HB 77

1
A bill to be entitled
2An act relating to Internet poker; creating the "Internet
3Poker Consumer Protection and Revenue Generation Act of
42011"; providing for intrastate Internet poker to be
5provided to the public by cardroom operators through a
6state Internet poker network operated by licensed Internet
7poker hub operators; creating s. 849.087, F.S.; providing
8legislative intent; providing definitions; authorizing
9participation in and operation of intrastate Internet
10poker; providing for the Division of Pari-mutuel Wagering
11of the Department of Business and Professional Regulation
12to administer the act and regulate the operation of a
13state Internet poker network, Internet poker hub
14operators, cardroom affiliates, and the playing of
15intrastate Internet poker; authorizing the division to
16adopt rules, conduct investigations and monitor
17operations, review books and accounts and records, suspend
18or revoke any license or permit for a violation, take
19testimony, issue summons and subpoenas, monitor and ensure
20the proper collection of taxes and fees, and monitor and
21ensure that the playing of Internet poker is conducted
22fairly and that player information is protected by
23Internet poker hub operators; requiring Internet poker hub
24operators to be licensed; providing qualifications and
25conditions for licensure; providing application
26requirements; providing for an advance payment to be
27credited toward taxes; providing initial and renewal
28license fees; providing for selection of Internet poker
29hub operators through competitive procurement process;
30requiring payment of certain cost and refund of amount
31collected in excess of the cost; requiring a surety bond;
32providing for a contract between the state and the poker
33hub operator; requiring the division to annually determine
34need for additional operators; providing for a cardroom
35affiliate license to be issued to a cardroom operator to
36provide intrastate Internet poker for play; providing for
37applications for the affiliate license and renewal
38thereof; providing conditions for licensure and renewal of
39licensure as an affiliate; requiring reporting to and
40approval by the division of a change of ownership of the
41affiliate licensee; prohibiting certain acts by an
42affiliate; providing a fee; providing for employee and
43business occupational licenses; requiring certain
44employees of and certain companies doing business with a
45cardroom affiliate or an Internet poker hub operator to
46hold an appropriate occupational license; prohibiting such
47operator or affiliate from employing or allowing to be
48employed such a person or doing business with such a
49company if that person or company does not hold an
50occupational license; directing the division to adopt
51rules regarding Internet poker hub operator, cardroom
52affiliate, and occupational licenses and renewal of such
53licenses; providing a fee for occupational license and
54renewal thereof; providing penalties for failure to pay
55the fee; exempting from licensure a person holding a valid
56individual cardroom occupational license; providing
57grounds for the division to deny an application for or
58revoke, suspend, or place conditions or restrictions on or
59refuse to renew such occupational license; requiring
60fingerprints; providing procedures for processing
61fingerprints and conducting a criminal history records
62check and for payment of costs; providing for citations
63and civil penalties; providing requirements to register
64and play intrastate Internet poker; providing for an
65Internet Poker Self-Exclusion Form; requiring the Internet
66poker hub operator to exclude from play any person who has
67completed such form; providing for maintenance of the form
68and distribution to cardroom affiliates and the division;
69requiring the Internet poker hub operator to display a
70link to the website offering services related to the
71prevention of compulsive and addictive gambling; limiting
72liability; providing requirements for approval of games to
73be offered to players; providing requirements for all
74offered games and game results and games not completed;
75providing requirements to minimize fraud and cheating;
76prohibiting action for damages against the Internet poker
77hub operator to prevent fraud or cheating under certain
78circumstances; providing requirements for player
79eligibility and registration and player accounts;
80authorizing the Internet poker hub operator to suspend or
81revoke player accounts; providing requirements for poker
82hub operations; requiring the Internet poker hub operator
83to establish a book of accounts, regularly audit financial
84records, and make the records available to the division;
85providing technical system requirements; requiring the
86Internet poker hub operator to define, document, and
87implement certain methodologies relating to its systems;
88requiring the Internet poker hub operator to maintain such
89documentation for a certain period of time; providing for
90player participation fees; prohibiting certain
91relationships and acts by employees of the division and
92occupational license holders and certain relatives;
93authorizing conduct of proposed and authorized games;
94prohibiting a person who has not attained a certain age
95from holding an Internet poker occupational license or
96engaging in any game conducted; prohibiting offering
97Internet poker to persons located in the state except in
98compliance with law; providing that an entity that has
99accepted any wager on any online gambling activity from a
100Florida resident since a certain date is not eligible to
101apply for licensure and participate in intrastate Internet
102poker in Florida for a specified period of time;
103prohibiting false statements; prohibiting manipulation of
104Internet poker play and operations; providing civil and
105criminal penalties; providing for disposition of fines
106collected; providing for license fees to be paid by the
107Internet poker hub operator and cardroom affiliates;
108providing for disposition and accounting of fees
109collected; providing for an advance payment by the
110Internet poker hub operator to be credited toward taxes;
111providing for the tax rate and procedures for payment;
112requiring payments to be accompanied by a report showing
113all intrastate Internet poker activities for the preceding
114calendar month and containing such other information as
115prescribed by the division; providing penalties for
116failure to pay taxes and penalties; providing for use of
117certain deposits; providing for distribution of moneys
118received from Internet poker hub operations; providing
119grounds for the division to deny a license or the renewal
120thereof or suspend or revoke a license; providing
121penalties; authorizing the division to adopt rules;
122providing for administration of the act and regulation of
123the intrastate Internet poker industry; providing an
124effective date.
125
126Be It Enacted by the Legislature of the State of Florida:
127
128     Section 1.  This act may be cited as the "Internet Poker
129Consumer Protection and Revenue Generation Act of 2011."
130     Section 2.  Section 849.087, Florida Statutes, is created
131to read:
132     849.087  Intrastate Internet poker authorized.-
133     (1)  LEGISLATIVE INTENT.-It is the intent of the
134Legislature to create a framework for the state to regulate
135intrastate Internet poker that can ensure consumer protections
136and additional revenue to the state by authorizing,
137implementing, and creating a licensing and regulatory structure
138and system of intrastate Internet poker to:
139     (a)  Provide that intrastate Internet poker is only offered
140for play in a manner that is lawful under the federal Unlawful
141Internet Gaming Enforcement Act of 2006, which authorizes a
142state to regulate and conduct intrastate Internet gambling, such
143as poker.
144     (b)  Provide a new source of revenue that will generate
145additional positive economic benefits to the state through the
146authorization of lawful and regulated intrastate Internet poker
147in Florida instead of flowing offshore to unregulated foreign
148operators and markets.
149     (c)  Create a contractual relationship with one or more
150Internet poker hub operators with the technical expertise to
151ensure that wagering authorized by this section is only offered
152to registered players who are at least 18 years of age and
153physically present within the borders of this state at the time
154of play.
155     (d)  Provide for a competitive procurement process to
156select one or more Internet poker hub operators that are
157qualified to be licensed by the state and meet all statutory,
158regulatory, and contractual requirements of the state while
159protecting registered poker players.
160     (e)  Provide for a licensed cardroom operator to become a
161licensed provider of intrastate Internet poker through Internet
162poker hub operators.
163     (f)  Ensure that the state is able to collect all taxes and
164fees from the play of intrastate Internet poker.
165     (g)  Create a system to protect each registered poker
166player's private information and prevent fraud and identity
167theft and ensure that the player's financial transactions are
168processed in a secure and transparent fashion.
169     (h)  Ensure that the regulatory agency has unlimited access
170to the premises and records of the Internet poker hub operators
171and cardroom affiliates to ensure strict compliance with its
172regulations concerning credit authorization, account access, and
173other security provisions.
174     (i)  Require the Internet poker hub operators to provide
175accessible customer service to registered poker players.
176     (j)  Require the Internet poker hub operator's Internet
177site to contain information relating to problem gambling,
178including a telephone number that an individual may call to seek
179information and assistance for a potential gambling addiction.
