the play of intrastate Internet poker.
  174         (g) Create a system to protect each registered poker
  175  player’s private information and prevent fraud and identity
  176  theft and ensure that the player’s financial transactions are
  177  processed in a secure and transparent fashion.
  178         (h) Ensure that the regulatory agency has unlimited access
  179  to the premises and records of the Internet poker hub operators
  180  and cardroom affiliates to ensure strict compliance with its
  181  regulations concerning credit authorization, account access, and
  182  other security provisions.
  183         (i) Require the Internet poker hub operators to provide
  184  accessible customer service to registered poker players.
  185         (j) Require the Internet poker hub operator’s Internet site
  186  to contain information relating to problem gambling, including a
  187  telephone number that an individual may call to seek information
  188  and assistance for a potential gambling addiction.
  189         (2) DEFINITIONS.—Unless otherwise clearly required by the
  190  context, as used in this section:
  191         (a) “Authorized game” means a game or series of games of
  192  poker which are played in a nonbanking manner on a state
  193  Internet poker network.
  194         (b) “Cardroom affiliate” means a licensed cardroom operator
  195  as defined in s. 849.086 who maintains an Internet site as a
  196  portal into a state Internet poker network.
  197         (c) “Convicted” means having been found guilty, regardless
  198  of adjudication, as a result of a jury verdict, nonjury trial,
  199  or entry of a plea of guilty or nolo contendere.
  200         (d) “Department” means the Department of Business and
  201  Professional Regulation.
  202         (e) “Division” means the Division of Pari-mutuel Wagering
  203  of the department.
  204         (f) “Gross receipts” means the total amount of money
  205  received by an Internet poker hub operator from registered
  206  players for participation in authorized games.
  207         (g) “Internet poker hub operator” or “poker hub operator”
  208  means a computer system operator that is licensed by the state
  209  and contracts with the state to operate a state Internet poker
  210  network.
  211         (h) “Intrastate Internet poker” means authorized games of
  212  poker played over the Internet by registered players who are
  213  physically present within the borders of this state at the time
  214  of play.
  215         (i) “Liquidity” means the total number of registered
  216  players available in a state Internet poker network.
  217         (j) “Nonbanking game” means an authorized game in which an
  218  Internet poker hub operator or cardroom affiliate is not a
  219  participant and has no financial stake in the outcome of the
  220  authorized game.
  221         (k) “Player incentives” means any bonuses, rewards, prizes,
  222  or other types of promotional items provided to a registered
  223  player by an Internet poker hub operator or cardroom affiliate
  224  as an incentive to begin or continue playing on a state Internet
  225  poker network.
  226         (l) “Rake” means a set fee or percentage of the pot
  227  assessed by an Internet poker hub operator for providing the
  228  Internet poker services to registered players for the right to
  229  participate in an authorized game conducted by the poker hub
  230  operator.
  231         (m) “Registered player” means a person who is registered
  232  with a poker hub operator under this section to participate in
  233  an authorized game conducted on a state Internet poker network.
  234         (n) “State Internet poker network” means a computer system
  235  operated by one or more Internet poker hub operators which
  236  authorizes the playing of and wagering on intrastate Internet
  237  poker by registered players through the website portals of
  238  cardroom affiliates.
  239         (o) “Tournament fee” means a set fee assessed to registered
  240  players by an Internet poker hub operator for providing the
  241  Internet poker tournament services.
  242         (3) INTRASTATE INTERNET POKER AUTHORIZED.—
  243         (a) Under the Unlawful Internet Gaming Enforcement Act of
  244  2006, a state is authorized to regulate and conduct intrastate
  245  Internet poker as long as all players and the online wagering
  246  activities are located within the state.
  247         (b) Notwithstanding any other provision of law, a person in
  248  Florida may participate as a registered player in an authorized
  249  game or tournament provided on a state Internet poker network by
  250  a cardroom affiliate or may operate a state Internet poker
  251  network as an Internet poker hub operator described in this
  252  section if such game and poker operations are conducted strictly
  253  in accordance with the provisions of this section and federal
  254  law.
  255         (4) AUTHORITY OF DIVISION.—The division shall administer
  256  this section and regulate the operation of a state Internet
  257  poker network, the Internet poker hub operators, the cardroom
  258  affiliates, and the play of intrastate Internet poker under this
  259  section and the rules adopted pursuant to this section, and is
  260  authorized to:
  261         (a) Adopt rules related to Internet poker, including, but
  262  not limited to, rules governing the issuance of operator and
  263  individual occupational licenses to Internet poker hub
  264  operators, cardroom affiliates, and their employees; operation
  265  of a state Internet poker network and technical system
  266  requirements; security of the financial information of
  267  registered players and registered player accounts; bonuses,
  268  awards, promotions, and other incentives to registered players;
  269  recordkeeping and reporting requirements; the distribution of
  270  Internet poker income; and the imposition and collection of all
  271  fees and taxes imposed by this section.
  272         (b) Conduct investigations and monitor operation of a state
  273  Internet poker network and the playing of authorized games on a
  274  network.
  275         (c) Review the books, accounts, and records of any current
  276  or former Internet poker hub operator or cardroom affiliate.
  277         (d) Suspend or revoke any license or permit, after hearing,
  278  for any violation of this section or the rules adopted pursuant
  279  to this section.
  280         (e) Take testimony, issue summons and subpoenas for any
  281  witness, and issue subpoenas duces tecum in connection with any
  282  matter within its jurisdiction.
  283         (f) Monitor and ensure proper collection of taxes and fees
  284  imposed by this section. The internal controls of Internet poker
  285  hub operators shall ensure no compromise of revenue to the
  286  state. The division shall monitor, audit, and verify the cash
  287  flow and accounting of a state Internet poker network revenue
  288  for any given operating day.
  289         (g) Monitor and ensure that the playing of Internet poker
  290  is conducted fairly and that all personal and financial
  291  information provided by registered players is protected by the
  292  Internet poker hub operators.
  293         (5) INTERNET POKER HUB OPERATOR LICENSE REQUIRED;
  294  APPLICATION; FEES.—A person may not operate as an Internet poker
  295  hub operator in this state unless the person holds a valid
  296  Internet poker hub operator license issued under this section.
  297         (a) Only a person holding a valid Internet poker license
  298  issued by the division may provide intrastate Internet poker for
  299  play to registered players.
  300         (b) An Internet poker hub operator must be an entity
  301  authorized to conduct business in this state.
  302         (c) A person seeking a license or renewal of a license to
  303  operate as an Internet poker hub operator shall make application
  304  on forms prescribed by the division. Applications for Internet
  305  poker hub operator licenses shall contain all of the information
  306  the division, by rule, determines is required to ensure
  307  eligibility under this section.
  308         (d) As a condition of licensure and to maintain continued
  309  authority to conduct intrastate Internet poker, an Internet
  310  poker hub operator licensee must provide the documentation
  311  required under this section on a timely basis to the division
  312  and the documentation must be appropriate, current, and
  313  accurate. A change in ownership or interest of an Internet poker
  314  hub operator licensee of 5 percent or more of the stock or other
  315  evidence of ownership or equity in an Internet poker hub
  316  operator licensee or any parent corporation or other business
  317  entity that in any way owns or controls an Internet poker hub
  318  operator licensee must be approved by the division before the
  319  change, unless the owner is an existing holder of the license
  320  who was previously approved by the division. A change in
  321  ownership or interest of an Internet poker hub operator licensee
  322  of less than 5 percent, unless the change results in a
  323  cumulative total of 5 percent or more, must be reported to the
  324  division within 20 days after the change. The division may then
  325  conduct an investigation to ensure that the license is properly
  326  updated to show the change in ownership or interest. Reporting
  327  is not required under this paragraph if the person is holding 5
  328  percent or less of the equity or securities of a corporate owner
  329  of an Internet poker hub operator licensee that has its
  330  securities registered pursuant to s. 12 of the Securities
  331  Exchange Act of 1934, 15 U.S.C. ss. 78a-78kk, and if the
  332  corporation or entity files with the United States Securities
  333  and Exchange Commission the reports required by s. 13 of that
  334  act or if the securities of the corporation or entity are
  335  regularly traded on an established securities market in the
  336  United States. A change in ownership or interest of less than 5
  337  percent which results in a cumulative ownership or interest of 5
  338  percent or more must be approved by the division before the
  339  change, unless the owner is an existing holder of the license
  340  who was previously approved by the division.
