Florida Senate - 2021 CS for SB 16-A By the Committee on Appropriations; and Senator Hutson 576-00042-21A 202116Ac1 1 A bill to be entitled 2 An act relating to the Fantasy Sports Contest 3 Amusement Act; creating s. 546.11, F.S.; providing a 4 short title; creating s. 546.12, F.S.; providing 5 legislative findings and intent; creating s. 546.13, 6 F.S.; defining terms; creating s. 546.14, F.S.; 7 providing for the enforcement and administration of 8 the Fantasy Sports Contest Amusement Act; authorizing 9 the Division of Pari-mutuel Wagering within the 10 Department of Business and Professional Regulation to 11 take certain actions; requiring the division to revoke 12 a contest operator’s license under certain 13 circumstances; authorizing the division to adopt 14 rules; creating s. 546.15, F.S.; providing application 15 requirements for fantasy sports contest operator 16 licenses; providing that specified persons or entities 17 are not eligible for licensure under certain 18 circumstances; defining the term “convicted”; 19 specifying that a contest operator license is 20 automatically suspended under certain circumstances; 21 providing an exception; creating s. 546.16, F.S.; 22 requiring a contest operator to implement specified 23 consumer protection procedures under certain 24 circumstances; defining the term “relative”; requiring 25 a contest operator to annually contract with a third 26 party to perform an independent audit; requiring a 27 contest operator to submit the audit results to the 28 division within a certain timeframe; requiring a 29 contest operator to use data sources that meet 30 specified requirements; creating s. 546.17, F.S.; 31 requiring contest operators to keep and maintain 32 certain records for a specified period; providing a 33 requirement for such records; requiring that such 34 records be available for audit and inspection; 35 requiring the division to adopt rules; creating s. 36 546.18, F.S.; providing a civil penalty; providing 37 applicability; exempting fantasy contests from certain 38 provisions in ch. 849, F.S.; amending s. 16.71, F.S.; 39 prohibiting the Governor from soliciting or requesting 40 certain information from a person with a license to 41 conduct fantasy sports contests; amending s. 16.712, 42 F.S.; conforming provisions to changes made by the 43 act; amending s. 16.713, F.S.; revising prohibitions 44 relating to appointment to and employment with the 45 division to include prohibitions relating to fantasy 46 sports contest licenses; amending s. 16.715, F.S.; 47 revising prohibitions relating to former commissioners 48 and employees of the commission to include 49 prohibitions relating to fantasy sports contest 50 licenses; creating s. 849.144, F.S.; specifying that 51 certain activities relating to fantasy sports contests 52 are not subject to certain gambling-related 53 prohibitions; amending SB 4A to include the regulation 54 of fantasy sports contests in a type two transfer 55 occurring on a certain date; providing a contingent 56 effective date. 57 58 Be It Enacted by the Legislature of the State of Florida: 59 60 Section 1. Section 546.11, Florida Statutes, is created to 61 read: 62 546.11 Short title.—Sections 546.11-546.18 may be cited as 63 the “Fantasy Sports Contest Amusement Act.” 64 Section 2. Section 546.12, Florida Statutes, is created to 65 read: 66 546.12 Legislative intent; findings.—It is the intent of 67 the Legislature to ensure public confidence in the integrity of 68 fantasy sports contests and contest operators. This act is 69 designed to regulate the contest operators and individuals who 70 participate in such contests and to enact consumer protections 71 related to fantasy sports contests. Furthermore, the Legislature 72 finds that fantasy sports contests, as that term is defined in 73 s. 546.13, involve the skill of contest participants. 74 Section 3. Section 546.13, Florida Statutes, is created to 75 read: 76 546.13 Definitions.—As used in ss. 546.11-546.18, the term: 77 (1) “Act” means ss. 546.11-546.18. 78 (2) “Confidential information” means information related to 79 the playing of fantasy sports contests by contest participants 80 which is obtained solely as a result of a person’s employment 81 with, or work as an agent of, a contest operator. 82 (3) “Contest operator” means a person or entity that offers 83 fantasy sports contests for a cash prize to members of the 84 public, but does not include a noncommercial contest operator in 85 this state. 