180     (2)  DEFINITIONS.-Unless otherwise clearly required by the
181context, as used in this section:
182     (a)  "Authorized game" means a game or series of games of
183poker which are played in a nonbanking manner on a state
184Internet poker network.
185     (b)  "Cardroom affiliate" means a licensed cardroom
186operator as defined in s. 849.086 who maintains an Internet site
187as a portal into a state Internet poker network.
188     (c)  "Convicted" means having been found guilty, regardless
189of adjudication, as a result of a jury verdict, nonjury trial,
190or entry of a plea of guilty or nolo contendere.
191     (d)  "Department" means the Department of Business and
192Professional Regulation.
193     (e)  "Division" means the Division of Pari-mutuel Wagering
194of the department.
195     (f)  "Gross receipts" means the total amount of money
196received by an Internet poker hub operator from registered
197players for participation in authorized games.
198     (g)  "Internet poker hub operator" or "poker hub operator"
199means a computer system operator that is licensed by the state
200and contracts with the state to operate a state Internet poker
201network.
202     (h)  "Intrastate Internet poker" means authorized games of
203poker played over the Internet by registered players who are
204physically present within the borders of this state at the time
205of play.
206     (i)  "Liquidity" means the total number of registered
207players available in a state Internet poker network.
208     (j)  "Nonbanking game" means an authorized game in which an
209Internet poker hub operator or cardroom affiliate is not a
210participant and has no financial stake in the outcome of the
211authorized game.
212     (k)  "Player incentives" means any bonuses, rewards,
213prizes, or other types of promotional items provided to a
214registered player by an Internet poker hub operator or cardroom
215affiliate as an incentive to begin or continue playing on a
216state Internet poker network.
217     (l)  "Rake" means a set fee or percentage of the pot
218assessed by an Internet poker hub operator for providing the
219Internet poker services to registered players for the right to
220participate in an authorized game conducted by the poker hub
221operator.
222     (m)  "Registered player" means a person who is registered
223with a poker hub operator under this section to participate in
224an authorized game conducted on a state Internet poker network.
225     (n)  "State Internet poker network" means a computer system
226operated by one or more Internet poker hub operators that
227authorizes the playing of and wagering on intrastate Internet
228poker by registered players through the website portals of
229cardroom affiliates.
230     (o)  "Tournament fee" means a set fee assessed to
231registered players by an Internet poker hub operator for
232providing the Internet poker tournament services.
233     (3)  INTRASTATE INTERNET POKER AUTHORIZED.-
234     (a)  Under the Unlawful Internet Gaming Enforcement Act of
2352006, a state is authorized to regulate and conduct intrastate
236Internet poker as long as all players and the online wagering
237activities are located within the state.
238     (b)  Notwithstanding any other provision of law, a person
239in Florida may participate as a registered player in an
240authorized game or tournament provided on a state Internet poker
241network by a cardroom affiliate or may operate a state Internet
242poker network as an Internet poker hub operator described in
243this section if such game and poker operations are conducted
244strictly in accordance with the provisions of this section and
245federal law.
246     (4)  AUTHORITY OF DIVISION.-The division shall administer
247this section and regulate the operation of a state Internet
248poker network, the Internet poker hub operators, the cardroom
249affiliates, and the play of intrastate Internet poker under this
250section and the rules adopted pursuant to this section, and is
251authorized to:
252     (a)  Adopt rules related to Internet poker, including, but
253not limited to, rules governing the issuance of operator and
254individual occupational licenses to Internet poker hub
255operators, cardroom affiliates, and their employees; operation
256of a state Internet poker network and technical system
257requirements; security of the financial information of
258registered players and registered player accounts; bonuses,
259awards, promotions, and other incentives to registered players;
260recordkeeping and reporting requirements; the distribution of
261Internet poker income; and the imposition and collection of all
262fees and taxes imposed by this section.
263     (b)  Conduct investigations and monitor operation of a
264state Internet poker network and the playing of authorized games
265on a network.
266     (c)  Review the books, accounts, and records of any current
267or former Internet poker hub operator or cardroom affiliate.
268     (d)  Suspend or revoke any license or permit, after
269hearing, for any violation of this section or the rules adopted
270pursuant to this section.
271     (e)  Take testimony, issue summons and subpoenas for any
272witness, and issue subpoenas duces tecum in connection with any
273matter within its jurisdiction.
274     (f)  Monitor and ensure proper collection of taxes and fees
275imposed by this section. The internal controls of Internet poker
276hub operators shall ensure no compromise of revenue to the
277state. The division shall monitor, audit, and verify the cash
278flow and accounting of a state Internet poker network revenue
279for any given operating day.
280     (g)  Monitor and ensure that the playing of Internet poker
281is conducted fairly and that all personal and financial
282information provided by registered players is protected by the
283Internet poker hub operators.
284     (5)  INTERNET POKER HUB OPERATOR LICENSE REQUIRED;
285APPLICATION; FEES.-A person may not operate as an Internet poker
286hub operator in this state unless the person holds a valid
287Internet poker hub operator license issued under this section.
288     (a)  Only a person holding a valid Internet poker license
289issued by the division may provide intrastate Internet poker for
290play to registered players.
291     (b)  An Internet poker hub operator must be an entity
292authorized to conduct business in this state.
293     (c)  A person seeking a license or renewal of a license to
294operate as an Internet poker hub operator shall make application
295on forms prescribed by the division. Applications for Internet
296poker hub operator licenses shall contain all of the information
297the division, by rule, determines is required to ensure
298eligibility under this section.
299     (d)  As a condition of licensure and to maintain continued
300authority to conduct intrastate Internet poker, an Internet
301poker hub operator licensee must provide the documentation
302required under this section on a timely basis to the division
303and the documentation must be appropriate, current, and
304accurate. A change in ownership or interest of an Internet poker
305hub operator licensee of 5 percent or more of the stock or other
306evidence of ownership or equity in an Internet poker hub
307operator licensee or any parent corporation or other business
308entity that in any way owns or controls an Internet poker hub
309operator licensee must be approved by the division before the
310change, unless the owner is an existing holder of the license
311who was previously approved by the division. A change in
312ownership or interest of an Internet poker hub operator licensee
313of less than 5 percent, unless the change results in a
314cumulative total of 5 percent or more, must be reported to the
315division within 20 days after the change. The division may then
316conduct an investigation to ensure that the license is properly
317updated to show the change in ownership or interest. Reporting
318is not required under this paragraph if the person is holding 5
319percent or less of the equity or securities of a corporate owner
320of an Internet poker hub operator licensee that has its
321securities registered pursuant to s. 12 of the Securities
322Exchange Act of 1934, 15 U.S.C. ss. 78a-78kk, and if the
323corporation or entity files with the United States Securities
324and Exchange Commission the reports required by s. 13 of that
325act or if the securities of the corporation or entity are
326regularly traded on an established securities market in the
327United States. A change in ownership or interest of less than 5
328percent which results in a cumulative ownership or interest of 5
329percent or more must be approved by the division before the
330change, unless the owner is an existing holder of the license
331who was previously approved by the division.
332     (e)1.  Upon the awarding of a contract to be an Internet
333poker hub operator by the division under subsection (6), an
334Internet poker hub operator licensee shall pay to the division a
335nonrefundable payment of $10 million. This payment shall be
336treated as an advance payment to the state by each Internet
337poker hub operator and shall be credited against the tax on
338monthly gross receipts derived from the play of intrastate
339Internet poker under paragraph (25)(a) until the original amount
340is recouped by each Internet poker hub operator.
341     2.  Upon the submission of the initial application for an
342Internet poker hub operator license, and annually thereafter, on
343the anniversary date of the issuance of the initial license, an
344Internet poker hub operator licensee shall pay a nonrefundable
345license fee of $500,000 for the succeeding 12 months of
346licensure to fund the division's regulation and oversight of the
347operation and play of intrastate Internet poker. All funds
348received under this paragraph shall be deposited by the division
349with the Chief Financial Officer to the credit of the Pari-
350mutuel Wagering Trust Fund.