  341         (e)1. Upon the awarding of a contract to be an Internet
  342  poker hub operator by the division under subsection (6), an
  343  Internet poker hub operator licensee shall pay to the division a
  344  nonrefundable payment of $10 million. This payment shall be
  345  treated as an advance payment to the state by each Internet
  346  poker hub operator and shall be credited against the tax on
  347  monthly gross receipts derived from the play of intrastate
  348  Internet poker under paragraph (25)(a) until the original amount
  349  is recouped by each Internet poker hub operator.
  350         2. Upon the submission of the initial application for an
  351  Internet poker hub operator license, and annually thereafter, on
  352  the anniversary date of the issuance of the initial license, an
  353  Internet poker hub operator licensee shall pay a nonrefundable
  354  license fee of $500,000 for the succeeding 12 months of
  355  licensure to fund the division’s regulation and oversight of the
  356  operation and play of intrastate Internet poker. All funds
  357  received under this paragraph shall be deposited by the division
  358  with the Chief Financial Officer to the credit of the Pari
  359  mutuel Wagering Trust Fund.
  360         (6) SELECTION OF AN INTERNET POKER HUB OPERATOR BY
  361  COMPETITIVE PROCUREMENT PROCESS.—The division shall, subject to
  362  a competitive procurement process, select no more than three
  363  Internet poker hub operator applicants that meet the licensure
  364  and technical requirements and expertise to provide services for
  365  lawful intrastate Internet poker games in Florida. The
  366  applicants must demonstrate the ability to ensure that
  367  intrastate Internet poker is offered only to registered players
  368  who are at least 18 years of age and who are physically present
  369  within the borders of this state at the time of play.
  370         (7) QUALIFICATIONS FOR AN INTERNET POKER HUB OPERATOR.—For
  371  the purposes of this section, the division shall consider all of
  372  the following as minimum qualifications to determine whether an
  373  Internet poker hub operator applicant or any subcontractor
  374  included in the hub operator applicant’s state application is
  375  legally, technically, and financially qualified to become the
  376  state’s Internet poker hub operator:
  377         (a) The applicant or subcontractor is an entity authorized
  378  to conduct business in this state.
  379         (b) The applicant or subcontractor has not accepted any
  380  wager of money or other consideration on any online gambling
  381  activity, including poker, from any Florida resident since
  382  October 13, 2006. However, this paragraph does not disqualify an
  383  applicant or subcontractor who accepts online pari-mutuel wagers
  384  from any Florida resident through a legal online pari-mutuel
  385  wagering entity authorized in another state.
  386         (c) The applicant’s or subcontractor’s executives and key
  387  employees meet the requirements to obtain intrastate Internet
  388  poker occupational licenses from the division, as set forth in
  389  subsection (12).
  390         (d) The applicant or subcontractor has a contract or is
  391  licensed to operate gaming or lottery activities in one or more
  392  jurisdictions within the United States.
  393         (e) The applicant or subcontractor has existing and
  394  established experience with Internet gaming, or is licensed to
  395  conduct Internet gaming activities, in one or more jurisdictions
  396  outside the United States where Internet gaming is legal and
  397  regulated.
  398         (f) The applicant, the applicant’s subcontractors, and all
  399  entities with an ownership interest in the applicant or the
  400  applicant’s subcontractors have demonstrated compliance with all
  401  federal and state laws in the jurisdictions in which they
  402  provide services.
  403         (g) The applicant has provided all necessary documentation
  404  and information relating to all proposed subcontractors of the
  405  applicant.
  406         (h) The applicant has provided a description of how it will
  407  facilitate compliance with all of the standards set forth in
  408  this section, including, but not limited to, those for:
  409         1. Registered player processes and requirements relating to
  410  intrastate play, age verification, and exclusion of problem
  411  gamblers.
  412         2. Network system requirements, including, but not limited
  413  to, connectivity, hardware, software, anti-fraud systems, virus
  414  prevention, data protection, access controls, firewalls,
  415  disaster recovery, and redundancy.
  416         3. Gaming systems, including, but not limited to, hardware
  417  and software that ensures that: games are legal, games are
  418  independent and fair, game and betting rules are available to
  419  all registered players, and all data used for the conduct of
  420  each game are randomly generated and unpredictable.
  421         4. Ongoing auditing by the division and accounting systems,
  422  including, but not limited to, those for registered player
  423  accounts, participation fees, distribution of funds to
  424  registered players, and distribution of revenue to the state.
  425         (i) The applicant has provided all other documentation or
  426  information that the division, by rule, has determined is
  427  required to ensure that the applicant is legally, technically,
  428  and financially qualified to enter into a contract to become the
  429  state’s Internet poker hub operator.
  430         (8) SUBMISSION OF THE APPLICATION FOR AN INTERNET POKER HUB
  431  OPERATOR; FEES.—In addition to demonstrating that the applicant
  432  is legally, technically, and financially qualified to become an
  433  Internet poker hub operator in the state, the applicant must
  434  describe how it will fulfill the contractual role envisaged by
  435  this section. The applicant shall provide all of the following:
  436         (a) All necessary documentation and information relating to
  437  the applicant and its direct and indirect owners, including, but
  438  not limited to:
  439         1. Documentation that the entity is authorized to conduct
  440  business in this state and other founding documents.
  441         2. Current and historical audited financial and accounting
  442  records.
  443         3. Any and all documents relating to legal and regulatory
  444  proceedings in this state and other jurisdictions involving the
  445  applicant.
  446         4. Any and all documents relating to the applicant’s
  447  business history, including all state and federal tax filings.
  448         5. Any and all documents relating to the nature and sources
  449  of the applicant’s financing.
  450         6. Any and all documentation that demonstrates that the
  451  applicant is financially qualified to perform the obligations of
  452  an Internet poker hub operator as described in this section.
  453         7. Any other documentation or information that the
  454  division, by rule, determines is required to ensure eligibility.
  455         (b) All necessary documentation and information relating to
  456  all proposed subcontractors of the Internet poker hub operator
  457  applicant, including, but not limited to:
  458         1. A description of the services to be provided by each
  459  subcontractor.
  460         2. Information for each subcontractor as set forth in this
  461  section.
  462         3. Any other documentation or information that the
  463  division, by rule, determines is required to ensure eligibility.
  464         (c) A description as to how the applicant will facilitate
  465  compliance with all of the standards set forth in this section,
  466  including, but not limited to, those for:
  467         1. Registered player requirements relating to:
  468         a. Intrastate play.
  469         b. Age verification.
  470         c. Exclusion of problem gamblers.
  471         2. Network system requirements, including, but not limited
  472  to:
  473         a. Connectivity.
  474         b. Hardware.
  475         c. Software.
  476         d. Anti-fraud systems.
  477         e. Virus prevention.
  478         f. Data protection.
