Text: SF457
Text: SF459
Senate File 458
SENATE FILE
BY COMMITTEE ON STATE
GOVERNMENT
(SUCCESSOR TO SSB
1165)
A BILL FOR
1 An Act relating to certain forms of gambling, including horse
2 racing, pari=mutuel wagering, gambling games, and intrastate
3 internet poker, creating regulatory and tax structures, and
4 providing penalties.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 2322SV (1) 84
aw/rj
PAG LIN
1 1 DIVISION I
1 2 HORSE RACING
1 3 Section 1. Section 99D.7, Code 2011, is amended by adding
1 4 the following new subsection:
1 5 NEW SUBSECTION. 2A. To adopt standards regarding the
1 6 duration of thoroughbred and quarter horse racing seasons,
1 7 so that a thoroughbred racing season shall not be less than
1 8 sixty=seven days, and so that a quarter horse racing season
1 9 shall not be less than twenty=six days.
1 10 Sec. 2. Section 99D.7, subsection 4, Code 2011, is amended
1 11 to read as follows:
1 12 4. a. To regulate the purse structure for race meetings
1 13 including establishing a minimum purse.
1 14 b. The commission shall, beginning July 1, 2012, regulate
1 15 the purse structure for all horse racing so that seventy=six
1 16 percent is designated for thoroughbred racing, fifteen and
1 17 one=quarter percent is designated for quarter horse racing, and
1 18 eight and three=quarter percent is designated for standardbred
1 19 racing. The purse moneys designated for standardbred racing
1 20 may only be used to support standardbred harness racing purses
1 21 at county fairs or for the maintenance or repair of harness
1 22 racing tracks at the fairgrounds for such county fairs. The
1 23 horse racetrack in Polk county shall not provide funding to
1 24 support standardbred racing at such county fairs that is not
1 25 otherwise provided for in this paragraph.
1 26 Sec. 3. Section 99D.11, subsection 2, Code 2011, is amended
1 27 to read as follows:
1 28 2. Licensees shall only permit the pari=mutuel or
1 29 certificate method of wagering, or the advanced deposit method
1 30 of wagering, as defined in this section.
1 31 Sec. 4. Section 99D.11, subsection 3, Code 2011, is amended
1 32 to read as follows:
1 33 3. The licensee may receive wagers of money only from a
1 34 person present in a licensed racetrack enclosure on a horse
1 35 or dog in the race selected by the person making the wager
2 1 to finish first in the race or from a person engaging in
2 2 advanced deposit wagering as defined in this section. The
2 3 person wagering shall acquire an interest in the total money
2 4 wagered on all horses or dogs in the race as first winners in
2 5 proportion to the amount of money wagered by the person.
2 6 Sec. 5. Section 99D.11, subsection 6, paragraph a, Code
2 7 2011, is amended to read as follows:
2 8 a. All wagering shall be conducted within the racetrack
2 9 enclosure where the licensed race is held, except as provided
2 10 in paragraph paragraphs "b" and "c".
2 11 Sec. 6. Section 99D.11, subsection 6, Code 2011, is amended
2 12 by adding the following new paragraph:
2 13 NEW PARAGRAPH. c. (1) The commission shall authorize the
2 14 licensee to conduct advanced deposit wagering. An advanced
2 15 deposit wager may be placed in person at a licensed racetrack
2 16 enclosure, or from any other location via a telephone=type
2 17 device or any other electronic means.
2 18 (2) For the purposes of this section, "advanced deposit
2 19 wagering" means a method of pari=mutuel wagering in which an
2 20 individual may establish an account, deposit money into the
2 21 account, and use the account balance to pay for pari=mutuel
2 22 wagering. Of the net revenue received through advanced deposit
2 23 wagering, fifty percent shall be directed to horse purses
2 24 created pursuant to section 99D.7, subsection 4, and fifty
2 25 percent shall be directed to the licensee for the pari=mutuel
2 26 horse racetrack located in Polk county.
2 27 Sec. 7. Section 99D.22, subsection 1, Code 2011, is amended
2 28 to read as follows:
2 29 1. a. A licensee shall hold at least one race on each
2 30 racing day limited to Iowa=foaled horses or Iowa=whelped
2 31 dogs as defined by the department of agriculture and land
2 32 stewardship using standards consistent with this section.