351     (6)  SELECTION OF AN INTERNET POKER HUB OPERATOR BY
352COMPETITIVE PROCUREMENT PROCESS.-The division shall, subject to
353a competitive procurement process, select no more than three
354Internet poker hub operator applicants that meet the licensure
355and technical requirements and expertise to provide services for
356lawful intrastate Internet poker games in Florida. The
357applicants must demonstrate the ability to ensure that
358intrastate Internet poker is only offered to registered players
359who are at least 18 years of age and who are physically present
360within the borders of this state at the time of play.
361     (7)  QUALIFICATIONS FOR AN INTERNET POKER HUB OPERATOR.-For
362the purposes of this section, the division shall consider all of
363the following as minimum qualifications to determine whether an
364Internet poker hub operator applicant or any subcontractor
365included in the hub operator applicant's state application is
366legally, technically, and financially qualified to become the
367state's Internet poker hub operator:
368     (a)  The applicant or subcontractor is an entity authorized
369to conduct business in this state.
370     (b)  The applicant or subcontractor has not accepted any
371wager of money or other consideration on any online gambling
372activity, including poker, from any Florida resident since
373October 13, 2006. However, this paragraph does not disqualify an
374applicant or subcontractor who accepts online pari-mutuel wagers
375from any Florida resident through a legal online pari-mutuel
376wagering entity authorized in another state.
377     (c)  The applicant's or subcontractor's executives and key
378employees meet the requirements to obtain intrastate Internet
379poker occupational licenses from the division, as set forth in
380subsection (12).
381     (d)  The applicant or subcontractor has a contract or is
382licensed to operate gaming or lottery activities in one or more
383jurisdictions within the United States.
384     (e)  The applicant or subcontractor has existing and
385established experience with Internet gaming, or is licensed to
386conduct Internet gaming activities, in one or more jurisdictions
387outside the United States where Internet gaming is legal and
388regulated.
389     (f)  The applicant, the applicant's subcontractors, and all
390entities with an ownership interest in the applicant or the
391applicant's subcontractors have demonstrated compliance with all
392federal and state laws in the jurisdictions in which they
393provide services.
394     (g)  The applicant has provided all necessary documentation
395and information relating to all proposed subcontractors of the
396applicant.
397     (h)  The applicant has provided a description of how it
398will facilitate compliance with all of the standards set forth
399in this section, including, but not limited to, those for:
400     1.  Registered player processes and requirements relating
401to intrastate play, age verification, and exclusion of problem
402gamblers.
403     2.  Network system requirements, including, but not limited
404to, connectivity, hardware, software, anti-fraud systems, virus
405prevention, data protection, access controls, firewalls,
406disaster recovery, and redundancy.
407     3.  Gaming systems, including, but not limited to, hardware
408and software that ensures that: games are legal, games are
409independent and fair, game and betting rules are available to
410all registered players, and all data used for the conduct of
411each game is randomly generated and unpredictable.
412     4.  Ongoing auditing by the division and accounting
413systems, including, but not limited to, those for registered
414player accounts, participation fees, distribution of funds to
415registered players, and distribution of revenue to the state.
416     (i)  The applicant has provided all other documentation or
417information that the division, by rule, has determined is
418required to ensure that the applicant is legally, technically,
419and financially qualified to enter into a contract to become the
420state's Internet poker hub operator.
421     (8)  SUBMISSION OF THE APPLICATION FOR AN INTERNET POKER
422HUB OPERATOR; FEES.-In addition to demonstrating that the
423applicant is legally, technically, and financially qualified to
424become an Internet poker hub operator in the state, the
425applicant must describe how it will fulfill the contractual role
426envisaged by this section. The applicant shall provide all of
427the following:
428     (a)  All necessary documentation and information relating
429to the applicant and its direct and indirect owners, including,
430but not limited to:
431     1.  Documentation that the entity is authorized to conduct
432business in this state and other founding documents.
433     2.  Current and historical audited financial and accounting
434records.
435     3.  Any and all documents relating to legal and regulatory
436proceedings in this state and other jurisdictions involving the
437applicant.
438     4.  Any and all documents relating to the applicant's
439business history, including all state and federal tax filings.
440     5.  Any and all documents relating to the nature and
441sources of the applicant's financing.
442     6.  Any and all documentation that demonstrates that the
443applicant is financially qualified to perform the obligations of
444an Internet poker hub operator as described in this section.
445     7.  Any other documentation or information that the
446division, by rule, determines is required to ensure eligibility.
447     (b)  All necessary documentation and information relating
448to all proposed subcontractors of the Internet poker hub
449operator applicant, including, but not limited to:
450     1.  A description of the services to be provided by each
451subcontractor.
452     2.  Information for each subcontractor as set forth in this
453section.
454     3.  Any other documentation or information that the
455division, by rule, determines is required to ensure eligibility.
456     (c)  A description as to how the applicant will facilitate
457compliance with all of the standards set forth in this section,
458including, but not limited to, those for:
459     1.  Registered player requirements relating to:
460     a.  Intrastate play.
461     b.  Age verification.
462     c.  Exclusion of problem gamblers.
463     2.  Network system requirements, including, but not limited
464to:
465     a.  Connectivity.
466     b.  Hardware.
467     c.  Software.
468     d.  Anti-fraud systems.
469     e.  Virus prevention.
470     f.  Data protection.
471     g.  Access controls.
472     h.  Firewalls.
473     i.  Disaster recovery.
474     j.  Redundancy.
475     3.  Gaming systems, including, but not limited to, hardware
476and software that ensures that:
477     a.  Games are legal.
478     b.  Games are independent and fair.
479     c.  Game and betting rules are available to all registered
480players.
481     d.  All data used for the conduct of each game is randomly
482generated and unpredictable.
483     4.  Accounting systems, including, but not limited to,
484those for:
485     a.  Registered player accounts.
486     b.  Participation fees.
487     c.  Transparency and reporting to the division.
488     d.  Distribution of revenue to the state, funds pursuant to
489contract, and funds to registered players.
490     e.  Ongoing auditing.
491     (d)  A description of the games and services the applicant
492proposes to offer to registered players.
493     (e)  A description by the applicant of how it will ensure
494that registered players are at least 18 years of age or older
495and facilitate registered player protections and resolution of
496player disputes.
497     (f)  Upon submission of the initial application and
498proposal, an initial filing fee of $25,000 to compensate the
499division for reasonably anticipated costs to be incurred to
500conduct a comprehensive investigation of the applicant to
501determine if the applicant is legally, technically, and
502financially qualified to become the state's Internet poker hub
503operator and is suitable for licensure. The division shall, by
504rule, require the applicant to make an additional payment if
505necessary to complete the investigation; however, the total
506amount collected under this paragraph may not exceed the actual
507cost incurred to conduct the investigation. The division shall,
508by rule, set a procedure for refunding any amount of the filing
509fee and additional payment collected under this paragraph which
510is not used to cover the cost of the investigation.
511     (9)  ANNUAL BOND REQUIRED.-The holder of a license to be an
512Internet poker hub operator in the state shall be financially
513and otherwise responsible for the operation of a state Internet
514poker network and for the conduct of any employee involved in
515the operation of the online poker network. Before the issuance
516of an Internet poker hub operator license, each qualified
517applicant for such a license must provide evidence of a surety
518bond in the amount of $1 million, payable to the state, for each
519year that the licensee is licensed to be an Internet poker hub
520operator in the state. The bond shall be issued by a surety or
521sureties authorized to do business in the state and approved by
522the division and the Chief Financial Officer in his or her
523capacity as treasurer of the division. The bond shall guarantee
524that an Internet poker hub operator fulfills all financial
525requirements of the contract. Such bond shall be kept in full
526force and effect by an Internet poker hub operator during the
527term of the license.
528     (10)  OBLIGATION OF AN INTERNET POKER HUB OPERATOR.-An
529Internet poker hub operator shall comply with the terms of its
530contract with the state and this section.
