Florida Senate - 2016 COMMITTEE AMENDMENT
Bill No. SPB 7072
Ì244100VÎ244100
LEGISLATIVE ACTION
Senate . House
Comm: OO .
02/19/2016 .
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The Committee on Regulated Industries (Negron) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Before line 208
4 insert:
5 Section 1. Section 546.11, Florida Statutes, is created to
6 read:
7 546.11 Short title.—Sections 546.11-546.20 may be cited as
8 the “Fantasy Contest Amusement Act.”
9 Section 2. Section 546.12, Florida Statutes, is created to
10 read:
11 546.12 Legislative intent.—It is the intent of the
12 Legislature to ensure public confidence in the integrity of
13 fantasy contests and fantasy contest operators. This act is
14 designed to strictly regulate the operators of fantasy contests
15 and individuals who participate in such contests and to adopt
16 consumer protections related to fantasy contests. Furthermore,
17 the Legislature finds that fantasy contests, as that term is
18 defined in s. 546.13, involve the skill of contest participants
19 and do not constitute gambling, gaming, or games of chance.
20 Section 3. Section 546.13, Florida Statutes, is created to
21 read:
22 546.13 Definitions.—As used in ss. 546.11-546.19, the term:
23 (1) “Confidential information” means information related to
24 the playing of fantasy contests by contest participants which is
25 obtained solely as a result of a person’s employment with or
26 work as an agent of a contest operator.
27 (2) “Contest operator” means a person or an entity other
28 than a noncommercial contest operator which offers fantasy
29 contests that require an entry fee for a cash prize to members
30 of the public.
31 (3) “Contest participant” means a person who pays an entry
32 fee for the ability to participate in a fantasy contest offered
33 by a contest operator.
34 (4) “Entry fee” means the cash or cash equivalent amount
35 that is required to be paid by a fantasy contest player to a
36 fantasy contest operator to participate in a fantasy contest.
37 (5) “Fantasy contest” means a fantasy or simulation sports
38 game or contest offered by a contest operator or a noncommercial
39 contest operator in which a contest participant manages a
40 fantasy or simulation sports team composed of athletes from an
41 amateur or professional sports organization and which meets the
42 following conditions:
43 (a) All prizes and awards offered to winning participants
44 are established and made known to the participants in advance of
45 the game or contest and their value is not determined by the
46 number of participants or the amount of any fees paid by those
47 participants.
48 (b) All winning outcomes reflect the relative knowledge and
49 skill of the participants and are determined predominantly by
50 accumulated statistical results of the performance of the
51 athletes participating in multiple real-world sporting or other
52 events. However, a winning outcome may not be based:
53 1. On the score, point spread, or any performance or
54 performances of a single real-world team or any combination of
55 such teams; or
56 2. Solely on any single performance of an individual
57 athlete in a single real-world sporting or other event.
58 (6) “Noncommercial contest operator” means a person who
59 organizes and conducts a fantasy contest, or who makes available
60 a fantasy contest software platform, in which participants may
61 be charged fees for the right to participate; fees are
62 collected, maintained, and distributed by the same person; and
63 all fees are returned to the players in the form of prizes.
64 (7) “Office” means the Office of Amusements created in s.
65 546.14.
66 Section 4. Section 546.14, Florida Statutes is created to
67 read:
68 546.14 Office of Amusements.—
69 (1) The Office of Amusements is created within the
70 Department of Business and Professional Regulation. The office
71 shall operate under the supervision of a senior manager exempt
72 under s. 110.205 in the Senior Management Service and appointed
73 by the secretary.
74 (2) The duties of the office include, but are not limited
75 to, administering and enforcing this act and any rules adopted
76 pursuant thereto and any other duties authorized by the
77 Secretary of Business and Professional Regulation. The office
78 may work with department personnel as needed to assist in
79 fulfilling its duties.
80 (3) The office may:
81 (a) Conduct investigations and monitor the operation and
82 play of fantasy contests.