86 (4) “Contest participant” means a person who pays an entry 87 fee for the ability to participate in a fantasy or simulation 88 sports game or contest offered by a contest operator or 89 noncommercial contest operator. 90 (5) “Division” means the Division of Pari-mutuel Wagering 91 of the Department of Business and Professional Regulation. 92 (6) “Entry fee” means the cash or cash equivalent amount 93 that is required to be paid by a person to a contest operator or 94 noncommercial contest operator to participate in a fantasy 95 sports contest. 96 (7) “Fantasy sports contest” means a fantasy or simulation 97 sports game or contest offered by a contest operator or a 98 noncommercial contest operator in which a contest participant 99 manages a fantasy or simulation sports team composed of athletes 100 from a professional sports organization and which meets each of 101 the following requirements: 102 (a) All prizes and awards offered to winning contest 103 participants are established and made known to the contest 104 participants in advance of the game or contest and their value 105 is not determined by the number of contest participants or the 106 amount of any fees paid by those contest participants. 107 (b) All winning outcomes reflect the relative knowledge and 108 skill of the contest participants and are determined 109 predominantly by accumulated statistical results of the 110 performance of individuals, including athletes in the case of 111 sporting events. 112 (c) No winning outcome is based on the score, point spread, 113 or any performance or performances of any single actual team or 114 combination of such teams; solely on any single performance of 115 an individual athlete or player in a single actual event; on a 116 pari-mutuel event, as the term “pari-mutuel” is defined in s. 117 550.002; on a game of poker or other card game; or on the 118 performances of participants in collegiate, high school, or 119 youth sporting events. 120 (d) No casino graphics, themes, or titles, including, but 121 not limited to, depictions of slot machine-style symbols, cards, 122 dice, craps, roulette, or lotto, are displayed or depicted. 123 (8) “Noncommercial contest operator” means a natural person 124 who organizes and conducts a fantasy or simulation sports 125 contest in which contest participants are charged entry fees for 126 the right to participate; entry fees are collected, maintained, 127 and distributed by the same natural person; the total entry fees 128 collected, maintained, and distributed by such natural person do 129 not exceed $1,500 per season or a total of $10,000 per calendar 130 year; and all entry fees are returned to the contest 131 participants in the form of prizes. 132 Section 4. Section 546.14, Florida Statutes, is created to 133 read: 134 546.14 Enforcement and administration; rulemaking.— 135 (1) The division shall enforce and administer this act. 136 (2) The division may: 137 (a) Conduct investigations and monitor the operation and 138 play of fantasy sports contests. 139 (b) Review the books, accounts, and records of any current 140 or former contest operator. 141 (c) Deny, suspend, or revoke any license under this act for 142 any violation of state law or rule. 143 (d) Take testimony, issue summons and subpoenas for any 144 witness, and issue subpoenas duces tecum in connection with any 145 matter within its jurisdiction. 146 (e) Monitor and ensure the proper collection and 147 safeguarding of entry fees and the payment of contest prizes in 148 accordance with consumer protection procedures enacted pursuant 149 to s. 546.16. 150 (f) Investigate any licensed or unlicensed person or entity 151 when such person or entity is advertising as offering or 152 providing, or is engaged in conducting, a fantasy sports contest 153 that requires licensure under this act or when a contest 154 operator or noncommercial contest operator is engaged in 155 activities that do not comply with or are prohibited by this 156 act. The division shall have the authority to issue an order to 157 such licensed or unlicensed person or entity or contest operator 158 or noncommercial contest operator to cease and desist the 159 further conduct of such activities, to seek an injunction, or to 160 take other appropriate action to enforce the requirements of 161 this act. 162 (3) The division shall revoke a contest operator’s license 163 if the contest operator offers fantasy sports contests that 164 violate s. 546.13(6)(c). 165 (4) The division shall adopt rules to implement and 166 administer this act. Such rules may not conflict with, and must 167 be applied, construed, and interpreted in a manner consistent 168 with, the gaming compact ratified, approved, and described in s. 169 285.710(3). 