531     (a)  The accepted proposal agreed to by the division, on
532behalf of the state, and an Internet poker hub operator
533applicant shall govern the interpretation of the contract
534creating a contractual relationship entered into between the
535state and the Internet poker hub operator.
536     (b)  The contract between the state and an Internet poker
537hub operator is for a 5-year period and may be renewed for a
538period equal to the original contract, if agreed to by both
539parties.
540     (c)  The contract between the state and an Internet poker
541hub operator may be amended by mutual written agreement of the
542division and the Internet poker hub operator.
543     (d)  If this section is amended, an Internet poker hub
544operator may declare the contract null and void within 60 days
545after the effective date of the amendment and must provide at
546least 90 days' prior written notice to the division of such
547intent; otherwise, the Internet poker hub operator agrees to be
548bound by the amendments to this section adopted after the terms
549of the contract are established.
550     (e)  In the event of commercial infeasibility due to a
551change in federal law rendering the provision of intrastate
552poker services illegal, an Internet poker hub operator may
553abandon the contract after providing the division with at least
55490 days' prior written notice of its intent to end the contract
555and a statement explaining its interpretation that continuing to
556provide services under the contract is commercially infeasible.
557     (f)  If a dispute arises between the parties to the
558contract, either the division or the Internet poker hub operator
559may go through an administrative law or circuit court for an
560initial interpretation of the contract and the rights and
561responsibilities in the contract.
562     (g)  After each year of operation of intrastate Internet
563poker in the state, the division shall review and evaluate the
564current level of liquidity in the state Internet poker network
565to determine if there is a need to authorize additional Internet
566poker hub operators. If the division finds there is sufficient
567evidence to support authorizing additional Internet poker hub
568operators, then the division may select additional Internet
569poker hub operators pursuant to subsection (6) and may authorize
570additional Internet poker hub operators based on the
571qualifications specified in subsection (7). However,
572notwithstanding the power to authorize additional Internet poker
573hub operators under this paragraph, only three Internet poker
574hub operators may operate at any one time in the state.
575     (11)  CARDROOM AFFILIATE LICENSE REQUIRED; APPLICATION;
576FEES.-A cardroom affiliate license may only be issued to a
577cardroom operator who is licensed under s. 849.086, actively
578operates a cardroom with a minimum of 10 licensed tables, and
579complies with all the requirements of s. 849.086 and the rules
580adopted pursuant to that section.
581     (a)  Only those persons holding a valid cardroom affiliate
582license issued by the division may provide intrastate Internet
583poker for play to registered players through its website.
584     (b)  After the initial cardroom affiliate license is
585granted, the annual application for the renewal of that license
586shall be made in conjunction with the applicant's annual
587application for its cardroom and pari-mutuel licenses under s.
588849.086 and chapter 550, respectively.
589     (c)  A person seeking a license or renewal of a license to
590operate as a cardroom affiliate shall make the application on
591forms prescribed by the division. An application for a cardroom
592affiliate license shall contain all of the information the
593division, by rule, determines is required to ensure eligibility.
594     (d)  As a condition of licensure and to maintain continued
595authority for the conduct of intrastate Internet poker, the
596cardroom affiliate licensee must provide the documentation
597required under this section on a timely basis to the division
598and the documentation must be appropriate, current, and
599accurate. A change in ownership or interest of a cardroom
600affiliate licensee of 5 percent or more of the stock or other
601evidence of ownership or equity in the cardroom affiliate
602licensee or any parent corporation or other business entity that
603in any way owns or controls the cardroom affiliate licensee must
604be approved by the division prior to the change, unless the
605owner is an existing holder of the license who was previously
606approved by the division. A change in ownership or interest of a
607cardroom affiliate licensee of less than 5 percent, unless the
608change results in a cumulative total of 5 percent or more, must
609be reported to the division within 20 days after the change. The
610division may then conduct an investigation to ensure that the
611license is properly updated to show the change in ownership or
612interest. Reporting is not required under this paragraph if the
613person is holding 5 percent or less of the equity or securities
614of a corporate owner of the cardroom affiliate licensee that has
615its securities registered pursuant to s. 12 of the Securities
616Exchange Act of 1934, 15 U.S.C. ss. 78a-78kk, and if the
617corporation or entity files with the United States Securities
618and Exchange Commission the reports required by s. 13 of that
619act or if the securities of the corporation or entity are
620regularly traded on an established securities market in the
621United States. A change in ownership or interest of less than 5
622percent which results in a cumulative ownership or interest of 5
623percent or more must be approved by the division before the
624change, unless the owner is an existing holder of the license
625who was previously approved by the division.
626     (e)  As a condition of eligibility for license renewal, a
627cardroom affiliate must have an active and operating portal and
628must have contributed at least 5 percent of the total revenue
629generated from the play of intrastate Internet poker from the
630previous state fiscal year, as determined by the division.
631     (f)  A cardroom affiliate licensee may not sell or lease
632all or any portion of its cardroom licensed under s. 849.086 to
633any person or entity, or contract with any person or entity to
634operate its website, conduct marketing or promotional
635activities, or conduct any other aspects of business associated
636with the play of poker under s. 849.086 or intrastate Internet
637poker under this section, that does not meet and comply with all
638requirements and provisions of this section and s. 849.086.
639     (g)  The annual cardroom affiliate license fee shall be
640$1,000. The annual license fee shall be deposited by the
641division with the Chief Financial Officer to the credit of the
642Pari-mutuel Wagering Trust Fund.
643     (h)  The division shall adopt rules regarding cardroom
644affiliate licenses and renewals.
645     (12)  BUSINESS AND EMPLOYEE OCCUPATIONAL LICENSE REQUIRED;
646APPLICATION; FEES.-
647     (a)  A person employed by or otherwise working for an
648Internet poker hub operator or a cardroom affiliate in any
649capacity related to and while conducting intrastate Internet
650poker operations must hold a valid occupational license issued
651by the division.
652     (b)  An Internet poker hub operator or a cardroom affiliate
653may not employ or allow to be employed any person in any
654capacity related to the operation of intrastate Internet poker
655unless the person holds a valid occupational license.
656     (c)  An Internet poker hub operator or cardroom affiliate
657may not contract with, or otherwise do business with, a business
658required to hold a valid intrastate Internet poker business
659occupational license, unless the business holds such a valid
660license.
661     (d)  A proprietorship, partnership, corporation,
662subcontractor, or other entity must obtain a valid intrastate
663Internet poker business occupational license issued by the
664division to partner with, contract with, be associated with, or
665participate in the conduct of intrastate Internet poker
666operations with an Internet poker hub operator or a cardroom
667affiliate.
668     (e)  The division shall establish, by rule, a schedule for
669the annual renewal of Internet poker hub operator and cardroom
670affiliate occupational licenses. Intrastate Internet poker
671occupational licenses are not transferable.
672     (f)  A person seeking an intrastate Internet poker
673occupational license, or renewal of such a license, shall make
674the application on forms prescribed by the division and include
675payment of the appropriate application fee. An application for
676an intrastate Internet poker occupational license shall contain
677all of the information the division, by rule, determines is
678required to ensure eligibility under this section.
679     (g)  The division shall adopt rules regarding intrastate
680Internet poker occupational licenses and renewals.
681     (h)  An intrastate Internet poker occupational license is
682valid for the same term as a pari-mutuel occupational license
683issued under s. 550.105(1).
684     (i)  Pursuant to rules adopted by the division, any person
685may apply for and, if qualified, be issued an intrastate
686Internet poker occupational license valid for a period of 3
687years upon payment of the full occupational license fee for each
688of the 3 years for which the license is issued. The intrastate
689Internet poker occupational license is valid during its
690specified term at any Internet poker hub operator or a cardroom
691affiliate where intrastate Internet poker is authorized to be
692conducted.