83 (b) Review the books, accounts, and records of any current
84 or former contest operator.
85 (c) Suspend or revoke any license, after hearing, for any
86 violation of state law or rule.
87 (d) Take testimony, issue summons and subpoenas for any
88 witness, and issue subpoenas duces tecum in connection with any
89 matter within its jurisdiction.
90 (e) Monitor and ensure the proper collection and
91 safeguarding of contest fees and the payment of contest prizes
92 in accordance with consumer protection procedures adopted
93 pursuant to s. 546.16.
94 (4) The office may adopt rules to implement this act.
95 Section 5. Section 546.15, Florida Statutes, is created to
96 read:
97 546.15 Licensing.—
98 (1) A contest operator that offers fantasy contests for
99 play by persons in this state must be licensed by the office to
100 conduct fantasy contests within this state. The initial license
101 application fee is $500,000 and the annual license renewal fee
102 is $100,000, however, the respective fees may not exceed 10
103 percent of the amount of entry fees collected by a contest
104 operator from the operation of fantasy contests in this state,
105 less the amount of cash or cash equivalents paid to contest
106 participants. The office shall require the contest operator to
107 provide written evidence of the proposed amount of entry fees
108 and cash or cash equivalents to be paid to contest participants
109 during the annual license period. Prior to renewing a license,
110 the contest operator shall provide written evidence to the
111 office of the actual entry fees collected and cash or cash
112 equivalents paid to contest participants during the previous
113 period of licensure. The contest operator shall remit to the
114 office any difference in license fee that results from the
115 difference between the proposed amount of entry fees and cash or
116 cash equivalents paid to contest participants and the actual
117 amounts collected and paid.
118 (2) The office shall grant or deny a complete application
119 within 120 days after receipt, and a completed application that
120 is not acted upon by the office within 120 days after receipt is
121 deemed approved, and the office shall issue the license.
122 Applications for a contest operator’s license are exempt from
123 the 90-day licensure timeframe imposed in s. 120.60(1).
124 (3) The application must include:
125 (a) The full name of the applicant.
126 (b) If the applicant is a corporation, the name of the
127 state in which the applicant is incorporated and the names and
128 addresses of the officers, directors, and shareholders of the
129 corporation who hold 5 percent or more equity.
130 (c) If the applicant is a business entity other than a
131 corporation, the names and addresses of the principals,
132 partners, or shareholders who hold 5 percent or more equity.
133 (d) The names and addresses of the ultimate equitable
134 owners of the corporation or other business entity, if different
135 from those provided under paragraphs (b) and (c), unless the
136 securities of the corporation or entity are registered pursuant
137 to s. 12 of the Securities Exchange Act of 1934, 15 U.S.C. ss.
138 78a-78kk, and:
139 1. The corporation or entity files with the United States
140 Securities and Exchange Commission, the reports required by s.
141 13 of that act; or
142 2. The securities of the corporation or entity are
143 regularly traded on an established securities market in the
144 United States.
145 (e) The estimated number of fantasy sports contests to be
146 conducted by the applicant annually.
147 (f) A statement of the assets and liabilities of the
148 applicant.
149 (g) If required by the office, the names and addresses of
150 the officers and directors of any debtor of the applicant and of
151 stockholders who hold more than 10 percent of the stock of the
152 debtor.
153 (h) For each individual listed in the application as an
154 officer or director, a complete set of fingerprints taken by an
155 authorized law enforcement officer. The office shall submit such
156 fingerprints to the Federal Bureau of Investigation for national
157 processing. Foreign nationals shall submit such documents as
158 necessary to allow the office to conduct criminal history
159 records checks in the individual’s home country. The applicant
160 must pay the full cost of processing fingerprints and required
161 documentation. The office also may charge a $2 handling fee for
162 each set of fingerprints submitted.