  479         g. Access controls.
  480         h. Firewalls.
  481         i. Disaster recovery.
  482         j. Redundancy.
  483         3. Gaming systems, including, but not limited to, hardware
  484  and software that ensures that:
  485         a. Games are legal.
  486         b. Games are independent and fair.
  487         c. Game and betting rules are available to all registered
  488  players.
  489         d. All data used for the conduct of each game are randomly
  490  generated and unpredictable.
  491         4. Accounting systems, including, but not limited to, those
  492  for:
  493         a. Registered player accounts.
  494         b. Participation fees.
  495         c. Transparency and reporting to the division.
  496         d. Distribution of revenue to the state, funds pursuant to
  497  contract, and funds to registered players.
  498         e. Ongoing auditing.
  499         (d) A description of the games and services the applicant
  500  proposes to offer to registered players.
  501         (e) A description by the applicant of how it will ensure
  502  that registered players are at least 18 years of age or older
  503  and facilitate registered player protections and resolution of
  504  player disputes.
  505         (f) Upon submission of the initial application and
  506  proposal, an initial filing fee of $25,000 to compensate the
  507  division for reasonably anticipated costs to be incurred to
  508  conduct a comprehensive investigation of the applicant to
  509  determine if the applicant is legally, technically, and
  510  financially qualified to become the state’s Internet poker hub
  511  operator and is suitable for licensure. The division shall, by
  512  rule, require the applicant to make an additional payment if
  513  necessary to complete the investigation; however, the total
  514  amount collected under this paragraph may not exceed the actual
  515  cost incurred to conduct the investigation. The division shall,
  516  by rule, set a procedure for refunding any amount of the filing
  517  fee and additional payment collected under this paragraph which
  518  is not used to cover the cost of the investigation.
  519         (9) ANNUAL BOND REQUIRED.—The holder of a license to be an
  520  Internet poker hub operator in the state shall be financially
  521  and otherwise responsible for the operation of a state Internet
  522  poker network and for the conduct of any employee involved in
  523  the operation of the online poker network. Before the issuance
  524  of an Internet poker hub operator license, each qualified
  525  applicant for such a license must provide evidence of a surety
  526  bond in the amount of $1 million, payable to the state, for each
  527  year that the licensee is licensed to be an Internet poker hub
  528  operator in the state. The bond shall be issued by a surety or
  529  sureties authorized to do business in the state and approved by
  530  the division and the Chief Financial Officer in his or her
  531  capacity as treasurer of the division. The bond shall guarantee
  532  that an Internet poker hub operator fulfills all financial
  533  requirements of the contract. Such bond shall be kept in full
  534  force and effect by an Internet poker hub operator during the
  535  term of the license.
  536         (10) OBLIGATION OF AN INTERNET POKER HUB OPERATOR.—An
  537  Internet poker hub operator shall comply with the terms of its
  538  contract with the state and this section.
  539         (a) The accepted proposal agreed to by the division, on
  540  behalf of the state, and an Internet poker hub operator
  541  applicant shall govern the interpretation of the contract
  542  creating a contractual relationship entered into between the
  543  state and the Internet poker hub operator.
  544         (b) The contract between the state and an Internet poker
  545  hub operator is for a 5-year period and may be renewed for a
  546  period equal to the original contract, if agreed to by both
  547  parties.
  548         (c) The contract between the state and an Internet poker
  549  hub operator may be amended by mutual written agreement of the
  550  division and the Internet poker hub operator.
  551         (d) If this section is amended, an Internet poker hub
  552  operator may declare the contract null and void within 60 days
  553  after the effective date of the amendment and must provide at
  554  least 90 days’ prior written notice to the division of such
  555  intent; otherwise, the Internet poker hub operator agrees to be
  556  bound by the amendments to this section adopted after the terms
  557  of the contract are established.
  558         (e) In the event of commercial infeasibility due to a
  559  change in federal law rendering the provision of intrastate
  560  poker services illegal, an Internet poker hub operator may
  561  abandon the contract after providing the division with at least
  562  90 days’ prior written notice of its intent to end the contract
  563  and a statement explaining its interpretation that continuing to
  564  provide services under the contract is commercially infeasible.
  565         (f) If a dispute arises between the parties to the
  566  contract, either the division or the Internet poker hub operator
  567  may go through an administrative law or circuit court for an
  568  initial interpretation of the contract and the rights and
  569  responsibilities in the contract.
  570         (g) After each year of operation of intrastate Internet
  571  poker in the state, the division shall review and evaluate the
  572  current level of liquidity in the state Internet poker network
  573  to determine if there is a need to authorize additional Internet
  574  poker hub operators. If the division finds there is sufficient
  575  evidence to support authorizing additional Internet poker hub
  576  operators, then the division may select additional Internet
  577  poker hub operators pursuant to subsection (6) and may authorize
  578  additional Internet poker hub operators based on the
  579  qualifications specified in subsection (7). However,
  580  notwithstanding the power to authorize additional Internet poker
  581  hub operators under this paragraph, only three Internet poker
  582  hub operators may operate at any one time in the state.
  583         (11) CARDROOM AFFILIATE LICENSE REQUIRED; APPLICATION;
  584  FEES.—A cardroom affiliate license may be issued only to a
  585  cardroom operator who is licensed under s. 849.086, actively
  586  operates a cardroom with a minimum of 10 licensed tables, and
  587  complies with all the requirements of s. 849.086 and the rules
  588  adopted pursuant to that section.
  589         (a) Only those persons holding a valid cardroom affiliate
  590  license issued by the division may provide intrastate Internet
  591  poker for play to registered players through its website.
  592         (b) After the initial cardroom affiliate license is
  593  granted, the annual application for the renewal of that license
  594  shall be made in conjunction with the applicant’s annual
  595  application for its cardroom and pari-mutuel licenses under s.
  596  849.086 and chapter 550, respectively.
  597         (c) A person seeking a license or renewal of a license to
  598  operate as a cardroom affiliate shall make the application on
  599  forms prescribed by the division. An application for a cardroom
  600  affiliate license shall contain all of the information the
  601  division, by rule, determines is required to ensure eligibility.
  602         (d) As a condition of licensure and to maintain continued
  603  authority for the conduct of intrastate Internet poker, the
  604  cardroom affiliate licensee must provide the documentation
  605  required under this section on a timely basis to the division
  606  and the documentation must be appropriate, current, and
  607  accurate. A change in ownership or interest of a cardroom
  608  affiliate licensee of 5 percent or more of the stock or other
  609  evidence of ownership or equity in the cardroom affiliate
  610  licensee or any parent corporation or other business entity that
  611  in any way owns or controls the cardroom affiliate licensee must
  612  be approved by the division prior to the change, unless the
  613  owner is an existing holder of the license who was previously
  614  approved by the division. A change in ownership or interest of a
  615  cardroom affiliate licensee of less than 5 percent, unless the
  616  change results in a cumulative total of 5 percent or more, must
  617  be reported to the division within 20 days after the change. The
  618  division may then conduct an investigation to ensure that the
  619  license is properly updated to show the change in ownership or
  620  interest. Reporting is not required under this paragraph if the
  621  person is holding 5 percent or less of the equity or securities
  622  of a corporate owner of the cardroom affiliate licensee that has
  623  its securities registered pursuant to s. 12 of the Securities
  624  Exchange Act of 1934, 15 U.S.C. ss. 78a-78kk, and if the
  625  corporation or entity files with the United States Securities
  626  and Exchange Commission the reports required by s. 13 of that
  627  act or if the securities of the corporation or entity are
  628  regularly traded on an established securities market in the
  629  United States. A change in ownership or interest of less than 5
  630  percent which results in a cumulative ownership or interest of 5
  631  percent or more must be approved by the division before the
  632  change, unless the owner is an existing holder of the license
  633  who was previously approved by the division.