693     (j)  The intrastate Internet poker occupational license fee
694for initial application and annual renewal shall be determined
695by rule of the division but may not exceed $50 for an
696occupational license for an employee of an Internet poker hub
697operator or a cardroom affiliate licensee or $1,000 for a
698business occupational license for nonemployees of the licensee
699providing goods or services to an Internet poker hub operator or
700a cardroom affiliate occupational licensee. Failure to pay the
701required fee constitutes grounds for disciplinary action by the
702division against an Internet poker hub operator or a cardroom
703affiliate occupational licensee.
704     (k)  A person holding a valid individual cardroom
705occupational license issued by the division under s. 849.086(6)
706is not required to obtain an individual employee occupational
707license under this subsection.
708     (13)  BUSINESS AND EMPLOYEE OCCUPATIONAL LICENSE DENIAL,
709REVOCATION, SUSPENSION, LIMITATION, OR NONRENEWAL.-The division
710may:
711     (a)  Deny an application for, or revoke, suspend, or place
712conditions or restrictions on, a license of a person or entity
713that has been refused a license by any other state gaming
714commission, governmental department, agency, or other authority
715exercising regulatory jurisdiction over the gaming of another
716state or jurisdiction.
717     (b)  Deny an application for, or suspend or place
718conditions or restrictions on, a license of any person or entity
719that is under suspension or has unpaid fines in another state or
720jurisdiction.
721     (c)  Deny, suspend, revoke, or refuse to renew any Internet
722poker hub operator or cardroom affiliate occupational license if
723the applicant for the license or the licensee has violated this
724section or the rules of the division governing the conduct of
725persons connected with the play of intrastate Internet poker.
726     (d)  Deny, suspend, revoke, or refuse to renew any Internet
727poker hub operator or cardroom affiliate occupational license if
728the applicant for the license or the licensee has been convicted
729in this state, in any other state, or under the laws of the
730United States of a capital felony, a felony, or an offense in
731any other state that would be a felony under the laws of this
732state involving arson; trafficking in, conspiracy to traffic in,
733smuggling, importing, conspiracy to smuggle or import, or
734delivery, sale, or distribution of a controlled substance;
735racketeering; or a crime involving a lack of good moral
736character, or has had a gaming license revoked by this state or
737any other jurisdiction for any gaming-related offense.
738     (e)  Deny, revoke, or refuse to renew any Internet poker
739hub operator or cardroom affiliate occupational license if the
740applicant for the license or the licensee has been convicted of
741a felony or misdemeanor in this state, in any other state, or
742under the laws of the United States if such felony or
743misdemeanor is related to gambling or bookmaking as described in
744s. 849.25.
745     (14)  BUSINESS AND EMPLOYEE OCCUPATIONAL LICENSE;
746FINGERPRINTS; FEES; CITATIONS.-
747     (a)  A person employed by or working with an Internet poker
748hub operator or a cardroom affiliate must submit fingerprints
749for a criminal history record check and may not have been
750convicted of any disqualifying criminal offense specified in
751subsection (7). Division employees and law enforcement officers
752assigned by their employing agencies to work within the premises
753as part of their official duties are excluded from the criminal
754history record check requirements under this subsection.
755     (b)  Fingerprints for all intrastate Internet poker
756occupational license applications shall be taken in a manner
757approved by the division upon initial application, or as
758required thereafter by rule of the division, and shall be
759submitted electronically to the Department of Law Enforcement
760for state processing. The Department of Law Enforcement shall
761forward the fingerprints to the Federal Bureau of Investigation
762for national processing. The results of the criminal history
763record check shall be returned to the division for purposes of
764screening. The division requirements under this subsection shall
765be instituted in consultation with the Department of Law
766Enforcement.
767     (c)  The cost of processing fingerprints and conducting a
768criminal history record check for an intrastate Internet poker
769occupational license shall be borne by the person being checked.
770The Department of Law Enforcement may invoice the division for
771the fingerprints submitted each month.
772     (d)  All fingerprints submitted to the Department of Law
773Enforcement and required by this section shall be retained by
774the Department of Law Enforcement and entered into the statewide
775automated fingerprint identification system as authorized by s.
776943.05(2)(b) and shall be available for all purposes and uses
777authorized for arrest fingerprint cards entered into the
778statewide automated fingerprint identification system under s.
779943.051.
780     (e)  The Department of Law Enforcement shall search all
781arrest fingerprints received under s. 943.051 against the
782fingerprints retained in the statewide automated fingerprint
783identification system. Any arrest record that is identified with
784the retained fingerprints of a person subject to the criminal
785history screening requirements of this section shall be reported
786to the division. Each licensed facility shall pay a fee to the
787division for the cost of retention of the fingerprints and the
788ongoing searches under this paragraph. The division shall
789forward the payment to the Department of Law Enforcement. The
790amount of the fee to be imposed for performing these searches
791and the procedures for the retention of licensee fingerprints
792shall be as established by rule of the Department of Law
793Enforcement. The division shall inform the Department of Law
794Enforcement of any change in the license status of licensees
795whose fingerprints are retained under paragraph (d).
796     (f)  The division shall request the Department of Law
797Enforcement to forward the fingerprints to the Federal Bureau of
798Investigation for a national criminal history records check
799every 3 years following issuance of a license. If the
800fingerprints of a person who is licensed have not been retained
801by the Department of Law Enforcement, the person must file a
802complete set of fingerprints as provided for in paragraph (a).
803The division shall collect the fees for the cost of the national
804criminal history record check under this paragraph and shall
805forward the payment to the Department of Law Enforcement. The
806cost of processing fingerprints and conducting a criminal
807history record check under this paragraph for an intrastate
808Internet poker occupational license shall be borne by the person
809being checked. The Department of Law Enforcement may invoice the
810division for the fingerprints submitted each month. Under
811penalty of perjury, each person who is licensed or who is
812fingerprinted as required by this subsection must agree to
813inform the division within 48 hours if he or she is convicted of
814or has entered a plea of guilty or nolo contendere to any
815disqualifying offense, regardless of adjudication.
816     (g)  All moneys collected under this subsection shall be
817deposited into the Pari-mutuel Wagering Trust Fund.
818     (h)  The division may deny, revoke, or suspend any
819occupational license if the applicant or holder of the license
820accumulates unpaid obligations, defaults in obligations, or
821issues drafts or checks that are dishonored or for which payment
822is refused without reasonable cause.
823     (i)  The division may fine or suspend, revoke, or place
824conditions upon the license of any licensee who provides false
825information under oath regarding an application for a license or
826an investigation by the division.
827     (j)  The division may impose a civil fine of up to $10,000
828for each violation of this section or the rules of the division
829in addition to or in lieu of any other penalty provided for in
830this subsection. The division may adopt a penalty schedule for
831violations of this section or any rule adopted pursuant to this
832section for which it would impose a fine in lieu of a suspension
833and adopt rules allowing for the issuance of citations,
834including procedures to address such citations, to persons who
835violate such rules. In addition to any other penalty provided by
836law, the division may exclude from all licensed pari-mutuel,
837cardroom, and slot machine facilities in this state, for a
838period not to exceed the period of suspension, revocation, or
839ineligibility, any person whose occupational license application
840has been declared ineligible to hold an occupational license or
841whose occupational license has been suspended or revoked by the
842division.
843     (15)  REGISTERED PLAYERS; ELIGIBILITY.-
844     (a)  All registered players must be located within this
845state at the time of play of intrastate Internet poker.
846     (b)  A person who has not attained 18 years of age may not
847be a registered player or play intrastate Internet poker.
848     (c)  All Internet poker hub operators and cardroom
849affiliates shall exclude from play any person who has submitted
850a completed Internet Poker Self-Exclusion Form.
851     1.  All Internet poker hub operators and cardroom
852affiliates shall have an Internet Poker Self-Exclusion Form
853available online and accessible on the Internet page that is
854displayed when:
855     a.  A person opens the Internet page to register as a
856registered player; or
857     b.  A registered player accesses the first page of the
858Internet page prior to playing.
