2016 -- H 7938

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LC004671

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

     RELATING TO BUSINESSES AND PROFESSIONS - FANTASY CONTESTS

     

     Introduced By: Representatives Barros, Shekarchi, Tobon, Blazejewski, and Solomon

     Date Introduced: March 11, 2016

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS"

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is hereby amended by adding thereto the following chapter:

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CHAPTER 89

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FANTASY CONTESTS ACT

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     5-89-1. Short title. -- This chapter shall be known and may be cited as the "Fantasy

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Contests Act".

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     5-89-2. Definitions. – As used in this chapter:

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     (1) "Confidential information" means information related to the play of a fantasy contest

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by fantasy contest players obtained as a result of or by virtue of a person's employment.

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     (2) "Department" means the department of business regulation.

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     (3) "Entry fee" means cash or cash equivalent that is required to be paid by a fantasy

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contest player to a fantasy contest operator to participate in a fantasy contest.

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     (4) "Fantasy contest" means a fantasy or simulated game or contest in which:

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     (i) The value of all prizes and awards offered to winning players is established and made

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known to the players in advance of the contest;

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     (ii) All winning outcomes reflect the relative knowledge and skill of the players and are

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determined predominantly by accumulated statistical results of the performance of individuals,

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including athletes in the case of sporting events; and

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     (iii) Winning outcomes are not based on the score, point spread, or any performance of

 

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any single actual sports team or combination of such teams or solely on any single performance

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of an individual athlete in any single actual sporting event.

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     (5) "Fantasy contest operator" means a person or entity that offers fantasy contests with

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an entry fee for a cash prize to the general public.

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     (6) "Fantasy contest player" means a person who participates in a fantasy contest offered

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by a fantasy contest operator.

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     5-89-3. Consumer protection. -- (a) A fantasy contest operator offering fantasy contests

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with an entry fee in the state shall register with the department. The annual registration fee shall

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be ten thousand dollars ($10,000).

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     (b) A fantasy contest operator shall implement procedures for fantasy contests with an

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entry fee that are intended to:

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     (1) Prevent employees of the fantasy contest operator, and relatives living in the same

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household as such employees, from competing in any such fantasy contests offered by any

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fantasy contest operator in which the operator offers a cash prize;

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     (2) Prevent sharing of confidential information that could affect such fantasy contest play

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with third parties until the information is made publicly available;

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     (3) Prevent the fantasy contest operator from participating in any fantasy contest which

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the fantasy contest operator offers;

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     (4) Verify that a fantasy contest player in such a fantasy contest is eighteen (18) years of

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age or older;

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     (5) Ensure that individuals who participate or officiate in a game or contest that is the

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subject of such a fantasy contest will be restricted from entering such a fantasy contest that is

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determined, in whole or in part, on the accumulated statistical results of a team of individuals in a

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fantasy contest in which they are a player;

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     (6) Allow individuals to restrict themselves from entering such a fantasy contest upon

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request and provide reasonable steps to prevent the person from entering the operator's fantasy

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contests;

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     (7) Disclose the number of entries that a fantasy contest player may submit to each

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fantasy contest and provide reasonable steps to prevent players from submitting more than the

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allowable number; and

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     (8) Segregate fantasy contest player funds from operational funds and maintain a reserve

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in the form of cash, cash equivalents, an irrevocable letter of credit, a bond, or a combination

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thereof, in the amount of the deposits made to the accounts of fantasy contest players for the

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benefit and protection of the funds held in such accounts.

 

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     (c) A fantasy contest operator offering fantasy contests with an entry fee in this state shall

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contract with a third party to annually perform an independent audit, consistent with the standards

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established by the Public Company Accounting Oversight Board, to ensure compliance with this

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section and submit the results of such audit to the department.

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     5-89-4. Violations. -- A person, firm, corporation, association, agent, or employee who

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violates this chapter is subject to a civil penalty of not more than one thousand dollars ($1,000)

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for each violation, which shall be paid to the state and may be recovered in a civil action brought

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by the department.

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     5-89-5. Exemptions. -- Fantasy contests, as defined in this chapter, are exempt from the

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gambling prohibitions in chapter 19 "Gambling and Lotteries" and chapter 51 "Organized

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Criminal Gambling" of title 11.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

     RELATING TO BUSINESSES AND PROFESSIONS - FANTASY CONTESTS

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     This act would establish the "Fantasy Contest Act" which would impose various

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consumer protection practices upon fantasy contest operators and would require them to register

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with the department of business regulation.

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     This act would take effect upon passage.

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