  634         (e) As a condition of eligibility for license renewal, a
  635  cardroom affiliate must have an active and operating portal and
  636  must have contributed at least 5 percent of the total revenue
  637  generated from the play of intrastate Internet poker from the
  638  previous state fiscal year, as determined by the division.
  639         (f) A cardroom affiliate licensee may not sell or lease all
  640  or any portion of its cardroom licensed under s. 849.086 to any
  641  person or entity, or contract with any person or entity to
  642  operate its website, conduct marketing or promotional
  643  activities, or conduct any other aspects of business associated
  644  with the play of poker under s. 849.086 or intrastate Internet
  645  poker under this section, which does not meet and comply with
  646  all requirements and provisions of this section and s. 849.086.
  647         (g) The annual cardroom affiliate license fee shall be
  648  $1,000. The annual license fee shall be deposited by the
  649  division with the Chief Financial Officer to the credit of the
  650  Pari-mutuel Wagering Trust Fund.
  651         (h) The division shall adopt rules regarding cardroom
  652  affiliate licenses and renewals.
  653         (12) BUSINESS AND EMPLOYEE OCCUPATIONAL LICENSE REQUIRED;
  654  APPLICATION; FEES.—
  655         (a) A person employed by or otherwise working for an
  656  Internet poker hub operator or a cardroom affiliate in any
  657  capacity related to and while conducting intrastate Internet
  658  poker operations must hold a valid occupational license issued
  659  by the division.
  660         (b) An Internet poker hub operator or a cardroom affiliate
  661  may not employ or allow to be employed any person in any
  662  capacity related to the operation of intrastate Internet poker
  663  unless the person holds a valid occupational license.
  664         (c) An Internet poker hub operator or cardroom affiliate
  665  may not contract with, or otherwise do business with, a business
  666  required to hold a valid intrastate Internet poker business
  667  occupational license, unless the business holds such a valid
  668  license.
  669         (d) A proprietorship, partnership, corporation,
  670  subcontractor, or other entity must obtain a valid intrastate
  671  Internet poker business occupational license issued by the
  672  division to partner with, contract with, be associated with, or
  673  participate in the conduct of intrastate Internet poker
  674  operations with an Internet poker hub operator or a cardroom
  675  affiliate.
  676         (e) The division shall establish, by rule, a schedule for
  677  the annual renewal of Internet poker hub operator and cardroom
  678  affiliate occupational licenses. Intrastate Internet poker
  679  occupational licenses are not transferable.
  680         (f) A person seeking an intrastate Internet poker
  681  occupational license, or renewal of such a license, shall make
  682  the application on forms prescribed by the division and include
  683  payment of the appropriate application fee. An application for
  684  an intrastate Internet poker occupational license shall contain
  685  all of the information the division, by rule, determines is
  686  required to ensure eligibility under this section.
  687         (g) The division shall adopt rules regarding intrastate
  688  Internet poker occupational licenses and renewals.
  689         (h) An intrastate Internet poker occupational license is
  690  valid for the same term as a pari-mutuel occupational license
  691  issued under s. 550.105(1).
  692         (i) Pursuant to rules adopted by the division, any person
  693  may apply for and, if qualified, be issued an intrastate
  694  Internet poker occupational license valid for a period of 3
  695  years upon payment of the full occupational license fee for each
  696  of the 3 years for which the license is issued. The intrastate
  697  Internet poker occupational license is valid during its
  698  specified term at any Internet poker hub operator or a cardroom
  699  affiliate where intrastate Internet poker is authorized to be
  700  conducted.
  701         (j) The intrastate Internet poker occupational license fee
  702  for initial application and annual renewal shall be determined
  703  by rule of the division but may not exceed $50 for an
  704  occupational license for an employee of an Internet poker hub
  705  operator or a cardroom affiliate licensee or $1,000 for a
  706  business occupational license for nonemployees of the licensee
  707  providing goods or services to an Internet poker hub operator or
  708  a cardroom affiliate occupational licensee. Failure to pay the
  709  required fee constitutes grounds for disciplinary action by the
  710  division against an Internet poker hub operator or a cardroom
  711  affiliate occupational licensee.
  712         (k) A person holding a valid individual cardroom
  713  occupational license issued by the division under s. 849.086(6)
  714  is not required to obtain an individual employee occupational
  715  license under this subsection.
  716         (13) BUSINESS AND EMPLOYEE OCCUPATIONAL LICENSE DENIAL,
  717  REVOCATION, SUSPENSION, LIMITATION, OR NONRENEWAL.—The division
  718  may:
  719         (a) Deny an application for, or revoke, suspend, or place
  720  conditions or restrictions on, a license of a person or entity
  721  that has been refused a license by any other state gaming
  722  commission, governmental department, agency, or other authority
  723  exercising regulatory jurisdiction over the gaming of another
  724  state or jurisdiction.
  725         (b) Deny an application for, or suspend or place conditions
  726  or restrictions on, a license of any person or entity that is
  727  under suspension or has unpaid fines in another state or
  728  jurisdiction.
  729         (c) Deny, suspend, revoke, or refuse to renew any Internet
  730  poker hub operator or cardroom affiliate occupational license if
  731  the applicant for the license or the licensee has violated this
  732  section or the rules of the division governing the conduct of
  733  persons connected with the play of intrastate Internet poker.
  734         (d) Deny, suspend, revoke, or refuse to renew any Internet
  735  poker hub operator or cardroom affiliate occupational license if
  736  the applicant for the license or the licensee has been convicted
  737  in this state, in any other state, or under the laws of the
  738  United States of a capital felony, a felony, or an offense in
  739  any other state that would be a felony under the laws of this
  740  state involving arson; trafficking in, conspiracy to traffic in,
  741  smuggling, importing, conspiracy to smuggle or import, or
  742  delivery, sale, or distribution of a controlled substance;
  743  racketeering; or a crime involving a lack of good moral
  744  character, or has had a gaming license revoked by this state or
  745  any other jurisdiction for any gaming-related offense.
  746         (e) Deny, revoke, or refuse to renew any Internet poker hub
  747  operator or cardroom affiliate occupational license if the
  748  applicant for the license or the licensee has been convicted of
  749  a felony or misdemeanor in this state, in any other state, or
  750  under the laws of the United States if such felony or
  751  misdemeanor is related to gambling or bookmaking as described in
  752  s. 849.25.
  753         (14) BUSINESS AND EMPLOYEE OCCUPATIONAL LICENSE;
  754  FINGERPRINTS; FEES; CITATIONS.—
  755         (a) A person employed by or working with an Internet poker
  756  hub operator or a cardroom affiliate must submit fingerprints
  757  for a criminal history record check and may not have been
  758  convicted of any disqualifying criminal offense specified in
  759  subsection (7). Division employees and law enforcement officers
  760  assigned by their employing agencies to work within the premises
  761  as part of their official duties are excluded from the criminal
  762  history record check requirements under this subsection.
  763         (b) Fingerprints for all intrastate Internet poker
  764  occupational license applications shall be taken in a manner
  765  approved by the division upon initial application, or as
  766  required thereafter by rule of the division, and shall be
  767  submitted electronically to the Department of Law Enforcement
  768  for state processing. The Department of Law Enforcement shall
  769  forward the fingerprints to the Federal Bureau of Investigation
  770  for national processing. The results of the criminal history
  771  record check shall be returned to the division for purposes of
  772  screening. The division requirements under this subsection shall
  773  be instituted in consultation with the Department of Law
  774  Enforcement.
  775         (c) The cost of processing fingerprints and conducting a
  776  criminal history record check for an intrastate Internet poker
  777  occupational license shall be borne by the person being checked.
