MISSISSIPPI LEGISLATURE
2016 Regular Session
To: Judiciary, Division A
By: Senator(s) Tindell, Moran, Simmons (12th)
AN ACT TO CREATE THE FANTASY CONTEST ACT; TO PROVIDE THAT THE OPERATOR OF A FANTASY CONTEST WITH AN ENTRY FEE MUST IMPLEMENT CERTAIN PROCEDURES; TO PROVIDE THAT A FANTASY CONTEST OPERATOR OFFERING FANTASY CONTESTS WITH AN ENTRY FEE MUST CONTRACT WITH A THIRD PARTY TO ANNUALLY PERFORM AN INDEPENDENT AUDIT, TO ENSURE COMPLIANCE WITH THIS ACT; TO REQUIRE THE RESULTS TO BE SUBMITTED TO THE OFFICE OF CONSUMER PROTECTION; TO PROVIDE A CIVIL PENALTY FOR VIOLATIONS OF THIS ACT; TO PROVIDE THAT CERTAIN CIVIL AND CRIMINAL PENALTIES SHALL NOT APPLY TO FANTASY CONTEST OPERATORS WHO COMPLY WITH THE PROVISIONS OF THIS ACT; TO PROVIDE THAT THE GAMING CONTROL ACT SHALL NOT APPLY TO FANTASY CONTESTS; TO AMEND SECTIONS 75-24-19, 75-24-20 AND 75-76-5, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known as the "Fantasy Contest Act."
SECTION 2. As used in this act:
(a) "Confidential information" means 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.
(b) "Entry fee" means cash or cash equivalent that is required to be paid by a fantasy contest player to a fantasy contest operator to participate in a paid fantasy contest.
(c) "Fantasy contest" means a fantasy or simulated game or contest in which:
(i) The value of all prizes and awards offered to winning players is established and made known to the players in advance of the contest;
(ii) All winning outcomes reflect the relative knowledge and skill of the players and are determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sporting events; and
(iii) Winning outcomes are not based on the score,
point spread, or any performance of any single actual sports team or combination of such teams or solely on any single performance of an individual athlete in any single actual sporting event.
(d) "Fantasy contest operator" means a person or entity that offers fantasy contests with an entry fee and for a cash prize to one hundred (100) or more members of the general public.
(e) "Fantasy contest player" or "player" means a person who participates in a fantasy contest offered by a fantasy contest operator.
(f) "Office" means the Office of Consumer Protection as defined in Section 75-24-1, Mississippi Code of 1972.
SECTION 3. (1) Fantasy contests with an entry fee are legal in this state if the fantasy contest operator complies with the provisions of this section.
(2) A fantasy contest operator must implement procedures for fantasy contests with an entry fee that are intended to:
(a) Prevent employees of the fantasy contest operator, and relatives living in the same household as such employees, from competing in any such public fantasy contests offered by any fantasy contest operator in which the operator offers a cash prize;
(b) Prevent sharing of confidential information that could affect such fantasy contest play with third parties until the information is made publicly available;
(c) Prevent the fantasy contest operator from participating in such fantasy contest he or she offers;
(d) Verify that a fantasy contest player in such a fantasy contest is eighteen (18) years of age or older;
(e) Ensure that individuals who participate or officiate in a game or contest that is the subject of such a fantasy contest will be restricted from entering such a fantasy contest that is determined, in whole or in part, on the accumulated statistical results of a team of individuals in a fantasy contest in which he or she is a player;
(f) Allow individuals to restrict themselves from entering such a fantasy contest upon request and provide reasonable steps to prevent the person from entering such fantasy contests offered by the operator;
(g) Disclose the number of entries that a fantasy contest player may submit to each such fantasy contest and provide reasonable steps to prevent players from submitting more than the allowable number; and
(h) Segregate fantasy contest 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 made to the accounts of fantasy contest players for the benefit and protection of the funds held in such accounts.
(3) A fantasy contest operator offering fantasy contests with an entry fee in this state must contract with a third party to annually perform an independent audit, to ensure compliance with this section and submit the results of such audit to the office.