2 33 However, if sufficient competition cannot be had among that
2 34 class of horses or dogs on any day, another race for the day may
2 35 be substituted.
3 1 b. A sum equal to twelve percent of the purse won by
3 2 an Iowa=foaled horse or Iowa=whelped dog shall be used to
3 3 promote the horse and dog breeding industries. The twelve
3 4 percent shall be withheld by the licensee from the breakage
3 5 and shall be paid at the end of the race meeting to the state
3 6 department of agriculture and land stewardship which in turn
3 7 shall deposit it in a special fund to be known as the Iowa horse
3 8 and dog breeders fund. The department shall pay the amount
3 9 deposited in the fund that is withheld from the purse won by
3 10 an Iowa=foaled horse to the breeder of the winning Iowa=foaled
3 11 horse by December 31 of each calendar year. The department
3 12 shall pay the amount deposited in the fund that is withheld
3 13 from the purse won by an Iowa=whelped dog to the breeder of the
3 14 winning Iowa=whelped dog by March 31 of each calendar year.
3 15 For the purposes of this section, the breeder of a horse shall
3 16 be considered to be the owner of the brood mare at the time the
3 17 foal is dropped.
3 18 c. No less than twenty percent of all net purse moneys
3 19 distributed to each breed, as described in section 99D.7,
3 20 subsection 4, paragraph "b", shall be designated for registered
3 21 Iowa=bred foals in the form of breeder's awards or purse
3 22 supplement awards to enhance and foster the growth of the horse
3 23 breeding industry.
3 24 Sec. 8. Section 99F.6, subsection 4, paragraph a, Code 2011,
3 25 is amended to read as follows:
3 26 a. (1) Before a license is granted, the division of
3 27 criminal investigation of the department of public safety
3 28 shall conduct a thorough background investigation of the
3 29 applicant for a license to operate a gambling game operation
3 30 on an excursion gambling boat. The applicant shall provide
3 31 information on a form as required by the division of criminal
3 32 investigation.
3 33 (2) A qualified sponsoring organization licensed to operate
3 34 gambling games under this chapter shall distribute the receipts
3 35 of all gambling games, less reasonable expenses, charges,
4 1 taxes, fees, and deductions allowed under this chapter, as
4 2 winnings to players or participants or shall distribute the
4 3 receipts for educational, civic, public, charitable, patriotic,
4 4 or religious uses as defined in section 99B.7, subsection 3,
4 5 paragraph "b". However, a licensee to conduct gambling games
4 6 under this chapter shall, unless an operating agreement for an
4 7 excursion gambling boat otherwise provides, distribute at least
4 8 three percent of the adjusted gross receipts for each license
4 9 year for educational, civic, public, charitable, patriotic,
4 10 or religious uses as defined in section 99B.7, subsection 3,
4 11 paragraph "b". However, if a licensee who is also licensed to
4 12 conduct pari=mutuel wagering at a horse racetrack has unpaid
4 13 debt from the pari=mutuel racetrack operations, the first
4 14 receipts of the gambling games operated within the racetrack
4 15 enclosure less reasonable operating expenses, taxes, and fees
4 16 allowed under this chapter shall be first used to pay the
4 17 annual indebtedness.
4 18 (3) The commission shall authorize, subject to the debt
4 19 payments for horse racetracks and the provisions of paragraph
4 20 "b" for dog racetracks, a licensee who is also licensed to
4 21 conduct pari=mutuel dog or horse racing to use receipts from
4 22 gambling games within the racetrack enclosure to supplement
4 23 purses for races particularly for Iowa=bred horses pursuant to
4 24 an agreement which shall be negotiated between the licensee and
4 25 representatives of the dog or horse owners. For agreements
4 26 subject to commission approval concerning purses for horse
4 27 racing beginning on or after January 1, 2006, and ending
4 28 before January 1, 2021, the agreements shall provide that
4 29 total annual purses for all horse racing shall be no less than
4 30 eleven percent of the first two hundred million dollars of net
4 31 receipts, and six percent of net receipts above two hundred
4 32 million dollars. In addition, live standardbred horse racing
4 33 shall not be featured at the horse racetrack in Polk county.
4 34 Agreements that are subject to commission approval concerning
4 35 horse purses for a particular period of time beginning on or
5 1 after January 1, 2006, and ending before January 1, 2021, shall
5 2 be jointly submitted to the commission for approval.
