TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII
A BILL FOR AN ACT
relating to fantasy contests.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
fantasy contests act
§ -1 Short title. This chapter may be cited as the "Fantasy Contests Act".
§ -2 Definitions. As used in this chapter:
"Confidential information" means information related to the playing of a fantasy contest by fantasy contest players obtained as a result of or by virtue of a person's employment.
"Department" means the department of the attorney general.
"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.
"Fantasy contest" means any fantasy or simulated game or contest in which:
(1) The value of all prizes and awards offered to winning participants is established and made known to the participants in advance of the contest;
(2) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sporting events; and
(3) No winning outcome is based on the score, point spread, or any performance or performances of any single actual team or combination of teams or solely on any single performance of an individual athlete or player in any single actual event.
"Fantasy contest operator" means a person or entity that offers fantasy contests for a cash prize to members of the public.
"Fantasy contest player" means a person who participates in a fantasy contest offered by a fantasy contest operator.
"Paid fantasy contest" means a fantasy contest with an entry fee.
§ -3 Registration of fantasy contest operators. (a) Every fantasy contest operator shall register with the department prior to offering any fantasy contest for a cash prize to members of the public in the State.
(b) The department may make available a registration form to assist in the registration by fantasy contest operators.
(c) Each application for registration shall be accompanied by a fee in the amount of $25,000.
§ -4 Protection of players. (a) In connection with any paid fantasy contest, a fantasy contest operator shall:
(1) Prevent employees of the fantasy contest operator, and relatives living in the same household as those employees, from competing in any fantasy contest offered to the public 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 game operator from being a participant in a fantasy game offered by the fantasy contest operator;
(4) Verify that a fantasy contest player is at least eighteen years of age;
(5) Ensure that individuals who participate or officiate in a game or contest that is the subject of a fantasy contest will be 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 the fantasy contest operator's fantasy contests;
(7) Disclose the number of entries a single fantasy contest player may submit to each fantasy contest and take reasonable steps to prevent players from submitting more than the allowable number; and
(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) At least once during each calendar year, a fantasy contest operator offering fantasy contests in the State shall cause a certified public accountant licensed under chapter 466 to perform an independent audit, consistent with the standards established by the board of public accountancy, to ensure compliance with all of the requirements of this chapter. The fantasy contest operator shall submit the results of the independent audit to the department.
(c) This section shall only apply to paid fantasy contests.
§ -5 Penalties. Any person, firm, corporation, association, agent, or employee who violates any provision of this chapter shall be liable for a civil penalty of not more than $1,000 for each violation, which shall accrue to the State and may be recovered in a civil action brought by the department.
§ -6 Exemption from gambling. Fantasy contests operated by a fantasy contest operator that is registered under this chapter shall be exempt from part III of chapter 712, Hawaii Revised Statutes."
SECTION 2. Section 712-1220, Hawaii Revised Statutes, is amended by amending the definitions of "contest of chance" and "gambling" to read as follows:
""Contest of chance" means any
contest, game, gaming scheme, or gaming device in which the outcome depends in
a material degree upon an element of chance, notwithstanding that skill of the
contestants may also be a factor therein[
.]; provided that a contest
of chance shall not include a fantasy contest pursuant to chapter .
"Gambling". A person engages in
gambling if [
he] that person stakes or risks something of value
upon the outcome of a contest of chance or a future contingent event not under
[ his] that person's control or influence, upon an agreement or
understanding that [ he] that person or someone else will receive
something of value in the event of a certain outcome. Gambling does not
include bona fide business transactions valid under the law of contracts,
including but not limited to contracts for the purchase or sale at a future
date of securities or commodities, and agreements to compensate for loss caused
by the happening of chance, including but not limited to contracts of indemnity
or guaranty and life, health, or accident insurance[ .]; provided that
gambling shall not include activities authorized for a fantasy contest pursuant
to chapter ."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2016.
Fantasy Contests; Authorization; Regulation
Provides for the authorization and regulation of fantasy contests. Establishes consumer protections for participants. Clarifies that fantasy contests shall not be considered gambling or games of chance.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.