SECTION 4. A person, firm, corporation, association, agent or employee who violates this act shall be subject to a civil penalty of not more than One Thousand Dollars ($1,000.00) for each violation, which shall accrue to the state and may be recovered in a civil action brought by the office. Fantasy contest operators are exempt from civil penalties under Section 75-24-19 and criminal penalties under Section 75-24-20.
SECTION 5. The Gaming Control Act shall not apply to fantasy contests.
SECTION 6. Section 75-24-19, Mississippi Code of 1972, is amended as follows:
75-24-19. (1) Civil remedies.
(a) Any person who violated the terms of an injunction issued under Section 75-24-9 shall forfeit and pay to the state a civil penalty in a sum not to exceed Ten Thousand Dollars ($10,000.00) per violation which shall be payable to the General Fund of the State of Mississippi. For the purposes of this section, the chancery or county court issuing an injunction shall retain jurisdiction, and the cause shall be continued, and in such cases the Attorney General acting in the name of the state may petition for recovery of civil penalties.
(b) In any action brought under Section 75-24-9, if the court finds from clear and convincing evidence, that a person knowingly and willfully used any unfair or deceptive trade practice, method or act prohibited by Section 75-24-5, the Attorney General, upon petition to the court, may recover on behalf of the state a civil penalty in a sum not to exceed Ten Thousand Dollars ($10,000.00) per violation. One-half (1/2) of said penalty shall be payable to the Office of Consumer Protection to be deposited into the Attorney General's special fund. All monies collected under this section shall be used by the Attorney General for consumer fraud education and investigative and enforcement operations of the Office of Consumer Protection. The other one-half (1/2) shall be payable to the General Fund of the State of Mississippi. The Attorney General may also recover, in addition to any other relief that may be provided in this section, investigative costs and a reasonable attorney's fee.
(2) No penalty authorized by this section shall be deemed to limit the court's powers to insure compliance with its orders, decrees and judgments, or punish for the violations thereof.
(3) For purposes of this section, a knowing and willful violation occurs when the court finds from clear and convincing evidence that the party committing the violation knew or should have known that his conduct was a violation of Section 75-24-5.
(4) This section shall not apply to fantasy contest operators that comply with the provisions of Sections 1 through 6 of this act.
SECTION 7. Section 75-24-20, Mississippi Code of 1972, is amended as follows:
75-24-20. ( * * *1) Any person who, knowingly and
willfully, violates any provision of Section 75-24-5, shall be guilty of a
misdemeanor, and upon conviction shall be fined up to One Thousand Dollars
($1,000.00).
( * * *2) Upon a second conviction of any
person for a violation of any provision of Section 75-24-5, the offense being
committed within a period of five (5) years, such person shall be guilty of a
misdemeanor, and upon conviction shall be punished by imprisonment in the
county jail for up to one (1) year or fined up to One Thousand Dollars
($1,000.00) or both.
( * * *3) Upon a third or subsequent conviction
of any person for a violation of any provision of Section 75-24-5, the offense
being committed within a period of five (5) years, such person shall be guilty
of a felony, and upon conviction shall be punished by imprisonment of not less
than one (1) year nor more than five (5) years or fined not less than One
Thousand Dollars ($1,000.00) nor more than Five Thousand Dollars ($5,000.00) or
both.
( * * *4) Criminal convictions from other
states for violations of substantially similar provisions to those prohibited
by this chapter shall be counted for the purposes of determining if a violation
of this section is a first, second or third or subsequent offense.
(5) This section shall not apply to fantasy contest operators that comply with the provisions of Section 1 through 6 of this act.
SECTION 8. Section 75-76-5, Mississippi Code of 1972, is amended as follows:
75-76-5. As used in this chapter, unless the context requires otherwise:
(a) "Applicant" means any person who has applied for or is about to apply for a state gaming license, registration or finding of suitability under the provisions of this chapter or approval of any act or transaction for which approval is required or permitted under the provisions of this chapter.