859     2.  Upon receipt of a completed Internet Poker Self-
860Exclusion Form, an Internet poker hub operator or cardroom
861affiliate shall immediately provide a copy of the completed form
862to each Internet poker hub operator, each cardroom affiliate,
863and the division. The division shall ensure that all other
864cardroom affiliates exclude the person from the play of
865intrastate Internet poker.
866     3.  Each Internet poker hub operator and cardroom affiliate
867shall retain the original form to identify persons who request
868to be excluded from play.
869     4.  Each Internet poker hub operator and cardroom affiliate
870shall prominently display a link to the website of a responsible
871gaming organization that is under contract with the division
872pursuant to s. 551.118(2) for services related to the prevention
873of compulsive and addictive gambling.
874     5.  A person may not bring any action against an Internet
875poker hub operator or a cardroom affiliate for negligence or any
876other claim if a person who has filled out an Internet Poker
877Self-Exclusion Form gains access and plays despite the request
878to be excluded.
879     (16)  INTRASTATE INTERNET POKER; AUTHORIZED GAMES.-
880     (a)  In order to offer a specific game of poker for play,
881an Internet poker hub operator shall provide the division with:
882     1.  A description of any game of poker and the betting
883rules it proposes to offer to registered players; and
884     2.  Documentation relating to development and testing of
885the game's software.
886     (b)  Upon submission of the information required in
887paragraph (a), an Internet poker hub operator may begin offering
888the game. If the division does not object to the proposed game
889of poker within 30 days after receipt of the submission, the
890game will considered authorized and the Internet poker hub
891operator submitting the proposal may continue to offer the game
892to registered players.
893     (c)  Games and betting events shall be operated strictly in
894accordance with the specified game and betting rules.
895     (d)  An Internet poker hub operator shall ensure that the
896authorized games of poker are fair. For each proposed or
897authorized game offered for play, the gaming system shall
898display the following information:
899     1.  The name of the game.
900     2.  Any restrictions on play.
901     3.  The rules of the game.
902     4.  All instructions on how to play.
903     5.  The unit and total bets permitted.
904     6.  The registered player's current account balance, which
905shall be updated in real time.
906     7.  Any other information that an Internet poker hub
907operator determines is necessary for the registered player to
908have in real time to compete fairly in the proposed or
909authorized game.
910     (e)  All proposed and authorized game results shall be
911conducted in such a fashion that:
912     1.  Data used to create results shall be unpredictable such
913that it is infeasible to predict the next occurrence in a game,
914given complete knowledge of the algorithm or hardware generating
915the sequence, and all previously generated numbers.
916     2.  The game or any game event outcome shall not be
917affected by the effective bandwidth, link utilization, bit error
918rate, or other characteristic of the communications channel
919between the gaming system and the playing device used by the
920player.
921     (f)  An Internet poker hub operator shall deploy controls
922and technology to ensure the ability to minimize fraud or
923cheating through collusion, such as external exchange of
924information between different players, or any other means.
925     1.  If an Internet poker hub operator becomes aware that
926fraud or cheating is taking place or has taken place, it shall
927immediately take steps to stop such activities and inform the
928division of all relevant facts.
929     2.  An Internet poker hub operator shall immediately inform
930the division of any complaints and investigate whether the
931complaints are true and shall expeditiously act to prevent
932further fraud or collusion from taking place on the Internet
933poker hub. An Internet poker hub operator shall report the
934results of the investigation in writing to the division within
93524 hours after the complaint and shall continue to report every
93624 hours until its investigation is concluded. This paragraph
937does not prevent the division from conducting an independent
938investigation or initiating an administrative action to protect
939registered players from fraud and collusion on the Internet
940poker hub site and does not prohibit a registered player, the
941Internet poker hub operator, a cardroom affiliate, or the
942division from reporting suspected criminal activities to law
943enforcement officials.
944     3.  A registered player may not bring an action for damages
945against an Internet poker hub operator for attempting to prevent
946fraud or cheating if the Internet poker hub operator can
947demonstrate that it acted to prevent such actions as soon as it
948became aware of them.
949     (g)  If the gaming server or software does not allow a game
950to be completed, the hand shall be voided and all funds relating
951to the incomplete hand shall be returned to the registered
952player's account.
953     (17)  REGISTERED PLAYER ACCOUNTS.-
954     (a)  An Internet poker hub operator shall register players
955and establish registered player accounts prior to play and shall
956ensure that personally identifiable information is accessible to
957players and regulators but is otherwise secure.
958     (b)  A person may not participate in any game on a state
959Internet poker network unless the person is registered as a
960player and holds an account.
961     (c)  Accounts may be established in person or by mail,
962telephone, or any electronic means.
963     (d)  To register and establish an account, a person must
964provide the following registration information:
965     1.  First name and surname.
966     2.  Principal residence address.
967     3.  Telephone number.
968     4.  Social security number.
969     5.  Legal identification or certification to prove that the
970person is at least 18 years of age.
971     6.  Valid email address.
972     7.  The source of funds to be used to establish the account
973after the registration process is complete.
974     (e)  An individual may not register for more than three
975registered player accounts per calendar year. A registered
976player may not have more than three registered player accounts
977at any time.
978     (f)  Prior to completing the registration process, an
979Internet poker hub operator shall explain to the person in a
980conspicuous fashion the privacy policies of the Internet poker
981hub, and the person must assent to the following policies:
982     1.  Personal identifying information will not be shared
983with any nongovernment third parties except for licensed
984subcontractors of an Internet poker hub operator for the sole
985purpose of permitting registered players to participate in games
986on the Internet poker hub or upon receipt of a court order to
987subpoena such information from the Internet poker hub.
988     2.  All personally identifiable information about
989registered players will be shared with the division, the
990Department of Law Enforcement, and any other governmental agency
991that receives a court order to subpoena such information.
992     (g)  An Internet poker hub operator shall also require that
993a person agree to the terms of a use agreement applying to
994registered players.
995     (h)  An Internet poker hub operator shall provide a
996registered player with the means to update the information
997provided in paragraph (d).
998     (i)  An Internet poker hub operator may revoke the accounts
999of a registered player for the following reasons:
1000     1.  The registered player provided false information in the
1001registration process;
1002     2.  The registered player has not updated registration
1003information to keep it current; or
1004     3.  The registered player has violated an Internet poker
1005hub operator's terms of use agreement.
1006     (j)  An Internet poker hub operator may suspend or revoke
1007the account of a registered player if the operator suspects the
1008registered player has participated in illegal activity on a
1009state Internet poker network.
1010     (k)  An Internet poker hub operator shall establish and
1011maintain an account for each registered player. An Internet
1012poker hub operator shall:
1013     1.  Provide a means for a registered player to put funds
1014into an account; however, a registered player may not increase
1015the amount in an account after a game has started and before its
1016completion.
1017     2.  Maintain records on the balance of each registered
1018player's account.
1019     3.  Prohibit a registered player from placing a wager
1020unless the player's account has sufficient funds to cover the
1021amount of the wager.
1022     4.  Not provide credit to a registered player's account or
1023act as an agent for a credit provider to facilitate the
1024provision of funds.
1025     5.  Provide a means for a registered player to transfer
1026money out of the player's account.
1027     (l)  An Internet poker hub operator shall put in place
1028other systems that provide registered players with the ability
1029to control aspects of their play. Upon registration and at each
1030time when a registered player logs on to a state Internet poker
1031network, an Internet poker hub operator shall permit the
1032registered player to adjust the player's play settings to:
1033     1.  Set a limit on the deposits that can be made per day;
1034     2.  Set a limit on the amount that can be wagered within a
1035specified period of time;
1036     3.  Set a limit on the losses that may incur within a
1037specified period of time;
1038     4.  Set a limit on the amount of time that can be played
1039after logging on to the Internet poker hub; or
1040     5.  Prevent the Internet poker hub from allowing the
1041registered player to play for a definite or indefinite period of
1042time.
1043     (m)  During play, in order to assist a registered player to
1044decide whether to suspend play, the registered player's screen
1045shall:
1046     1.  Indicate how long the player has been playing;
1047     2.  Indicate the player's winnings or losses since the time
1048of last logging in;
1049     3.  Give an option to the player to end the session or
1050return to the game; and
1051     4.  Require the player to confirm that the player has read
1052the message.