5 3 (4) A qualified sponsoring organization shall not make a
5 4 contribution to a candidate, political committee, candidate's
5 5 committee, state statutory political committee, county
5 6 statutory political committee, national political party, or
5 7 fund=raising event as these terms are defined in section
5 8 68A.102. The membership of the board of directors of a
5 9 qualified sponsoring organization shall represent a broad
5 10 interest of the communities.
5 11 (5) For purposes of this paragraph, "net receipts" means the
5 12 annual adjusted gross receipts from all gambling games less the
5 13 annual amount of money pledged by the owner of the facility to
5 14 fund a project approved to receive vision Iowa funds as of July
5 15 1, 2004.
5 16 DIVISION II
5 17 COUNTY REFERENDUMS AND
5 18 GAMBLING GAME LICENSING
5 19 Sec. 9. Section 99F.4A, subsection 8, paragraph a, Code
5 20 2011, is amended to read as follows:
5 21 a. The commission shall, upon the immediate payment
5 22 of the applicable table games license fee and submission
5 23 to the commission by June 1, 2005, of an application by a
5 24 licensee of a pari=mutuel dog or horse racetrack licensed to
5 25 conduct gambling games at a pari=mutuel racetrack enclosure,
5 26 issue a license to the licensee to conduct table games of
5 27 chance, including video machines that simulate table games
5 28 of chance, at the pari=mutuel racetrack enclosure subject to
5 29 the requirements of this subsection. However, a table games
5 30 license may only be issued to a licensee required to pay a
5 31 table games license fee of three million dollars under this
5 32 subsection if the licensee, and all other licensees of an
5 33 excursion gambling boat in that county, file an agreement
5 34 with the commission authorizing the granting of a table games
5 35 license under this subsection and permitting all licensees
6 1 of an excursion gambling boat to operate a moored barge as
6 2 of a specific date. The licensee shall be granted a table
6 3 games license by the commission without conducting a separate
6 4 referendum authorizing table games upon payment of the
6 5 applicable license fee to the commission which table games
6 6 license fee may be offset by the licensee against taxes imposed
6 7 on the licensee by section 99F.11, to the extent of twenty
6 8 percent of the table games license fee paid pursuant to this
6 9 subsection for each of five consecutive fiscal years beginning
6 10 with the fiscal year beginning July 1, 2008. Fees paid
6 11 pursuant to this subsection are not refundable to the licensee.
6 12 A licensee shall not be required to pay a fee to renew a table
6 13 games license issued pursuant to this subsection. Moneys
6 14 collected by the commission from a table games license fee paid
6 15 under this subsection shall be deposited in the rebuild Iowa
6 16 infrastructure fund created in section 8.57.
6 17 Sec. 10. Section 99F.7, subsection 11, Code 2011, is amended
6 18 by striking the subsection.
6 19 Sec. 11. Section 99F.7, subsection 15, Code 2011, is amended
6 20 to read as follows:
6 21 15. If a licensed excursion boat stops at more than one
6 22 harbor and travels past a county without stopping at any port
6 23 in that county, the commission shall require the excursion boat
6 24 operator to develop a schedule for ports of call in which a
6 25 county referendum has been approved, and the port of call has
6 26 that have the necessary facilities to handle the boat. The
6 27 commission may limit the schedule to only one port of call per
6 28 county.
6 29 DIVISION III
6 30 INTERNET POKER
6 31 Sec. 12. NEW SECTION. 99H.1 Internet poker ==== purpose.
6 32 1. This chapter may be cited as the "Iowa Internet Poker
6 33 Consumer Protection and Revenue Generation Act of 2011".
6 34 2. It is the purpose of this chapter to create a framework
6 35 for the state to regulate intrastate internet poker in order to
7 1 ensure consumer protections and provide to the state additional
7 2 revenue that otherwise escapes Iowa taxation, by authorizing,
7 3 creating, and implementing a licensing and regulatory structure
7 4 and system of intrastate internet poker to do all of the
7 5 following:
7 6 a. Provide that intrastate internet poker is only offered
7 7 for play in a manner that is lawful under the federal Unlawful
7 8 Internet Gambling Enforcement Act of the federal Security and
7 9 Accountability for Every Port Act of 2006, Pub. L. No. 109=347,
7 10 which authorizes a state to regulate and conduct intrastate
7 11 internet gambling, such as poker.