  778  The Department of Law Enforcement may invoice the division for
  779  the fingerprints submitted each month.
  780         (d) All fingerprints submitted to the Department of Law
  781  Enforcement and required by this section shall be retained by
  782  the Department of Law Enforcement and entered into the statewide
  783  automated fingerprint identification system as authorized by s.
  784  943.05(2)(b) and shall be available for all purposes and uses
  785  authorized for arrest fingerprint cards entered into the
  786  statewide automated fingerprint identification system under s.
  787  943.051.
  788         (e) The Department of Law Enforcement shall search all
  789  arrest fingerprints received under s. 943.051 against the
  790  fingerprints retained in the statewide automated fingerprint
  791  identification system. Any arrest record that is identified with
  792  the retained fingerprints of a person subject to the criminal
  793  history screening requirements of this section shall be reported
  794  to the division. Each licensed facility shall pay a fee to the
  795  division for the cost of retention of the fingerprints and the
  796  ongoing searches under this paragraph. The division shall
  797  forward the payment to the Department of Law Enforcement. The
  798  amount of the fee to be imposed for performing these searches
  799  and the procedures for the retention of licensee fingerprints
  800  shall be as established by rule of the Department of Law
  801  Enforcement. The division shall inform the Department of Law
  802  Enforcement of any change in the license status of licensees
  803  whose fingerprints are retained under paragraph (d).
  804         (f) The division shall request the Department of Law
  805  Enforcement to forward the fingerprints to the Federal Bureau of
  806  Investigation for a national criminal history records check
  807  every 3 years following issuance of a license. If the
  808  fingerprints of a person who is licensed have not been retained
  809  by the Department of Law Enforcement, the person must file a
  810  complete set of fingerprints as provided for in paragraph (a).
  811  The division shall collect the fees for the cost of the national
  812  criminal history record check under this paragraph and shall
  813  forward the payment to the Department of Law Enforcement. The
  814  cost of processing fingerprints and conducting a criminal
  815  history record check under this paragraph for an intrastate
  816  Internet poker occupational license shall be borne by the person
  817  being checked. The Department of Law Enforcement may invoice the
  818  division for the fingerprints submitted each month. Under
  819  penalty of perjury, each person who is licensed or who is
  820  fingerprinted as required by this subsection must agree to
  821  inform the division within 48 hours if he or she is convicted of
  822  or has entered a plea of guilty or nolo contendere to any
  823  disqualifying offense, regardless of adjudication.
  824         (g) All moneys collected under this subsection shall be
  825  deposited into the Pari-mutuel Wagering Trust Fund.
  826         (h) The division may deny, revoke, or suspend any
  827  occupational license if the applicant or holder of the license
  828  accumulates unpaid obligations, defaults in obligations, or
  829  issues drafts or checks that are dishonored or for which payment
  830  is refused without reasonable cause.
  831         (i) The division may fine or suspend, revoke, or place
  832  conditions upon the license of any licensee who provides false
  833  information under oath regarding an application for a license or
  834  an investigation by the division.
  835         (j) The division may impose a civil fine of up to $10,000
  836  for each violation of this section or the rules of the division
  837  in addition to or in lieu of any other penalty provided for in
  838  this subsection. The division may adopt a penalty schedule for
  839  violations of this section or any rule adopted pursuant to this
  840  section for which it would impose a fine in lieu of a suspension
  841  and adopt rules allowing for the issuance of citations,
  842  including procedures to address such citations, to persons who
  843  violate such rules. In addition to any other penalty provided by
  844  law, the division may exclude from all licensed pari-mutuel,
  845  cardroom, and slot machine facilities in this state, for a
  846  period not to exceed the period of suspension, revocation, or
  847  ineligibility, any person whose occupational license application
  848  has been declared ineligible to hold an occupational license or
  849  whose occupational license has been suspended or revoked by the
  850  division.
  851         (15) REGISTERED PLAYERS; ELIGIBILITY.—
  852         (a) All registered players must be located within this
  853  state at the time of play of intrastate Internet poker.
  854         (b) A person who has not attained 18 years of age may not
  855  be a registered player or play intrastate Internet poker.
  856         (c) All Internet poker hub operators and cardroom
  857  affiliates shall exclude from play any person who has submitted
  858  a completed Internet Poker Self-Exclusion Form.
  859         1. All Internet poker hub operators and cardroom affiliates
  860  shall have an Internet Poker Self-Exclusion Form available
  861  online and accessible on the Internet page that is displayed
  862  when:
  863         a. A person opens the Internet page to register as a
  864  registered player; or
  865         b. A registered player accesses the first page of the
  866  Internet page prior to playing.
  867         2. Upon receipt of a completed Internet Poker Self
  868  Exclusion Form, an Internet poker hub operator or cardroom
  869  affiliate shall immediately provide a copy of the completed form
  870  to each Internet poker hub operator, each cardroom affiliate,
  871  and the division. The division shall ensure that all other
  872  cardroom affiliates exclude the person from the play of
  873  intrastate Internet poker.
  874         3. Each Internet poker hub operator and cardroom affiliate
  875  shall retain the original form to identify persons who request
  876  to be excluded from play.
  877         4. Each Internet poker hub operator and cardroom affiliate
  878  shall prominently display a link to the website of a responsible
  879  gaming organization that is under contract with the division
  880  pursuant to s. 551.118(2) for services related to the prevention
  881  of compulsive and addictive gambling.
  882         5. A person may not bring any action against an Internet
  883  poker hub operator or a cardroom affiliate for negligence or any
  884  other claim if a person who has filled out an Internet Poker
  885  Self-Exclusion Form gains access and plays despite the request
  886  to be excluded.
  887         (16) INTRASTATE INTERNET POKER; AUTHORIZED GAMES.—
  888         (a) In order to offer a specific game of poker for play, an
  889  Internet poker hub operator shall provide the division with:
  890         1. A description of any game of poker and the betting rules
  891  it proposes to offer to registered players; and
  892         2. Documentation relating to development and testing of the
  893  game’s software.
  894         (b) Upon submission of the information required in
  895  paragraph (a), an Internet poker hub operator may begin offering
  896  the game. If the division does not object to the proposed game
  897  of poker within 30 days after receipt of the submission, the
  898  game will be considered authorized and the Internet poker hub
  899  operator submitting the proposal may continue to offer the game
  900  to registered players.
  901         (c) Games and betting events shall be operated strictly in
  902  accordance with the specified game and betting rules.
  903         (d) An Internet poker hub operator shall ensure that the
  904  authorized games of poker are fair. For each proposed or
  905  authorized game offered for play, the gaming system shall
  906  display the following information:
  907         1. The name of the game.
  908         2. Any restrictions on play.
  909         3. The rules of the game.
  910         4. All instructions on how to play.
  911         5. The unit and total bets permitted.
  912         6. The registered player’s current account balance, which
  913  shall be updated in real time.
  914         7. Any other information that an Internet poker hub
  915  operator determines is necessary for the registered player to
  916  have in real time to compete fairly in the proposed or
  917  authorized game.
  918         (e) All proposed and authorized game results shall be
  919  conducted in such a fashion that:
  920         1. Data used to create results shall be unpredictable such
  921  that it is infeasible to predict the next occurrence in a game,
  922  given complete knowledge of the algorithm or hardware generating
  923  the sequence, and all previously generated numbers.