1053     (18)  REGISTERED PLAYER ACCOUNTS; RECORDS AND REPORTS.-
1054     (a)  An Internet poker hub operator shall establish a book
1055of accounts, regularly audit, and make all financial records
1056available to the division. An Internet poker hub operator shall
1057demonstrate that it has a system of maintaining records and
1058reports that are readily available to the division. The records
1059and reports shall include the following:
1060     1.  Monthly auditable and aggregate financial statements of
1061gaming transactions.
1062     2.  Calculation of all fees payable to government.
1063     3.  The identity of players.
1064     4.  The balance on the player's account at the start of a
1065session of play.
1066     5.  The wagers placed on each game time stamped by the
1067games server.
1068     6.  The result of each game time stamped by the games
1069server.
1070     7.  The amount won or lost by the player.
1071     8.  The balance on the player's account at the end of the
1072game.
1073     (b)  An Internet poker hub operator shall reconcile all
1074data logs files regarding the registered players' accounts on a
1075monthly basis.
1076     (19)  INTERNET POKER HUB OPERATOR; TECHNICAL SYSTEMS
1077REQUIREMENTS.-
1078     (a)  An Internet poker hub operator shall put in place
1079technical systems that materially aid the division in fulfilling
1080its regulatory, consumer protection, and revenue-raising
1081functions and allow the division unrestricted access to and the
1082right to inspect the technical systems.
1083     (b)  An Internet poker hub operator shall ensure that the
1084network is protected from manipulation or tampering to affect
1085the random probabilities of winning plays.
1086     (c)  An Internet poker hub operator shall define and
1087document its methodology for the following:
1088     1.  The development, implementation, and maintenance of
1089gaming software in a manner representative of industry best
1090practice standards.
1091     2.  Server connectivity requirements that include:
1092     a.  Minimum game server connectivity requirements that
1093ensure players are protected from losses due to connectivity
1094problems.
1095     b.  The system's ability to recover all transactions
1096involving player funds in the event of a failure or malfunction.
1097     c.  Aborted game procedures.
1098     3.  Ability of the system to recover all information
1099required for viewing a game interrupted due to loss of
1100connectivity.
1101     4.  Consumer protection requirements.
1102     5.  Responsible advertising, marketing, and promotion that
1103ensure that players are not misled through advertising or
1104promotional activities, and will ensure that the terms and
1105conditions of their promotions are followed.
1106     6.  Anti-money-laundering controls.
1107     7.  Preventive and detective controls addressing money
1108laundering and fraud risks which shall be documented and
1109implemented.
1110     (d)  An Internet poker hub operator shall retain all such
1111documentation for at least 12 months.
1112     (20)  FEE FOR PARTICIPATION.-An Internet poker hub operator
1113shall charge a fee or a tournament fee to registered players for
1114the right to participate in authorized games or tournaments
1115conducted on a state Internet poker network. The participation
1116fee may be a per-hand charge, a flat fee, an hourly rate, or a
1117rake subject to the posted maximum amount but may not be based
1118on the amount won by players. The fee shall be designated and
1119conspicuously posted on the registered player's screen prior to
1120the start of each proposed or authorized game.
1121     (21)  PROHIBITED RELATIONSHIPS.-
1122     (a)  A proprietorship, partnership, corporation,
1123subcontractor, or other entity must obtain a valid intrastate
1124Internet poker business occupational license issued by the
1125division to partner with, contract with, be associated with, or
1126participate in the conduct of intrastate Internet poker
1127operations with an Internet poker hub operator or a cardroom
1128affiliate.
1129     (b)  A person employed by or performing any function on
1130behalf of the division may not:
1131     1.  Be an officer, director, owner, or employee of any
1132person or entity licensed by the division.
1133     2.  Have or hold any interest, direct or indirect, in or
1134engage in any commerce or business relationship with any person
1135licensed by the division.
1136     (c)  An employee of the division or a relative living in
1137the same household as the employee may not play at any time on a
1138state Internet poker network.
1139     (d)  An occupational licensee of an Internet poker hub
1140operator or a relative living in the same household as the
1141occupational licensee may not play at any time on a state
1142Internet poker network. This paragraph does not apply to an
1143occupational licensee of a cardroom affiliate.
1144     (22)  PROHIBITED ACTS; PENALTIES.-
1145     (a)  An Internet poker hub operator may conduct any
1146proposed or authorized game under subsection (16) unless
1147specifically prohibited by the division or by this section.
1148     (b)  A person who has not attained 18 years of age may not
1149hold an intrastate Internet poker occupational license or engage
1150in any game conducted therein.
1151     (c)  It is a violation of the laws of this state for any
1152entity to offer Internet poker for free or for money or any
1153other consideration to individuals present in this state unless
1154that entity can demonstrate that it is in compliance with the
1155laws and tax regulations of the United States and of this state.
1156     (d)  Any entity that has accepted any wager of money or
1157other consideration on any online gambling activity, including
1158poker, from any Florida resident since October 13, 2006, is not
1159eligible to apply for licensure and participate in intrastate
1160Internet poker in this state for a period of 3 years after the
1161effective date of this act.
1162     (e)  Except as otherwise provided by law and in addition to
1163any other penalty, any person who knowingly makes or causes to
1164be made, or aids, assists, or procures another to make, a false
1165statement in any report, disclosure, application, or any other
1166document required under this section or any rule adopted under
1167this section is subject to an administrative fine of up to
1168$10,000.
1169     (f)  Any person who manipulates or attempts to manipulate
1170the outcome, payoff, or operation of the play of intrastate
1171Internet poker by tampering, collusion, or fraud, or by the use
1172of any object, instrument, or device, by any means, commits a
1173felony of the third degree, punishable as provided in s.
1174775.082, s. 775.083, or s. 775.084.
1175     (g)  All penalties imposed and collected under this
1176subsection shall be deposited into the Pari-mutuel Wagering
1177Trust Fund.
1178     (23)  LICENSE FEES.-
1179     (a)  Upon the submission of the initial application for an
1180Internet poker hub operator license and annually thereafter, on
1181the anniversary date of the issuance of the initial license, an
1182Internet poker hub operator licensee shall pay a nonrefundable
1183license fee of $500,000 for the succeeding 12 months of
1184licensure.
1185     (b)  Upon submission of the initial application for a
1186cardroom affiliate license and annually thereafter, as
1187prescribed by the division, the licensee shall pay to the
1188division a nonrefundable license fee of $1,000 for the
1189succeeding 12 months of licensure.
1190     (c)  The license fees required under this subsection shall
1191be deposited into the Pari-mutuel Wagering Trust Fund to be used
1192by the division for the regulation, investigations, and
1193enforcement of the intrastate Internet poker provisions under
1194this section. These payments shall be accounted for separately
1195from taxes or fees paid pursuant to chapters 550 and 551 and s.
1196849.086.
1197     (24)  ADVANCE PAYMENT BY AN INTERNET POKER HUB OPERATOR.-
1198Upon the awarding of a contract to be an Internet poker hub
1199operator by the division under subsection (6), an Internet poker
1200hub operator licensee shall pay to the division a nonrefundable
1201payment of $10 million. This payment shall be treated as an
1202advance payment to the state by each Internet poker hub operator
1203and shall be credited against the tax on monthly gross receipts
1204derived from the play of intrastate Internet poker under
1205paragraph (25)(a) until the original amount is recouped by each
1206Internet poker hub operator.
1207     (25)  TAX RATE; OTHER PAYMENTS; PENALTIES.-
1208     (a)  Each Internet poker hub operator shall pay a tax to
1209the state of 10 percent of the operator's monthly gross receipts
1210derived from the play of intrastate Internet poker. However, an
1211Internet poker hub operator shall pay no taxes under this
1212paragraph until the full amount of the advance payment made by
1213that poker hub operator under subsection (24) has been credited
1214against the tax. Credit of the advance payment toward the tax
1215shall be made upon receipt by the division of the monthly report
1216required under paragraph (b).