7 12 b. Provide a new source of revenue that will generate
7 13 economic benefits to the state through the authorization of
7 14 lawful and regulated intrastate internet poker in Iowa instead
7 15 of allowing economic benefits to flow to unregulated foreign
7 16 operators and markets.
7 17 c. Create a contractual relationship between licensed
7 18 affiliates and an internet poker hub operator with the
7 19 technical expertise to ensure that wagering authorized by this
7 20 chapter is only offered to registered players who are at least
7 21 twenty=one years of age and physically present within the
7 22 borders of this state at the time of play.
7 23 d. Ensure that the internet poker hub operator is qualified
7 24 to be licensed by the state and to meet all statutory,
7 25 regulatory, and contractual requirements of the state while
7 26 protecting registered poker players.
7 27 e. Allow a licensee authorized to conduct gambling games
7 28 on or in an excursion gambling boat, gambling structure, or
7 29 racetrack enclosure to become an affiliate of the internet
7 30 poker hub operator.
7 31 f. Ensure that the state is able to collect all taxes and
7 32 fees from the play of intrastate internet poker.
7 33 g. Create a system to protect each registered player's
7 34 private information and prevent fraud and identity theft and
7 35 ensure that the registered player's financial transactions are
8 1 processed in a secure and transparent fashion.
8 2 h. Ensure that the regulatory agency has unlimited access
8 3 to the premises and records of the internet poker hub operator
8 4 and affiliates to ensure strict compliance with its regulations
8 5 concerning credit authorization, account access, and other
8 6 security provisions.
8 7 i. Require the internet poker hub operator to provide
8 8 accessible customer service to registered players.
8 9 j. Require the internet poker hub operator's internet site
8 10 to contain information relating to problem gambling, including
8 11 a telephone number that an individual may call to seek
8 12 information and assistance for a potential gambling addiction.
8 13 Sec. 13. NEW SECTION. 99H.2 Definitions.
8 14 As used in this chapter, unless otherwise required by the
8 15 context:
8 16 1. "Adjusted gross receipts" means the total amount of
8 17 money received by the internet poker affiliates from registered
8 18 players for participation in authorized games less winnings
8 19 paid to registered players.
8 20 2. "Affiliate" means an operator licensed under chapter 99D
8 21 or 99F that maintains an internet site as a portal into the
8 22 state internet poker network.
8 23 3. "Authorized game" means a game or series of games of
8 24 poker which are played as a nonbanking game on the state
8 25 internet poker network.
8 26 4. "Commission" means the Iowa racing and gaming commission.
8 27 5. "Convicted" means having been found guilty, regardless of
8 28 adjudication, as a result of a jury verdict, nonjury trial, or
8 29 entry of a plea of guilty or nolo contendere.
8 30 6. "Internet poker hub operator" or "poker hub operator"
8 31 means a computer system operator that is licensed by the state
8 32 and contracts with the state to operate the state internet
8 33 poker network.
8 34 7. "Intrastate internet poker" means authorized games of
8 35 poker played over the internet by registered players who are
9 1 physically present within the borders of this state at the time
9 2 of play.
9 3 8. "Nonbanking game" means an authorized game in which an
9 4 internet poker hub operator or affiliate is not a participant
9 5 and has no financial stake in the outcome of the authorized
9 6 game.
9 7 9. "Player incentives" means any bonuses, rewards, prizes,
9 8 or other types of promotional items provided to a registered
9 9 player by an internet poker hub operator or affiliate as an
9 10 incentive to begin or continue playing on the state internet
9 11 poker network.
9 12 10. "Rake" means a set fee or percentage of the pot
9 13 assessed by an internet poker hub operator for providing the
9 14 internet poker services to registered players for the right to
9 15 participate in an authorized game conducted by the internet
9 16 poker hub operator or affiliates.
9 17 11. "Registered player" means a person who is registered
9 18 with an affiliate to participate in an authorized game
9 19 conducted on the state internet poker network.
9 20 12. "State internet poker network" means the computer system
9 21 operated by the internet poker hub operator and affiliates that
9 22 authorizes the playing of and wagering on intrastate internet
9 23 poker by registered players through the internet site portals
9 24 of affiliates.