170 Section 5. Section 546.15, Florida Statutes, is created to 171 read: 172 546.15 Licensing.— 173 (1) A contest operator must be licensed by the division to 174 conduct fantasy sports contests within this state. 175 (2) The application must include: 176 (a) The full name of the applicant. 177 (b) If the applicant is a corporation, the name of the 178 state in which the applicant is incorporated and the names and 179 addresses of the officers, directors, and shareholders who hold 180 15 percent or more equity. 181 (c) If the applicant is a business entity other than a 182 corporation, the names and addresses of each principal, partner, 183 or shareholder who holds 15 percent or more equity. 184 (d) The names and addresses of the ultimate equitable 185 owners of the corporation or other business entity, if different 186 from those provided under paragraph (b) or paragraph (c), unless 187 the securities of the corporation or entity are registered 188 pursuant to s. 12 of the Securities Exchange Act of 1934, 15 189 U.S.C. ss. 78a-78kk, and: 190 1. The corporation or entity files with the United States 191 Securities and Exchange Commission the reports required by s. 13 192 of that act; or 193 2. The securities of the corporation or entity are 194 regularly traded on an established securities market in the 195 United States. 196 (e) The estimated number of fantasy sports contests to be 197 conducted by the applicant annually. 198 (f) A statement of the assets and liabilities of the 199 applicant. 200 (g) If required by the division, the names and addresses of 201 the officers and directors of any creditor of the applicant and 202 of stockholders who hold more than 10 percent of the stock of 203 the creditor. 204 (h) For each individual listed in the application pursuant 205 to paragraph (a), paragraph (b), paragraph (c), or paragraph 206 (d), a full set of fingerprints to be submitted to the division 207 or to a vendor, entity, or agency authorized by s. 943.053(13). 208 1. The division, vendor, entity, or agency shall forward 209 the fingerprints to the Department of Law Enforcement for state 210 processing, and the Department of Law Enforcement shall forward 211 the fingerprints to the Federal Bureau of Investigation for 212 national processing. 213 2. Fingerprints submitted to the Department of Law 214 Enforcement pursuant to this paragraph shall be retained by the 215 Department of Law Enforcement as provided in s. 943.05(2)(g) and 216 (h) and, when the Department of Law Enforcement begins 217 participation in the program, shall be enrolled in the Federal 218 Bureau of Investigation’s national retained print arrest 219 notification program. Any arrest record identified shall be 220 reported to the division by the Department of Law Enforcement. 221 (i) For each foreign national, such documents as necessary 222 to allow the division to conduct criminal history records checks 223 in the individual’s home country. The applicant must pay the 224 full cost of processing fingerprints and required documentation. 225 (3) A person or entity is not eligible for licensure as a 226 contest operator or for licensure renewal if an individual 227 required to be listed pursuant to paragraph (2)(a), paragraph 228 (2)(b), paragraph (2)(c), or paragraph (2)(d) is determined by 229 the division, after investigation, not to be of good moral 230 character or is found to have been convicted of a felony in this 231 state, any offense in another jurisdiction which would be 232 considered a felony if committed in this state, or a felony 233 under the laws of the United States. As used in this subsection, 234 the term “convicted” means having been found guilty, with or 235 without adjudication of guilt, as a result of a jury verdict, 236 nonjury trial, or entry of a plea of guilty or nolo contendere. 237 (4) The license of a contest operator is automatically 238 suspended upon entry of a final order imposing an administrative 239 fine against the contest operator, until the administrative fine 240 is paid, if 30 calendar days have elapsed since the entry of the 241 final order. The license of a contest operator may not be 242 renewed and an application for licensure as a contest operator 243 may not be approved if the contest operator or the applicant for 244 licensure as a contest operator is liable for an outstanding 245 administrative fine imposed under this act. Notwithstanding the 246 provisions of this subsection, a contest operator’s license may 247 not be suspended and an application for licensure as a contest 248 operator may not be denied if the contest operator or the 249 applicant has an appeal from a final order pending in any 250 appellate court. 