  924         2. The game or any game event outcome shall not be affected
  925  by the effective bandwidth, link utilization, bit error rate, or
  926  other characteristic of the communications channel between the
  927  gaming system and the playing device used by the player.
  928         (f) An Internet poker hub operator shall deploy controls
  929  and technology to ensure the ability to minimize fraud or
  930  cheating through collusion, such as external exchange of
  931  information between different players, or any other means.
  932         1. If an Internet poker hub operator becomes aware that
  933  fraud or cheating is taking place or has taken place, it shall
  934  immediately take steps to stop such activities and inform the
  935  division of all relevant facts.
  936         2. An Internet poker hub operator shall immediately inform
  937  the division of any complaints of fraud or collusion and shall
  938  investigate whether the complaints are true and shall
  939  expeditiously act to prevent further fraud or collusion from
  940  taking place on the Internet poker hub. An Internet poker hub
  941  operator shall report the results of the investigation in
  942  writing to the division within 24 hours after the complaint and
  943  shall continue to report every 24 hours until its investigation
  944  is concluded. This paragraph does not prevent the division from
  945  conducting an independent investigation or initiating an
  946  administrative action to protect registered players from fraud
  947  and collusion on the Internet poker hub site and does not
  948  prohibit a registered player, the Internet poker hub operator, a
  949  cardroom affiliate, or the division from reporting suspected
  950  criminal activities to law enforcement officials.
  951         3. A registered player may not bring an action for damages
  952  against an Internet poker hub operator for attempting to prevent
  953  fraud or cheating if the Internet poker hub operator can
  954  demonstrate that it acted to prevent such actions as soon as it
  955  became aware of them.
  956         (g) If the gaming server or software does not allow a game
  957  to be completed, the hand shall be voided and all funds relating
  958  to the incomplete hand shall be returned to the registered
  959  player’s account.
  960         (17) REGISTERED PLAYER ACCOUNTS.—
  961         (a) An Internet poker hub operator shall register players
  962  and establish registered player accounts prior to play and shall
  963  ensure that personally identifiable information is accessible to
  964  players and regulators but is otherwise secure.
  965         (b) A person may not participate in any game on a state
  966  Internet poker network unless the person is registered as a
  967  player and holds an account.
  968         (c) Accounts may be established in person or by mail,
  969  telephone, or any electronic means.
  970         (d) To register and establish an account, a person must
  971  provide the following registration information:
  972         1. First name and surname.
  973         2. Principal residence address.
  974         3. Telephone number.
  975         4. Social security number.
  976         5. Legal identification or certification to prove that the
  977  person is at least 18 years of age.
  978         6. Valid email address.
  979         7. The source of funds to be used to establish the account
  980  after the registration process is complete.
  981         (e) An individual may not register for more than three
  982  registered player accounts per calendar year. A registered
  983  player may not have more than three registered player accounts
  984  at any time.
  985         (f) Prior to completing the registration process, an
  986  Internet poker hub operator shall explain to the person in a
  987  conspicuous fashion the privacy policies of the Internet poker
  988  hub, and the person must assent to the following policies:
  989         1. Personal identifying information will not be shared with
  990  any nongovernment third parties except for licensed
  991  subcontractors of an Internet poker hub operator for the sole
  992  purpose of permitting registered players to participate in games
  993  on the Internet poker hub or upon receipt of a court order to
  994  subpoena such information from the Internet poker hub.
  995         2. All personally identifiable information about registered
  996  players will be shared with the division, the Department of Law
  997  Enforcement, and any other governmental agency that receives a
  998  court order to subpoena such information.
  999         (g) An Internet poker hub operator shall also require that
 1000  a person agree to the terms of a use agreement applying to
 1001  registered players.
 1002         (h) An Internet poker hub operator shall provide a
 1003  registered player with the means to update the information
 1004  provided in paragraph (d).
 1005         (i) An Internet poker hub operator may revoke the accounts
 1006  of a registered player for the following reasons:
 1007         1. The registered player provided false information in the
 1008  registration process;
 1009         2. The registered player has not updated registration
 1010  information to keep it current; or
 1011         3. The registered player has violated an Internet poker hub
 1012  operator’s terms of use agreement.
 1013         (j) An Internet poker hub operator may suspend or revoke
 1014  the account of a registered player if the operator suspects the
 1015  registered player has participated in illegal activity on a
 1016  state Internet poker network.
 1017         (k) An Internet poker hub operator shall establish and
 1018  maintain an account for each registered player. An Internet
 1019  poker hub operator shall:
 1020         1. Provide a means for a registered player to put funds
 1021  into an account; however, a registered player may not increase
 1022  the amount in an account after a game has started and before its
 1023  completion.
 1024         2. Maintain records on the balance of each registered
 1025  player’s account.
 1026         3. Prohibit a registered player from placing a wager unless
 1027  the player’s account has sufficient funds to cover the amount of
 1028  the wager.
 1029         4. Not provide credit to a registered player’s account or
 1030  act as an agent for a credit provider to facilitate the
 1031  provision of funds.
 1032         5. Provide a means for a registered player to transfer
 1033  money out of the player’s account.
 1034         (l) An Internet poker hub operator shall put in place other
 1035  systems that provide registered players with the ability to
 1036  control aspects of their play. Upon registration and at each
 1037  time when a registered player logs on to a state Internet poker
 1038  network, an Internet poker hub operator shall permit the
 1039  registered player to adjust the player’s play settings to:
 1040         1. Set a limit on the deposits that can be made per day;
 1041         2. Set a limit on the amount that can be wagered within a
 1042  specified period of time;
 1043         3. Set a limit on the losses that may incur within a
 1044  specified period of time;
 1045         4. Set a limit on the amount of time that can be played
 1046  after logging on to the Internet poker hub; or
 1047         5. Prevent the Internet poker hub from allowing the
 1048  registered player to play for a definite or indefinite period of
 1049  time.
 1050         (m) During play, in order to assist a registered player to
 1051  decide whether to suspend play, the registered player’s screen
 1052  shall:
 1053         1. Indicate how long the player has been playing;
 1054         2. Indicate the player’s winnings or losses since the time
 1055  of last logging in;
 1056         3. Give an option to the player to end the session or
 1057  return to the game; and
 1058         4. Require the player to confirm that the player has read
 1059  the message.
 1060         (18) REGISTERED PLAYER ACCOUNTS; RECORDS AND REPORTS.—
 1061         (a) An Internet poker hub operator shall establish a book
 1062  of accounts, regularly audit, and make all financial records
 1063  available to the division. An Internet poker hub operator shall
 1064  demonstrate that it has a system of maintaining records and
 1065  reports that are readily available to the division. The records
 1066  and reports shall include the following:
 1067         1. Monthly auditable and aggregate financial statements of
 1068  gaming transactions.
 1069         2. Calculation of all fees payable to government.
 1070         3. The identity of players.
 1071         4. The balance on the player’s account at the start of a
 1072  session of play.
 1073         5. The wagers placed on each game time stamped by the games
 1074  server.
 1075         6. The result of each game time stamped by the games
 1076  server.
 1077         7. The amount won or lost by the player.
 1078         8. The balance on the player’s account at the end of the
 1079  game.
 1080         (b) An Internet poker hub operator shall reconcile all data
 1081  logs files regarding the registered players’ accounts on a
 1082  monthly basis.
 1083         (19) INTERNET POKER HUB OPERATOR; TECHNICAL SYSTEMS
 1084  REQUIREMENTS.—
 1085         (a) An Internet poker hub operator shall put in place
 1086  technical systems that materially aid the division in fulfilling
 1087  its regulatory, consumer protection, and revenue-raising
 1088  functions and allow the division unrestricted access to and the
 1089  right to inspect the technical systems.