163 (4) A person or entity is not eligible for licensure as a
164 contest operator or licensure renewal if he or she or an officer
165 or director of the entity is determined by the office, after
166 investigation, not to be of good moral character or if found to
167 have been convicted of a felony in this state, any offense in
168 another jurisdiction which would be considered a felony if
169 committed in this state, or a felony under the laws of the
170 United States. For purposes of this subsection, the term
171 “convicted” means having been found guilty, with or without
172 adjudication of guilt, as a result of a jury verdict, nonjury
173 trial, or entry of a plea of guilty or nolo contendere.
174 (5) The contest operator shall provide evidence of a surety
175 bond in the amount of $1 million, payable to the state,
176 furnished by a corporate surety authorized to do business. The
177 surety bond shall be kept in full force and effect by the
178 contest operator during the term of the license and any renewal
179 thereof. The office shall adopt by rule the form required for
180 such surety bond.
181 (6) The office may not issue a license pursuant to this
182 section unless the Gaming Compact between the Seminole Tribe of
183 Florida and the State of Florida, authorized pursuant to s.
184 285.710(3)(b), indicates that fantasy contests operated by such
185 fantasy contest operator do not violate any of the compact’s
186 provisions.
187 (7) The office may suspend, revoke, or deny the license of
188 a contest operator who fails to comply with this act or rules
189 adopted pursuant thereto.
190 Section 6. Section 546.16, Florida Statutes, is created to
191 read:
192 546.16 Consumer protection.—
193 (1) A contest operator who charges an entry fee to contest
194 participants shall implement procedures for fantasy sports
195 contests which:
196 (a) Prevent employees of the fantasy contest operator, and
197 relatives living in the same household as such employees, from
198 competing in a fantasy contest in which a cash prize is awarded.
199 (b) Prohibit the contest operator from being a contest
200 participant in a fantasy contest that he or she offers.
201 (c) Prevent the employees or agents of the contest operator
202 from sharing with third parties confidential information that
203 could affect fantasy contest play until the information has been
204 made publicly available.
205 (d) Verify that contest participants are 18 years of age or
206 older.
207 (e) Restrict an individual who is a player, a game
208 official, or another participant in a real-world game or
209 competition from participating in a fantasy contest that is
210 determined, in whole or in part, on the performance of that
211 individual, the individual’s real-world team, or the accumulated
212 statistical results of the sport or competition in which he or
213 she is a player, game official, or other participant.
214 (f) Allow individuals to restrict or prevent their own
215 access to a fantasy contest and take reasonable steps to prevent
216 those individuals from entering a fantasy sports contest.
217 (g) Limit the number of entries a single contest
218 participant may submit to each fantasy contest and take
219 reasonable steps to prevent participants from submitting more
220 than the allowable number of entries.
221 (h) Segregate contest participants’ funds from operational
222 funds and maintain a reserve in the form of cash, cash
223 equivalents, an irrevocable letter of credit, a bond, or a
224 combination thereof in the total amount of deposits in contest
225 participants’ accounts for the benefit and protection of
226 authorized contest participants’ funds held in fantasy contest
227 accounts.
228 (2) A contest operator that offers fantasy contests in this
229 state which require contest participants to pay an entry fee
230 shall annually contract with a third party to perform an
231 independent audit, consistent with the standards established by
232 the Public Company Accounting Oversight Board, to ensure
233 compliance with this act. The contest operator shall submit the
234 results of the independent audit to the office.
235 Section 7. Section 546.17, Florida Statutes is created to
236 read:
237 546.17 Records and reports.—
238 (1) Each contest operator shall keep and maintain daily
239 records of its operations relevant to compliance with ss. 546.15
240 and 546.16 and shall maintain such records for a period of at
241 least 3 years. The records must sufficiently detail all
242 financial transactions to determine compliance with the
243 requirements of this section and must be available for audit and
244 inspection by the office or other law enforcement agencies
245 during the contest operator’s regular business hours. The office
246 shall adopt rules to implement this subsection.