251 Section 6. Section 546.16, Florida Statutes, is created to 252 read: 253 546.16 Consumer protection.— 254 (1) A contest operator must implement procedures for 255 fantasy sports contests which: 256 (a) Prevent its employees, their relatives, or persons 257 living in the same household as the employees from competing in 258 a fantasy sports contest in which a cash prize is awarded. 259 However, a contest operator may offer fantasy sports contests to 260 its employees in which the employees are the sole participants 261 in the contests. For the purposes of this paragraph, the term 262 “relative” means a spouse, father, mother, son, daughter, 263 grandfather, grandmother, brother, sister, uncle, aunt, cousin, 264 nephew, niece, father-in-law, mother-in-law, son-in-law, 265 daughter-in-law, brother-in-law, sister-in-law, stepfather, 266 stepmother, stepson, stepdaughter, stepbrother, stepsister, 267 half-brother, or half-sister. 268 (b) Prohibit the contest operator from being a contest 269 participant in a fantasy sports contest that he or she offers. 270 (c) Prevent its employees or agents from sharing with a 271 third party confidential information that could affect fantasy 272 sports contest play, until the information has been made 273 publicly available. 274 (d) Verify that contest participants are 21 years of age or 275 older. 276 (e) Restrict an individual who is a player, a game 277 official, or another participant in a real-world game or 278 competition from participating in a fantasy sports contest that 279 is determined, in whole or in part, on the performance of that 280 individual, the individual’s real-world team, or the accumulated 281 statistical results of the sport or competition in which he or 282 she is a player, game official, or other participant. 283 (f) Allow individuals to restrict or prevent their own 284 access to fantasy sports contests and take reasonable steps to 285 prevent those individuals from entering a fantasy sports 286 contest. 287 (g) Limit the number of entries a single contest 288 participant may submit to each fantasy sports contest and take 289 reasonable steps to prevent participants from submitting more 290 than the allowable number of entries. 291 (h) Segregate contest participants’ funds from operational 292 funds or maintain a reserve in the form of cash, cash 293 equivalents, payment processor reserves, payment processor 294 receivables, an irrevocable letter of credit, a bond, or a 295 combination thereof in the total amount of deposits in contest 296 participants’ accounts for the benefit and protection of 297 authorized contest participants’ funds held in fantasy sports 298 contest accounts. 299 (2)(a) A contest operator must annually contract with a 300 third party to perform an independent audit, consistent with the 301 standards established by the American Institute of Certified 302 Public Accountants, to ensure compliance with this act. The 303 contest operator shall submit the results of the independent 304 audit to the division no later than 90 days after the end of 305 each annual licensing period. 306 (b) Any data source and the corresponding data to determine 307 the results of all fantasy sports contests offered by contest 308 operators, other than noncommercial contest operators, must be 309 complete, accurate, reliable, and appropriate to settle the 310 outcome of the fantasy sports contests for which it is used. 311 Section 7. Section 546.17, Florida Statutes, is created to 312 read: 313 546.17 Records and reports.—Each contest operator shall 314 keep and maintain daily records of its operations and shall 315 maintain such records for at least 3 years. The records must 316 sufficiently detail all financial transactions required to 317 determine compliance with the requirements of this act and must 318 be available for audit and inspection by the division or other 319 law enforcement agencies during the contest operator’s regular 320 business hours. The division shall adopt rules to implement this 321 section. 322 Section 8. Section 546.18, Florida Statutes, is created to 323 read: 324 546.18 Penalties; applicability; exemption.