(b) "Application" means a request for the issuance of a state gaming license, registration or finding of suitability under the provisions of this chapter or for approval of any act or transaction for which approval is required or permitted under the provisions of this chapter but does not include any supplemental forms or information that may be required with the application.
(c) "Associated equipment" means any equipment or mechanical, electromechanical or electronic contrivance, component or machine used remotely or directly in connection with gaming or with any game, race book or sports pool that would not otherwise be classified as a gaming device, including dice, playing cards, links which connect to progressive slot machines, equipment which affects the proper reporting of gross revenue, computerized systems of betting at a race book or sports pool, computerized systems for monitoring slot machines, and devices for weighing or counting money.
(d) "Chairman" means the Chairman of the Mississippi Gaming Commission except when used in the term "Chairman of the State Tax Commission." "Chairman of the State Tax Commission" or "commissioner" means the Commissioner of Revenue of the Department of Revenue.
(e) "Commission" or "Mississippi Gaming Commission" means the Mississippi Gaming Commission.
(f) "Commission member" means a member of the Mississippi Gaming Commission.
(g) "Credit instrument" means a writing which evidences a gaming debt owed to a person who holds a license at the time the debt is created, and includes any writing taken in consolidation, redemption or payment of a prior credit instrument.
(h) "Enforcement division" means a particular division supervised by the executive director that provides enforcement functions.
(i) "Establishment" means any premises wherein or whereon any gaming is done.
(j) "Executive director" means the Executive Director of the Mississippi Gaming Commission.
(k) Except as otherwise provided by law, "game," or "gambling game" means any banking or percentage game played with cards, with dice or with any mechanical, electromechanical or electronic device or machine for money, property, checks, credit or any representative of value, including, without limiting, the generality of the foregoing, faro, monte, roulette, keno, fan-tan, twenty-one, blackjack, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, or any other game or device approved by the commission. However, "game" or "gambling game" shall not include bingo games or raffles which are held pursuant to the provisions of Section 97-33-51, fantasy contests as defined in Section 2 of this act, or the illegal gambling activities described in Section 97-33-8.
The commission shall not be required to recognize any game hereunder with respect to which the commission determines it does not have sufficient experience or expertise.
(l) "Gaming" or "gambling" means to deal, operate, carry on, conduct, maintain or expose for play any game as defined in this chapter.
(m) "Gaming device" means any mechanical, electromechanical or electronic contrivance, component or machine used in connection with gaming or any game which affects the result of a wager by determining win or loss. The term includes a system for processing information which can alter the normal criteria of random selection, which affects the operation of any game, or which determines the outcome of a game. The term does not include a system or device which affects a game solely by stopping its operation so that the outcome remains undetermined, and does not include any antique coin machine as defined in Section 27-27-12.
(n) "Gaming employee" means any person connected directly with the operation of a gaming establishment licensed to conduct any game, including:
(i) Boxmen;
(ii) Cashiers;
(iii) Change personnel;
(iv) Counting room personnel;
(v) Dealers;
(vi) Floormen;
(vii) Hosts or other persons empowered to extend credit or complimentary services;
(viii) Keno runners;
(ix) Keno writers;
(x) Machine mechanics;
(xi) Security personnel;
(xii) Shift or pit bosses;
(xiii) Shills;
(xiv) Supervisors or managers; and
(xv) Ticket writers.
The term "gaming employee" also includes employees of manufacturers or distributors of gaming equipment within this state whose duties are directly involved with the manufacture, repair or distribution of gaming equipment.
"Gaming employee" does not include bartenders, cocktail waitresses or other persons engaged in preparing or serving food or beverages unless acting in some other capacity.
(o) "Gaming license" means any license issued by the state which authorizes the person named therein to engage in gaming.
(p) "Gross revenue" means the total of all of the following, less the total of all cash paid out as losses to patrons and those amounts paid to purchase annuities to fund losses paid to patrons over several years by independent financial institutions:
(i) Cash received as winnings;
(ii) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and
(iii) Compensation received for conducting any game in which the licensee is not party to a wager.
For the purposes of this definition, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses.