247 (2) Each contest operator shall file quarterly with the
248 office a report that includes the required records and any
249 additional information deemed necessary by the office. The
250 report shall be submitted on forms prescribed by the office, and
251 are deemed public records once filed.
252 Section 8. Section 546.18, Florida Statutes, is created to
253 read:
254 549.18 Consent required.—A contest operator who charges an
255 entry fee to contest participants shall ensure that any fantasy
256 contests involving horseracing have received the consent
257 specified in the Interstate Horseracing Act of 1978, 92 Stat.
258 1811, 15 U.S.C. ss. 3001 et seq.
259 Section 9. Section 546.19, Florida Statutes, is created to
260 read:
261 546.19 Penalties.—In addition to other applicable
262 administrative, civil, and criminal sanctions, a contest
263 operator, or an employee or agent thereof, who violates this act
264 is subject to a civil penalty not to exceed $5,000 for each
265 violation, not to exceed $100,000 in the aggregate, which shall
266 accrue to the state. An action to recover such penalties may be
267 brought by the office or the Department of Legal Affairs in the
268 circuit courts in the name and on behalf of the state.
269 Section 10. Section 546.20, Florida Statutes, is created to
270 read:
271 546.20 Exemption.—Fantasy contests conducted by a contest
272 operator or noncommercial contest operator in accordance with
273 this act are not subject to s. 849.01, s. 849.08, s. 849.09, s.
274 849.11, s. 849.14, or s. 849.25.
275 Section 11. The penalty provisions established by s.
276 546.18, Florida Statutes, do not apply to a contest operator who
277 applies for a license within 90 days after the effective date of
278 this act and receives a license within 240 days after the
279 effective date of this act.
280
281 ================= T I T L E A M E N D M E N T ================
282 And the title is amended as follows:
283 Delete line 2
284 and insert:
285 An act relating to gaming; creating s. 546.11, F.S.;
286 providing a short title; creating s. 546.12, F.S.;
287 providing legislative findings and intent; creating s.
288 546.13, F.S.; defining terms; creating s. 545.14,
289 F.S.; creating the Office of Amusements within the
290 Department of Business and Professional Regulation;
291 requiring that the office be under the supervision of
292 a senior manager who is exempt from the Career Service
293 System and is appointed by the secretary of the
294 department; providing duties of the office; providing
295 for rulemaking; creating s. 546.15, F.S.; providing
296 licensing requirements for contest operators offering
297 fantasy contests; requiring the office to grant or
298 deny a license within a specified timeframe; providing
299 that a completed application is deemed approved 120
300 days after receipt by the office under certain
301 circumstances; providing requirements for the license
302 application; providing that persons or entities are
303 not eligible for licensure under certain
304 circumstances; providing a definition; requiring a
305 contest operator to provide evidence of a surety bond;
306 requiring the surety bond to be kept during the term
307 of the license and any renewal term thereafter;
308 providing that a license may not be issued if it
309 violates the Gaming Compact; authorizing the office to
310 suspend, revoke, or deny a license under certain
311 circumstances; creating s. 546.16, F.S.; requiring a
312 contest operator to implement specified consumer
313 protection procedures; requiring a contest operator to
314 annually contract with a third party to perform an
315 independent audit; requiring a contest operator to
316 submit the audit results to the department; creating
317 s. 546.17, F.S.; requiring contest operators to keep
318 and maintain certain records for a specified period;
319 providing requirements; providing for rulemaking;
320 requiring a contest operator to file a quarterly
321 report with the office; creating s. 546.18, F.S.;
322 requiring a contest operator to obtain certain consent
323 for certain fantasy contests; creating s. 546.19,
324 F.S.; providing a civil penalty; creating s. 546.20,
325 F.S.; exempting fantasy contests from certain
326 provisions in ch. 849, F.S.; providing applicability
327 of penalty provisions; amending s. 550.002, F.S.;