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H.F. No. 2540 - Fantasy Sports Game Definition and Authorization (First Unofficial Engrossment)
 
Author: Senator Sandra L. Pappas
 
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
 
Date: May 10, 2016



 

Section 1 [Consumer Protection; Fantasy Sports] establishes registration requirements for fantasy game operators who offer games with an entry fee.

Subdivision 1 [Fantasy game operation requirements] requires game operators who offer a fantasy game with an entry fee to a person located in the state to implement commercially reasonable procedures to:

  • prevent employees of the game operator and certain relatives of employees from competing in a game that requires an entry fee and awards a cash prize over $5;
  • prevent sharing of gaming information that could affect fantasy game play;
  • prevent a game operator employee from participating in a fantasy game;
  • verify that a player in a fantasy game with an entry is at least 18 years old;
  • prohibit a person who participates in a game or contest as a player or official from participating in a fantasy game that is determined by the accumulated statistical results of the game or contest;
  • make information available about resources for compulsive behavior;
  • provide ways for a person to restrict their own ability to enter a fantasy game;
  • disclose the number of entries in a single fantasy game that a person may submit and prevent players from submitting more than the allowable number;
  • segregate player funds from operational funds and maintain a reserve of a specified amount;
  • offer access to a player’s play history;
  • offer access to account details;
  • prevent a person from using a proxy server to enter the game’s operator’s platform;
  • prominently publish rules governing each fantasy game;
  • prohibit use of third-party scripts; prohibit a person found to be using such a script from playing in a fantasy game for a year or more;
  • develop and prominently publish procedures for a person to file a complaint with a game operator; and
  • disclose the terms of promotional offers at the time such offers are advertised, and provide full disclosure of limitations of the offer before a person provides financial consideration in exchange for the offer.

Subdivision 2 [Definitions] defines the terms “game operator,” “fantasy game,” and “entry fee” by cross-reference to a section in the Public Safety chapter.  Defines “script.”                                                                  

Subdivision 3 [Registration] requires a game operator to register annually with the Department of Public Safety.  Permits the commissioner to charge an annual registration fee of $500.  The fees are deposited in a special revenue account and appropriated to the commissioner.

Subdivision 4 [Audits] requires a game operator to contract annually with third parties for audits performed according to specified standards.  Requires the audit to be submitted to the commissioner of public safety.

Subdivision 5 [Civil remedies] authorizes a person who is injured by a violation of this section to bring a civil action to recover damages, costs, and disbursements and to obtain other equitable relief.

Subdivision 6 [Criminal penalty] makes a knowing violation of this section a gross misdemeanor.

Subdivision 7 [Investigations and powers] permits the commissioner of public safety to designate employees to investigate and arrest a person suspected of violating this section and to conduct searches and seizures.  Requires that employees authorized to make an arrest must be licensed as a peace officer. Specifies that this section does not limit the division’s authority to exercise powers specified under chapters relating to pari-mutuel horse racing, gambling enforcement, liquor control, lawful gambling, or the lottery.

Section 2 [Recovery of Money Lost] precludes recovery of money lost on betting on fantasy sports through a civil lawsuit.

Section 3 [Commitments for Gambling Debt Void] specifies that gambling debts relating to fantasy sports are not void under a statute that voids certain gambling debts.

Section 4 specifies that participating in or operating a fantasy game is not a crime. 

Subdivision 7 [Fantasy games]

Paragraph (a) defines the terms “entry fee,” “fantasy game,” and “game operator.” A “fantasy game” is a fantasy sports game if certain conditions are met, as follows:

  • the value of prizes and awards are disclosed in advance;
  • the operator of the game makes known the value of prizes before the game;
  • results are determined by accumulated statistical results of individuals’ performance; and
  • the outcome is not based on the score, point spread, or performance of a single team or combination of teams or solely on a single performance of an individual athlete or player in a single event;
  •  the result of a fantasy game is not based on any athlete participating on a team sponsored by a secondary or postsecondary school.

Paragraph (b) exempts a fantasy game conducted by a registered game operator from laws that make certain activity a crime.

Paragraph (c) specifies that laws prohibiting certain activity do not prohibit a registered game operator from offering a fantasy game.

 

 
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