1217     (b)  The gross receipts tax imposed by this section shall
1218be paid to the division. Each Internet poker hub operator shall
1219remit the gross receipts tax and licensee fees to the division
1220to be deposited with the Chief Financial Officer, to the credit
1221of the Pari-mutuel Wagering Trust Fund. Such payments shall be
1222remitted to the division by electronic funds transfer on the 5th
1223day of each calendar month for taxes and fees imposed for the
1224preceding month's intrastate Internet poker activities.
1225Licensees shall file a report under oath by the 5th day of each
1226calendar month for all taxes remitted during the preceding
1227calendar month. Such payments shall be accompanied by a report
1228under oath showing all intrastate Internet poker activities for
1229the preceding calendar month and such other information as may
1230be prescribed by the division.
1231     (c)  A licensee who fails to make tax payments as required
1232under this section is subject to an administrative penalty of up
1233to $10,000 for each day the tax payment is not remitted. All
1234penalties imposed and collected under this subsection shall be
1235deposited in the Pari-mutuel Wagering Trust Fund. If a licensee
1236fails to pay penalties imposed by order of the division under
1237this subsection, the division may suspend, revoke, or refuse to
1238renew the license of an Internet poker hub operator or cardroom
1239affiliate.
1240     (d)  All of the moneys deposited in the Pari-mutuel
1241Wagering Trust Fund under this section shall be utilized and
1242distributed in the manner specified in s. 550.135(1) and (2).
1243     (26)  DISTRIBUTION OF INCOME DERIVED FROM THE PLAY OF
1244INTERNET POKER.-
1245     (a)  After the tax on the monthly gross receipts derived
1246from the play of intrastate Internet poker is paid to the state
1247as specified under subsection (25), the remaining monthly gross
1248receipts shall be distributed by the Internet poker hub
1249operators as follows:
1250     1.  Seventy percent shall be distributed to eligible
1251licensed cardrooms and cardroom affiliates.
1252     a.  Before distribution under sub-subparagraph b., if the
1253amount to be distributed under this subparagraph for a specific
1254month is greater than $35,000 multiplied by the number of
1255cardrooms eligible to be cardroom affiliates for that month,
1256each licensed cardroom operator as defined in s. 894.086 that
1257did not participate as a cardroom affiliate for that month shall
1258receive a payment for that month of $20,833, and the remaining
1259sum shall be distributed pursuant to sub-subparagraph b.
1260     b.(I)  Fifty percent shall be divided and distributed among
1261the cardroom affiliates based on each cardroom affiliate's total
1262rake generated from the play of authorized games defined in s.
1263849.086(2)(a) for the previous state fiscal year divided by the
1264total previous year's rake for all the cardroom affiliates, as
1265determined by the division.
1266     (II)  Fifty percent shall be divided and distributed to the
1267cardroom affiliates based on the amount wagered for the previous
1268month through each cardroom affiliate's portal as determined by
1269the division, divided by the total amount wagered for the
1270previous month through all cardroom affiliates' portals.
1271     c.  If two or more cardroom affiliates join together to
1272operate a portal for purposes of sub-sub-subparagraphs b.(I) and
1273(II), their portal wagers and previous year's rake shall be
1274combined.
1275     d.  Each greyhound and each jai alai permitholder that
1276receives payments under this subparagraph shall use at least 4
1277percent of its monthly gross receipts from the play of
1278intrastate Internet poker to supplement greyhound purses or jai
1279alai prize money, respectively, by the permitholder's next
1280ensuing pari-mutuel meet. Each thoroughbred, quarter horse, or
1281harness horse permitholder that is licensed as a cardroom
1282affiliate shall use at least 50 percent of the permitholder's
1283monthly net proceeds from the play of intrastate Internet poker
1284as follows: 47 percent to supplement purses and 3 percent to
1285supplement breeders' awards by the permitholder's next ensuing
1286race meet.
1287     2.  Twenty-five percent shall be retained by the Internet
1288poker hub operators from which they shall pay all costs for the
1289intrastate Internet poker hub operations.
1290     3.  Four percent shall be retained by the Internet poker
1291hub operators to fund statewide advertising, marketing, and
1292promotion of the play of intrastate Internet poker on a state
1293Internet poker network. The division shall perform an annual
1294audit to verify that the Internet poker hub operators use such
1295funds solely for the statewide advertising, marketing, and
1296promotion of the play of intrastate Internet poker on a state
1297Internet poker network.
1298     4.  One percent shall fund services related to the
1299prevention and treatment of compulsive and addictive gambling
1300provided by the entity that is under contract with the division
1301under s. 551.118(2). The division shall be responsible for the
1302distribution and audit of the funds under this subparagraph.
1303     (b)  The distribution of the preceding monthly gross
1304receipts shall be by the 20th day of each calendar month.
1305     (c)  The division shall ensure that all distributions are
1306made in accordance with this section and may adopt rules to
1307ensure the implementation and proper distribution of funds.
1308     (d)  This subsection does not prevent individual cardrooms
1309or a number of cardroom affiliates from joining together in a
1310coalition for the purpose of the marketing and promotion of the
1311play of intrastate Internet poker on a state Internet poker
1312network.
1313     (27)  SUSPENSION, REVOCATION, OR DENIAL OF LICENSE; FINE.-
1314     (a)  The division may deny a license or the renewal of a
1315license, or may suspend or revoke any license, when the
1316applicant has: violated or failed to comply with section or any
1317rule adopted pursuant to this section; knowingly caused, aided,
1318abetted, or conspired with another to cause any person to
1319violate this section or any rule adopted pursuant to this
1320section; or obtained a license or permit by fraud,
1321misrepresentation, or concealment; or if the holder of the
1322license is no longer eligible under this section.
1323     (b)  If a cardroom affiliate's pari-mutuel permit or
1324license is suspended or revoked by the division pursuant to
1325chapter 550, or its cardroom operator's license is suspended or
1326revoked by the division pursuant to s. 849.086, the division
1327may, but is not required to, suspend or revoke the cardroom
1328affiliate's license. If a cardroom affiliate's license is
1329suspended or revoked under this section, the division may, but
1330is not required to, suspend or revoke the licensee's cardroom
1331operator's license.
1332     (c)  Notwithstanding any other provision of this section,
1333the division may impose an administrative fine not to exceed
1334$10,000 for each violation against any person who has violated
1335or failed to comply with this section or any rule adopted
1336pursuant to this section.
1337     (28)  PENALTIES.-The division may revoke or suspend any
1338Internet poker hub operator license or cardroom affiliate
1339license issued under this section upon the willful violation by
1340the licensee of this section or any rule adopted pursuant to
1341this section. In lieu of suspending or revoking the license, the
1342division may impose an administrative fine, not exceeding
1343$100,000 for each count or separate offense, upon an Internet
1344poker hub operator or a cardroom affiliate for willfully
1345violating this section or any rule adopted pursuant to this
1346section. All penalties imposed and collected under this section
1347shall be deposited into the Pari-mutuel Wagering Trust Fund.
1348     (29)  RULEMAKING.-The division may adopt rules pursuant to
1349ss. 120.536(1) and 120.54 to administer the provisions of this
1350section.
1351     (30)  LEGISLATIVE AUTHORITY; ADMINISTRATION OF SECTION.-The
1352Legislature finds and declares that it has exclusive authority
1353over the conduct of intrastate Internet poker in this state.
1354Only the Division of Pari-mutuel Wagering and other authorized
1355state agencies shall administer this section and regulate the
1356intrastate Internet poker industry in the state, including
1357operation of all Internet poker hub operators and cardroom
1358affiliates, play of authorized games, and the Internet poker
1359computer systems authorized in this section, as provided by law
1360and rules adopted by the division.
1361     Section 3.  This act shall take effect July 1, 2011.


CODING: Words stricken are deletions; words underlined are additions.