— 325 (1)(a) A contest operator, or an employee or agent thereof, 326 who violates this act is subject to an administrative fine, not 327 to exceed $5,000 for each violation and not to exceed $100,000 328 in the aggregate. All fines imposed and collected under this 329 subsection must be deposited with the Chief Financial Officer to 330 the credit of the General Revenue Fund. An action to recover 331 such penalties may be brought by the division or the Department 332 of Legal Affairs in the name and on behalf of the state. 333 (b) The penalty provisions established in this subsection 334 do not apply to violations committed by a contest operator which 335 occurred prior to the issuance of a license under this act if 336 the contest operator applies for a license within 90 days after 337 the date the division begins accepting applications, and 338 receives a license within 240 days after such date. 339 (2) Fantasy sports contests conducted by a contest operator 340 or noncommercial contest operator in accordance with this act 341 are not subject to s. 849.01, s. 849.08, s. 849.09, s. 849.11, 342 s. 849.14, or s. 849.25. 343 Section 9. If SB 4A, 2021 Special Session A, becomes a law, 344 paragraph (b) of subsection (3) of section 16.71, Florida 345 Statutes, as created by SB 4A, 2021 Special Session A, is 346 amended to read: 347 16.71 Florida Gaming Control Commission; creation; 348 meetings; membership.— 349 (3) REQUIREMENTS FOR APPOINTMENT; PROHIBITIONS.— 350 (b) The Governor may not solicit or request any 351 nominations, recommendations, or communications about potential 352 candidates for appointment to the commission from: 353 1. Any person that holds a permit or license issued under 354 chapter 550, or a license issued under chapter 546, chapter 551, 355 or chapter 849; an officer, official, or employee of such 356 permitholder or licensee; or an ultimate equitable owner, as 357 defined in s. 550.002(37), of such permitholder or licensee; 358 2. Any officer, official, employee, or other person with 359 duties or responsibilities relating to a gaming operation owned 360 by an Indian tribe that has a valid and active compact with the 361 state; a contractor or subcontractor of such tribe or an entity 362 employed, licensed, or contracted by such tribe; or an ultimate 363 equitable owner, as defined in s. 550.002(37), of such entity; 364 or 365 3. Any registered lobbyist for the executive or legislative 366 branch who represents any person or entity identified in 367 subparagraph 1. or subparagraph 2. 368 Section 10. If SB 4A, 2021 Special Session A, becomes a 369 law, paragraph (i) of subsection (1) of section 16.712, Florida 370 Statutes, as created by SB 4A, 2021 Special Session A, is 371 amended to read: 372 16.712 Florida Gaming Control Commission authorizations, 373 duties, and responsibilities.— 374 (1) The commission shall do all of the following: 375 (i) Receive and review violations reported by a state or 376 local law enforcement agency, the Department of Law Enforcement, 377 the Department of Legal Affairs, the Department of Agriculture 378 and Consumer Services, the Department of Business and 379 Professional Regulation, the Department of the Lottery, the 380 Seminole Tribe of Florida, or any person licensed under chapter 381 24, part II of chapter 285, chapter 546, chapter 550, chapter 382 551, or chapter 849 and determine whether such violation is 383 appropriate for referral to the Office of Statewide Prosecution. 384 Section 11. If SB 4A, 2021 Special Session A, becomes a 385 law, paragraph (d) of subsection (1) and paragraph (a) of 386 subsection (2) of section 16.713, Florida Statutes, as created 387 by SB 4A, 2021 Special Session A, are amended to read: 388 16.713 Florida Gaming Control Commission; appointment and 389 employment restrictions.— 390 (1) PERSONS INELIGIBLE FOR APPOINTMENT TO THE COMMISSION. 391 All of the following people are ineligible for appointment to 392 the commission: 393 (d) A person who has had a license or permit issued under 394 chapter 546, chapter 550, chapter 551, or chapter 849 or a 395 gaming license issued by any other jurisdiction denied, 396 suspended, or revoked. 397 (2) PROHIBITIONS FOR EMPLOYEES AND COMMISSIONERS; PERSONS 398 INELIGIBLE FOR APPOINTMENT TO AND EMPLOYMENT WITH THE 399 COMMISSION.