The term does not include:
(i) Counterfeit money or tokens;
(ii) Coins of other countries which are received in gaming devices;
(iii) Cash taken in fraudulent acts perpetrated against a licensee for which the licensee is not reimbursed; or
(iv) Cash received as entry fees for contests or tournaments in which the patrons compete for prizes.
(q) "Hearing examiner" means a member of the Mississippi Gaming Commission or other person authorized by the commission to conduct hearings.
(r) "Investigation division" means a particular division supervised by the executive director that provides investigative functions.
(s) "License" means a gaming license or a manufacturer's, seller's or distributor's license.
(t) "Licensee" means any person to whom a valid license has been issued.
(u) "License fees" means monies required by law to be paid to obtain or continue a gaming license or a manufacturer's, seller's or distributor's license.
(v) "Licensed gaming establishment" means any premises licensed pursuant to the provisions of this chapter wherein or whereon gaming is done.
(w) "Manufacturer's," "seller's" or "distributor's" license means a license issued pursuant to Section 75-76-79.
(x) "Navigable waters" shall have the meaning ascribed to such term under Section 27-109-1.
(y) "Operation" means the conduct of gaming.
(z) "Party" means the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding before the commission; or the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding for judicial review of any action, decision or order of the commission.
(aa) "Person" includes any association, corporation, firm, partnership, trust or other form of business association as well as a natural person.
(bb) "Premises" means land, together with all buildings, improvements and personal property located thereon, and includes all parts of any vessel or cruise vessel.
(cc) "Race book" means the business of accepting wagers upon the outcome of any event held at a track which uses the pari-mutuel system of wagering.
(dd) "Regulation" means a rule, standard, directive or statement of general applicability which effectuates law or policy or which describes the procedure or requirements for practicing before the commission. The term includes a proposed regulation and the amendment or repeal of a prior regulation but does not include:
(i) A statement concerning only the internal management of the commission and not affecting the rights or procedures available to any licensee or other person;
(ii) A declaratory ruling;
(iii) An interagency memorandum;
(iv) The commission's decision in a contested case or relating to an application for a license; or
(v) Any notice concerning the fees to be charged which are necessary for the administration of this chapter.
(ee) "Respondent" means any licensee or other person against whom a complaint has been filed with the commission.
(ff) "Slot machine" means any mechanical, electrical or other device, contrivance or machine which, upon insertion of a coin, token or similar object, or upon payment of any consideration, is available to play or operate, the play or operation of which, whether by reason of the skill of the operator or application of the element of chance, or both, may deliver or entitle the person playing or operating the machine to receive cash, premiums, merchandise, tokens or anything of value, whether the payoff is made automatically from the machine or in any other manner. The term does not include any antique coin machine as defined in Section 27-27-12.
(gg) "Sports pool" means the business of accepting wagers on sporting events, except for athletic events, by any system or method of wagering other than the system known as the "pari-mutuel method of wagering."
(hh) "State Tax Commission" or "department" means the Department of Revenue of the State of Mississippi.
(ii) "Temporary work permit" means a work permit which is valid only for a period not to exceed ninety (90) days from its date of issue and which is not renewable.
(jj) "Vessel" or "cruise vessel" shall have the meanings ascribed to such terms under Section 27-109-1.
(kk) "Work permit" means any card, certificate or permit issued by the commission, whether denominated as a work permit, registration card or otherwise, authorizing the employment of the holder as a gaming employee. A document issued by any governmental authority for any employment other than gaming is not a valid work permit for the purposes of this chapter.
(ll) "School or training institution" means any school or training institution which is licensed by the commission to teach or train gaming employees pursuant to Section 75-76-34.
(mm) "Cheat" means to alter the selection of criteria that determine:
(i) The rules of a game; or
(ii) The amount or frequency of payment in a game.
(nn) "Promotional activity" means an activity or event conducted or held for the purpose of promoting or marketing the individual licensed gaming establishment that is engaging in the promotional activity. The term includes, but is not limited to, a game of any kind other than as defined in paragraph (k) of this section, a tournament, a contest, a drawing, or a promotion of any kind.
SECTION 9. This act shall take effect and be in force from after July 1, 2016.