9 25 13. "Tournament fee" means a set fee assessed to registered
9 26 players by the internet poker hub operator for providing the
9 27 internet poker tournament services.
9 28 Sec. 14. NEW SECTION. 99H.3 Intrastate internet poker
9 29 authorized.
9 30 1. Under the federal Unlawful Internet Gambling Enforcement
9 31 Act of the federal Security and Accountability for Every Port
9 32 Act of 2006, Pub. L. No. 109=347, a state is authorized to
9 33 regulate and conduct intrastate internet poker as long as all
9 34 players and the internet wagering activities are located within
9 35 the state.
10 1 2. Notwithstanding any other provision of law, a person may
10 2 operate a state internet poker network as an internet poker hub
10 3 operator and a person may participate as a registered player in
10 4 an authorized game or tournament provided on the state internet
10 5 poker network by an affiliate if such game or tournament and
10 6 poker operations are conducted strictly in accordance with the
10 7 provisions of this chapter and federal law.
10 8 Sec. 15. NEW SECTION. 99H.4 Authority of the commission.
10 9 The commission shall regulate the operation of the state
10 10 internet poker network, the internet poker hub operator, the
10 11 affiliates, and the play of intrastate internet poker under
10 12 this chapter and rules adopted pursuant to this chapter. The
10 13 commission may do all of the following:
10 14 1. Adopt rules related to intrastate internet poker,
10 15 including but not limited to rules governing all of the
10 16 following:
10 17 a. The issuance of operator and individual occupational
10 18 licenses to an internet poker hub operator, affiliates, and
10 19 their employees.
10 20 b. The operation of the state internet poker network and
10 21 technical system requirements.
10 22 c. Security of the financial information of registered
10 23 players and registered player accounts.
10 24 d. Bonuses, awards, promotions, and other incentives to
10 25 registered players.
10 26 e. Recordkeeping and reporting requirements.
10 27 f. The distribution of intrastate internet poker income.
10 28 g. The imposition and collection of all fees and taxes
10 29 imposed by this chapter.
10 30 2. Conduct investigations and monitor operation of the
10 31 state internet poker network and the playing of authorized
10 32 games on the state internet poker network.
10 33 3. Review the books, accounts, and records of any current or
10 34 former internet poker hub operator or affiliate.
10 35 4. Suspend or revoke any license or permit, after hearing,
11 1 for any violation of this chapter or the rules adopted pursuant
11 2 to this chapter.
11 3 5. Take testimony, issue summons and subpoenas for any
11 4 witness, and issue subpoenas duces tecum in connection with any
11 5 matter within its jurisdiction.
11 6 6. Monitor and ensure proper collection of taxes and fees
11 7 imposed by this chapter.
11 8 7. Require the internet poker hub operator to adopt internal
11 9 controls to ensure no compromise of revenue to the state.
11 10 8. Monitor, audit, and verify the cash flow and accounting
11 11 of state internet poker network revenue for any given operating
11 12 day.
11 13 9. Monitor and ensure that the playing of intrastate
11 14 internet poker is conducted fairly and that all personal
11 15 and financial information provided by registered players is
11 16 protected by the internet poker hub operator.
11 17 Sec. 16. NEW SECTION. 99H.5 Internet poker hub operator ====
11 18 license required.
11 19 1. A person shall not operate as the internet poker hub
11 20 operator in this state unless the person holds a valid internet
11 21 poker hub operator license issued under this section.
11 22 2. Only a person holding a valid intrastate internet
11 23 poker license issued by the commission may provide intrastate
11 24 internet poker for play to registered players.
11 25 3. An internet poker hub operator must be an entity
11 26 authorized to conduct business in this state.
11 27 4. A person seeking a license or renewal of a license
11 28 to operate as the internet poker hub operator shall
11 29 make application on forms prescribed by the commission.
11 30 Applications for an internet poker hub operator license
11 31 shall contain all of the information the commission, by
11 32 rule, determines is required to ensure eligibility under this
11 33 section.
11 34 5. As a condition of licensure and to maintain continued
11 35 authority to conduct intrastate internet poker, an internet
12 1 poker hub operator licensee must provide the documentation
12 2 required under this section on a timely basis to the commission
12 3 and the documentation must be appropriate, current, and
12 4 accurate.