— 400 (a) A person may not, for the 2 years immediately preceding 401 the date of appointment to or employment with the commission and 402 while appointed to or employed with the commission: 403 1. Hold a permit or license issued under chapter 550 or a 404 license issued under chapter 546, chapter 551, or chapter 849; 405 be an officer, official, or employee of such permitholder or 406 licensee; or be an ultimate equitable owner, as defined in s. 407 550.002(37), of such permitholder or licensee; 408 2. Be an officer, official, employee, or other person with 409 duties or responsibilities relating to a gaming operation owned 410 by an Indian tribe that has a valid and active compact with the 411 state; be a contractor or subcontractor of such tribe or an 412 entity employed, licensed, or contracted by such tribe; or be an 413 ultimate equitable owner, as defined in s. 550.002(37), of such 414 entity; 415 3. Be or have been a member of the Legislature; 416 4. Be a registered lobbyist for the executive or 417 legislative branch, except while a commissioner when officially 418 representing the commission; or 419 5. Be a bingo game operator or an employee of a bingo game 420 operator. 421 Section 12. If SB 4A, 2021 Special Session A, becomes a 422 law, paragraphs (b) and (c) of subsection (2) of section 16.715, 423 Florida Statutes, as created by SB 4A, 2021 Special Session A, 424 are amended to read: 425 16.715 Florida Gaming Control Commission standards of 426 conduct; ex parte communications.— 427 (2) FORMER COMMISSIONERS AND EMPLOYEES.— 428 (b) A commissioner may not, for the 2 years immediately 429 following the date of resignation or termination from the 430 commission: 431 1. Hold a permit or license issued under chapter 550, or a 432 license issued under chapter 546, chapter 551, or chapter 849; 433 be an officer, official, or employee of such permitholder or 434 licensee; or be an ultimate equitable owner, as defined in s. 435 550.002(37), of such permitholder or licensee; 436 2. Accept employment by or compensation from a business 437 entity that, directly or indirectly, owns or controls a person 438 regulated by the commission; from a person regulated by the 439 commission; from a business entity which, directly or 440 indirectly, is an affiliate or subsidiary of a person regulated 441 by the commission; or from a business entity or trade 442 association that has been a party to a commission proceeding 443 within the 2 years preceding the member’s resignation or 444 termination of service on the commission; or 445 3. Be a bingo game operator or an employee of a bingo game 446 operator. 447 (c) A person employed by the commission may not, for the 2 448 years immediately following the date of termination or 449 resignation from employment with the commission: 450 1. Hold a permit or license issued under chapter 550, or a 451 license issued under chapter 546, chapter 551, or chapter 849; 452 be an officer, official, or employee of such permitholder or 453 licensee; or be an ultimate equitable owner, as defined in s. 454 550.002(37), of such permitholder or licensee; or 455 2. Be a bingo game operator or an employee of a bingo game 456 operator. 457 Section 13. Section 849.144, Florida Statutes, is created 458 to read: 459 849.144 Fantasy sports contest exemptions.—Sections 849.01, 460 849.08, 849.09, 849.11, 849.14, and 849.25 do not apply to 461 participation in or the conduct of fantasy sports contests 462 conducted pursuant to chapter 546. 463 Section 14. If SB 4A, 2021 Special Session A, becomes a 464 law, subsection (1) of section 11 of SB 4A, 2021 Special Session 465 A, is amended to read: 466 (1) Effective July 1, 2022, all powers, duties, functions, 467 records, offices, personnel, associated administrative support 468 positions, property, pending issues, existing contracts, 469 administrative authority, administrative rules, and unexpended 470 balances of appropriations, allocations, and other funds in the 471 Department of Business and Professional Regulation related to 472 the oversight responsibilities by the state compliance agency 473 for authorized gaming compacts under s. 285.710, Florida 474 Statutes, the regulation of fantasy sports contests under 475 chapter 546, Florida Statutes, the regulation of pari-mutuel 476 wagering under chapter 550, Florida Statutes, the regulation of 477 slot machines and slot machine gaming under chapter 551, Florida 478 Statutes, and the regulation of cardrooms under s. 849.086, 479 Florida Statutes, are transferred by a type two transfer, as 480 defined in s. 20.06(2), Florida Statutes, to the Florida Gaming 481 Control Commission within the Department of Legal Affairs, 482 Office of the Attorney General. 483 Section 15. This act shall take effect on the same date 484 that SB 2A or similar legislation takes effect, if such 485 legislation is adopted in the same legislative session or an 486 extension thereof and becomes a law.