 1090         (b) An Internet poker hub operator shall ensure that the
 1091  network is protected from manipulation or tampering to affect
 1092  the random probabilities of winning plays.
 1093         (c) An Internet poker hub operator shall define and
 1094  document its methodology for the following:
 1095         1. The development, implementation, and maintenance of
 1096  gaming software in a manner representative of industry best
 1097  practice standards.
 1098         2. Server connectivity requirements that include:
 1099         a. Minimum game server connectivity requirements that
 1100  ensure players are protected from losses due to connectivity
 1101  problems.
 1102         b. The system’s ability to recover all transactions
 1103  involving player funds in the event of a failure or malfunction.
 1104         c. Aborted game procedures.
 1105         3. Ability of the system to recover all information
 1106  required for viewing a game interrupted due to loss of
 1107  connectivity.
 1108         4. Consumer protection requirements.
 1109         5. Responsible advertising, marketing, and promotion that
 1110  ensure that players are not misled through advertising or
 1111  promotional activities, and will ensure that the terms and
 1112  conditions of their promotions are followed.
 1113         6. Anti-money-laundering controls.
 1114         7. Preventive and detective controls addressing money
 1115  laundering and fraud risks which shall be documented and
 1116  implemented.
 1117         (d) An Internet poker hub operator shall retain all such
 1118  documentation for at least 12 months.
 1119         (20) FEE FOR PARTICIPATION.—An Internet poker hub operator
 1120  shall charge a fee or a tournament fee to registered players for
 1121  the right to participate in authorized games or tournaments
 1122  conducted on a state Internet poker network. The participation
 1123  fee may be a per-hand charge, a flat fee, an hourly rate, or a
 1124  rake subject to the posted maximum amount but may not be based
 1125  on the amount won by players. The fee shall be designated and
 1126  conspicuously posted on the registered player’s screen prior to
 1127  the start of each proposed or authorized game.
 1128         (21) PROHIBITED RELATIONSHIPS.—
 1129         (a) A proprietorship, partnership, corporation,
 1130  subcontractor, or other entity must obtain a valid intrastate
 1131  Internet poker business occupational license issued by the
 1132  division to partner with, contract with, be associated with, or
 1133  participate in the conduct of intrastate Internet poker
 1134  operations with an Internet poker hub operator or a cardroom
 1135  affiliate.
 1136         (b) A person employed by or performing any function on
 1137  behalf of the division may not:
 1138         1. Be an officer, director, owner, or employee of any
 1139  person or entity licensed by the division.
 1140         2. Have or hold any interest, direct or indirect, in or
 1141  engage in any commerce or business relationship with any person
 1142  licensed by the division.
 1143         (c) An employee of the division or a relative living in the
 1144  same household as the employee may not play at any time on a
 1145  state Internet poker network.
 1146         (d) An occupational licensee of an Internet poker hub
 1147  operator or a relative living in the same household as the
 1148  occupational licensee may not play at any time on a state
 1149  Internet poker network. This paragraph does not apply to an
 1150  occupational licensee of a cardroom affiliate.
 1151         (22) PROHIBITED ACTS; PENALTIES.—
 1152         (a) An Internet poker hub operator may conduct any proposed
 1153  or authorized game under subsection (16) unless specifically
 1154  prohibited by the division or by this section.
 1155         (b) A person who has not attained 18 years of age may not
 1156  hold an intrastate Internet poker occupational license or engage
 1157  in any game conducted therein.
 1158         (c) It is a violation of the laws of this state for any
 1159  entity to offer Internet poker for free or for money or any
 1160  other consideration to individuals present in this state unless
 1161  that entity can demonstrate that it is in compliance with the
 1162  laws and tax regulations of the United States and of this state.
 1163         (d) Any entity that has accepted any wager of money or
 1164  other consideration on any online gambling activity, including
 1165  poker, from any Florida resident since October 13, 2006, is not
 1166  eligible to apply for licensure and participate in intrastate
 1167  Internet poker in this state for a period of 3 years after the
 1168  effective date of this act.
 1169         (e) Except as otherwise provided by law and in addition to
 1170  any other penalty, any person who knowingly makes or causes to
 1171  be made, or aids, assists, or procures another to make, a false
 1172  statement in any report, disclosure, application, or other
 1173  document required under this section or any rule adopted under
 1174  this section is subject to an administrative fine of up to
 1175  $10,000.
 1176         (f) Any person who manipulates or attempts to manipulate
 1177  the outcome, payoff, or operation of the play of intrastate
 1178  Internet poker by tampering, collusion, or fraud, or by the use
 1179  of any object, instrument, or device, by any means, commits a
 1180  felony of the third degree, punishable as provided in s.
 1181  775.082, s. 775.083, or s. 775.084.
 1182         (g) All penalties imposed and collected under this
 1183  subsection shall be deposited into the Pari-mutuel Wagering
 1184  Trust Fund.
 1185         (23) LICENSE FEES.—
 1186         (a) Upon the submission of the initial application for an
 1187  Internet poker hub operator license and annually thereafter, on
 1188  the anniversary date of the issuance of the initial license, an
 1189  Internet poker hub operator licensee shall pay a nonrefundable
 1190  license fee of $500,000 for the succeeding 12 months of
 1191  licensure.
 1192         (b) Upon submission of the initial application for a
 1193  cardroom affiliate license and annually thereafter, as
 1194  prescribed by the division, the licensee shall pay to the
 1195  division a nonrefundable license fee of $1,000 for the
 1196  succeeding 12 months of licensure.
 1197         (c) The license fees required under this subsection shall
 1198  be deposited into the Pari-mutuel Wagering Trust Fund to be used
 1199  by the division for the regulation, investigations, and
 1200  enforcement of the intrastate Internet poker provisions under
 1201  this section. These payments shall be accounted for separately
 1202  from taxes or fees paid pursuant to chapters 550 and 551 and s.
 1203  849.086.
 1204         (24) ADVANCE PAYMENT BY AN INTERNET POKER HUB OPERATOR.
 1205  Upon the awarding of a contract to be an Internet poker hub
 1206  operator by the division under subsection (6), an Internet poker
 1207  hub operator licensee shall pay to the division a nonrefundable
 1208  payment of $10 million. This payment shall be treated as an
 1209  advance payment to the state by each Internet poker hub operator
 1210  and shall be credited against the tax on monthly gross receipts
 1211  derived from the play of intrastate Internet poker under
 1212  paragraph (25)(a) until the original amount is recouped by each
 1213  Internet poker hub operator.
 1214         (25) TAX RATE; OTHER PAYMENTS; PENALTIES.—
 1215         (a) Each Internet poker hub operator shall pay a tax to the
 1216  state of 10 percent of the operator’s monthly gross receipts
 1217  derived from the play of intrastate Internet poker. However, an
 1218  Internet poker hub operator shall pay no taxes under this
 1219  paragraph until the full amount of the advance payment made by
 1220  that poker hub operator under subsection (24) has been credited
 1221  against the tax. Credit of the advance payment toward the tax
 1222  shall be made upon receipt by the division of the monthly report
 1223  required under paragraph (b).
 1224         (b) The gross receipts tax imposed by this section shall be
 1225  paid to the division. Each Internet poker hub operator shall
 1226  remit the gross receipts tax and licensee fees to the division
 1227  to be deposited with the Chief Financial Officer, to the credit
 1228  of the Pari-mutuel Wagering Trust Fund. Such payments shall be
 1229  remitted to the division by electronic funds transfer on the 5th
 1230  day of each calendar month for taxes and fees imposed for the
 1231  preceding month’s intrastate Internet poker activities.
