HB56 By Representative Rowe RFD State Government Rd 1 02-FEB-16

SYNOPSIS: This bill would establish the Fantasy Contests Act to regulate the operation of fantasy or simulated contests in this state.

This bill would require fantasy contest operators to implement procedures for consumer protection of fantasy contest players, would require audits of fantasy contest operators, and would provide for civil penalties for violations.

This bill would also exempt fantasy contests from criminal penalties associated with gambling activity.

A BILL TO BE ENTITLED AN ACT

To establish the Fantasy Contests Act, to regulate fantasy and simulated contests; to provide for the definition of terms; to require certain fantasy contest operators to implement procedures for consumer protection of fantasy contest players; to require an audit of fantasy contest operators; to provide civil penalties for violations; to provide for enforcement by the Attorney General; and to exempt fantasy contests from certain criminal penalties associated with gambling activity.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the Fantasy Contests Act.

Section 2. For the purposes of this act, the following terms shall have the following meanings:

(1) CONFIDENTIAL INFORMATION. Information related to the play of a fantasy contest by fantasy contest players obtained as a result of or by virtue of a person's employment.

(2) ENTRY FEE. Cash or cash equivalent that is required to be paid by a fantasy contest player to a fantasy contest operator in order to participate in a fantasy contest.

(3) FANTASY CONTEST. Includes any fantasy or simulated game or contest, in which all of the following are satisfied:

a. The value of all prizes and awards offered to winning participants are established and made known to the participants in advance of the contest.

b. All winning outcomes reflect the relative knowledge and skill of the participants and shall be determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sports events.

c. No winning outcome is based on the score, point spread, or any performance or performances of any single actual team or combination of such teams or solely on any single performance of an individual athlete or player in any single actual event.

(4) FANTASY CONTEST OPERATOR. A person or entity that offers fantasy contests with an entry fee for a cash prize to members of the public.

(5) FANTASY CONTEST PLAYER. A person who participates in a fantasy contest offered by a fantasy contest operator.

Section 3. (a) A fantasy contest operator must implement procedures for fantasy contests with an entry fee that are intended to accomplish all of the following:

(1) Prevent employees of the fantasy contest operator, and relatives living in the same household as the employees, from competing in any fantasy contest offered by any fantasy contest operator in which the operator offers a cash prize.

(2) Prevent sharing of confidential information that could affect fantasy contest play with third parties until the information is made publicly available.

(3) Prevent the fantasy contest operator from being a participant in a fantasy game he or she offers.

(4) Verify that a fantasy contest player in a fantasy contest he or she offers is 18 years of age or older.

(5) Ensure that individuals who participate or officiate in a game or contest that is the subject of a fantasy contest is restricted from entering a fantasy contest that is determined, in whole or in part, on the accumulated statistical results of a team of individuals in the game or contest in which they are a player.

(6) Allow individuals to restrict themselves from entering a fantasy contest upon request and take reasonable steps to prevent those individuals from entering fantasy contests offered by the fantasy contest operator.

(7) Disclose the number of entries a single fantasy contest player may submit to each such fantasy contest and take reasonable steps to prevent players from submitting more than the allowable number.

(8) Segregate player funds from operational funds and maintain a reserve in the form of cash, cash equivalents, an irrevocable letter of credit, a bond, or a combination thereof, in the amount of the deposits in player accounts for the benefit and protection of authorized fantasy contest players' funds held in fantasy contest accounts.

(b) A fantasy contest operator offering fantasy contests with an entry fee in the state must annually contract a third party to perform an independent audit, consistent with generally accepted accounting standards, to ensure compliance with all of the requirements in this act. The fantasy contest operator must submit the results of the independent audit to the Attorney General.

(c) Any person, firm, corporation, association, agent, or employee who violates any provision of this section shall be liable for a civil penalty of not more than one thousand dollars ($1,000) for each such violation, which shall accrue to the state and may be recovered in a civil action brought by the Attorney General.

Section 4. Article 2 of Chapter 12 of Title 13A, Code of Alabama 1975, does not apply to a fantasy contest.

Section 5. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Fantasy Contests

Gambling

Consumers and Consumer Protection

Attorney General

Business and Commerce