 1232  Licensees shall file a report under oath by the 5th day of each
 1233  calendar month for all taxes remitted during the preceding
 1234  calendar month. Such payments shall be accompanied by a report
 1235  under oath showing all intrastate Internet poker activities for
 1236  the preceding calendar month and such other information as may
 1237  be prescribed by the division.
 1238         (c) A licensee who fails to make tax payments as required
 1239  under this section is subject to an administrative penalty of up
 1240  to $10,000 for each day the tax payment is not remitted. All
 1241  penalties imposed and collected under this subsection shall be
 1242  deposited in the Pari-mutuel Wagering Trust Fund. If a licensee
 1243  fails to pay penalties imposed by order of the division under
 1244  this subsection, the division may suspend, revoke, or refuse to
 1245  renew the license of an Internet poker hub operator or cardroom
 1246  affiliate.
 1247         (d) All of the moneys deposited in the Pari-mutuel Wagering
 1248  Trust Fund under this section shall be utilized and distributed
 1249  in the manner specified in s. 550.135(1) and (2).
 1250         (26) DISTRIBUTION OF INCOME DERIVED FROM THE PLAY OF
 1251  INTERNET POKER.—
 1252         (a) After the tax on the monthly gross receipts derived
 1253  from the play of intrastate Internet poker is paid to the state
 1254  as specified under subsection (25), the remaining monthly gross
 1255  receipts shall be distributed by the Internet poker hub
 1256  operators as follows:
 1257         1. Seventy percent shall be distributed to eligible
 1258  licensed cardrooms and cardroom affiliates.
 1259         a. Before distribution under sub-subparagraph b., if the
 1260  amount to be distributed under this subparagraph for a specific
 1261  month is greater than $35,000 multiplied by the number of
 1262  cardrooms eligible to be cardroom affiliates for that month,
 1263  each licensed cardroom operator as defined in s. 894.086 that
 1264  did not participate as a cardroom affiliate for that month shall
 1265  receive a payment for that month of $20,833, and the remaining
 1266  sum shall be distributed pursuant to sub-subparagraph b.
 1267         b.(I) Fifty percent shall be divided and distributed among
 1268  the cardroom affiliates based on each cardroom affiliate’s total
 1269  rake generated from the play of authorized games defined in s.
 1270  849.086(2)(a) for the previous state fiscal year divided by the
 1271  total previous year’s rake for all the cardroom affiliates, as
 1272  determined by the division.
 1273         (II) Fifty percent shall be divided and distributed to the
 1274  cardroom affiliates based on the amount wagered for the previous
 1275  month through each cardroom affiliate’s portal as determined by
 1276  the division, divided by the total amount wagered for the
 1277  previous month through all cardroom affiliates’ portals.
 1278         c. If two or more cardroom affiliates join together to
 1279  operate a portal for purposes of sub-sub-subparagraphs b.(I) and
 1280  (II), their portal wagers and previous year’s rake shall be
 1281  combined.
 1282         d. Each permitholder that receives payments under this
 1283  subparagraph shall use at least 4 percent of its monthly gross
 1284  receipts from the play of intrastate Internet poker to
 1285  supplement pari-mutuel purses or prize money, respectively,
 1286  during the permitholder’s current meet or no later than the next
 1287  ensuing pari-mutuel meet.
 1288         2. Twenty-five percent shall be retained by the Internet
 1289  poker hub operators from which they shall pay all costs for the
 1290  intrastate Internet poker hub operations.
 1291         3. Four percent shall be retained by the Internet poker hub
 1292  operators to fund statewide advertising, marketing, and
 1293  promotion of the play of intrastate Internet poker on a state
 1294  Internet poker network. The division shall perform an annual
 1295  audit to verify that the Internet poker hub operators use such
 1296  funds solely for the statewide advertising, marketing, and
 1297  promotion of the play of intrastate Internet poker on a state
 1298  Internet poker network.
 1299         4. One percent shall fund services related to the
 1300  prevention and treatment of compulsive and addictive gambling
 1301  provided by the entity that is under contract with the division
 1302  under s. 551.118(2). The division shall be responsible for the
 1303  distribution and audit of the funds under this subparagraph.
 1304         (b) The distribution of the preceding monthly gross
 1305  receipts shall be by the 20th day of each calendar month.
 1306         (c) The division shall ensure that all distributions are
 1307  made in accordance with this section and may adopt rules to
 1308  ensure the implementation and proper distribution of funds.
 1309         (d) This subsection does not prevent individual cardrooms
 1310  or a number of cardroom affiliates from joining together in a
 1311  coalition for the purpose of the marketing and promotion of the
 1312  play of intrastate Internet poker on a state Internet poker
 1313  network.
 1314         (27) SUSPENSION, REVOCATION, OR DENIAL OF LICENSE; FINE.—
 1315         (a) The division may deny a license or the renewal of a
 1316  license, or may suspend or revoke any license, when the
 1317  applicant has: violated or failed to comply with section or any
 1318  rule adopted pursuant to this section; knowingly caused, aided,
 1319  abetted, or conspired with another to cause any person to
 1320  violate this section or any rule adopted pursuant to this
 1321  section; or obtained a license or permit by fraud,
 1322  misrepresentation, or concealment; or if the holder of the
 1323  license is no longer eligible under this section.
 1324         (b) If a cardroom affiliate’s pari-mutuel permit or license
 1325  is suspended or revoked by the division pursuant to chapter 550,
 1326  or its cardroom operator’s license is suspended or revoked by
 1327  the division pursuant to s. 849.086, the division may, but is
 1328  not required to, suspend or revoke the cardroom affiliate’s
 1329  license. If a cardroom affiliate’s license is suspended or
 1330  revoked under this section, the division may, but is not
 1331  required to, suspend or revoke the licensee’s cardroom
 1332  operator’s license.
 1333         (c) Notwithstanding any other provision of this section,
 1334  the division may impose an administrative fine not to exceed
 1335  $10,000 for each violation against any person who has violated
 1336  or failed to comply with this section or any rule adopted
 1337  pursuant to this section.
 1338         (28) PENALTIES.—The division may revoke or suspend any
 1339  Internet poker hub operator license or cardroom affiliate
 1340  license issued under this section upon the willful violation by
 1341  the licensee of this section or any rule adopted pursuant to
 1342  this section. In lieu of suspending or revoking the license, the
 1343  division may impose an administrative fine, not exceeding
 1344  $100,000 for each count or separate offense, upon an Internet
 1345  poker hub operator or a cardroom affiliate for willfully
 1346  violating this section or any rule adopted pursuant to this
 1347  section. All penalties imposed and collected under this section
 1348  shall be deposited into the Pari-mutuel Wagering Trust Fund.
 1349         (29) RULEMAKING.—The division may adopt rules pursuant to
 1350  ss. 120.536(1) and 120.54 to administer the provisions of this
 1351  section.
 1352         (30) LEGISLATIVE AUTHORITY; ADMINISTRATION OF SECTION.—The
 1353  Legislature finds and declares that it has exclusive authority
 1354  over the conduct of intrastate Internet poker in this state.
 1355  Only the Division of Pari-mutuel Wagering and other authorized
 1356  state agencies shall administer this section and regulate the
 1357  intrastate Internet poker industry in the state, including
 1358  operation of all Internet poker hub operators and cardroom
 1359  affiliates, play of authorized games, and the Internet poker
 1360  computer systems authorized in this section, as provided by law
 1361  and rules adopted by the division.
 1362         Section 3. This act shall take effect July 1, 2011.