12 5 Sec. 17. NEW SECTION. 99H.6 Selection of an internet poker
12 6 hub operator ==== negotiated agreement.
12 7 The commission shall, subject to agreement by a majority of
12 8 licensed affiliates, select an internet poker hub operator that
12 9 meets the licensure and technical requirements and expertise
12 10 to provide services for lawful intrastate internet poker and
12 11 authorized games in Iowa. The applicant must demonstrate
12 12 the ability to ensure that intrastate internet poker is only
12 13 offered to registered players who are at least twenty=one years
12 14 of age and who are physically present within the borders of
12 15 this state at the time of play.
12 16 Sec. 18. NEW SECTION. 99H.7 Internet poker hub operator
12 17 ==== qualifications.
12 18 For the purposes of this chapter, the commission shall
12 19 consider all of the following as minimum qualifications to
12 20 determine whether an internet poker hub operator applicant
12 21 together with an applicant's proposed subcontractor is legally,
12 22 technically, and financially qualified to become the state's
12 23 internet poker hub operator:
12 24 1. The applicant, and any subcontractor, is an entity
12 25 authorized to conduct business in this state.
12 26 2. The applicant, and any subcontractor, has not in the
12 27 past accepted any wagers of moneys or other consideration on
12 28 any internet gambling activity, including poker, from any Iowa
12 29 resident. However, this subsection does not disqualify an
12 30 applicant or subcontractor who accepts internet pari=mutuel
12 31 wagers from any Iowa resident through a legal internet
12 32 pari=mutuel wagering entity authorized in another state.
12 33 3. The applicant's, and any subcontractor's, executives
12 34 and key employees meet the requirements to obtain intrastate
12 35 internet poker occupational licenses from the commission, as
13 1 set forth in section 99H.11.
13 2 4. The applicant, any subcontractors, and all entities with
13 3 an ownership interest in the applicant or any subcontractors
13 4 have demonstrated compliance with all federal and state laws in
13 5 the jurisdictions in which they provide services.
13 6 5. The applicant has provided all necessary documentation
13 7 and information relating to all proposed subcontractors of the
13 8 applicant.
13 9 6. The applicant has provided a description of the manner in
13 10 which the applicant will facilitate compliance with all of the
13 11 standards set forth in this chapter, including but not limited
13 12 to all of the following:
13 13 a. Registered player processes and requirements relating
13 14 to intrastate play, age verification, and exclusion of problem
13 15 gamblers.
13 16 b. Network system requirements, including but not limited
13 17 to connectivity, hardware, software, anti=fraud systems, virus
13 18 prevention, data protection, access controls, firewalls,
13 19 disaster recovery, and redundancy.
13 20 c. Gaming systems, including but not limited to hardware
13 21 and software that ensures that games are legal, games are
13 22 independent and fair, game and betting rules are available to
13 23 all registered players, and all data used for the conduct of
13 24 each game is randomly generated and unpredictable.
13 25 d. Ongoing auditing by the commission and accounting
13 26 systems, including but not limited to those for registered
13 27 player accounts, participation fees, distribution of funds to
13 28 registered players, and distribution of revenue to the state.
13 29 7. The applicant has provided all other documentation or
13 30 information that the commission, by rule, has determined is
13 31 required to ensure that the applicant is legally, technically,
13 32 and financially qualified to enter into a contract to become
13 33 the state's internet poker hub operator.
13 34 Sec. 19. NEW SECTION. 99H.8 Annual bond required.
13 35 The holder of a license to be the internet poker hub operator
14 1 in this state shall be financially and otherwise responsible
14 2 for the operation of the state internet poker network and
14 3 for the conduct of any employee involved in the operation of
14 4 the state internet poker network. Before the issuance of an
14 5 internet poker hub operator license, a qualified applicant for
14 6 such a license must provide evidence of a surety bond in the
14 7 amount of one million dollars, payable to the state, for each
14 8 year that the licensee is licensed to be the internet poker hub
14 9 operator in this state. The bond shall be issued by a surety or
14 10 sureties authorized to do business in this state and approved
14 11 by the commission. The bond shall guarantee that the internet
14 12 poker hub operator fulfills all financial requirements of the
14 13 contract. Such bond shall be kept in full force and effect by
14 14 an internet poker hub operator during the term of the license.
14 15 Sec. 20. NEW SECTION. 99H.9 Internet poker hub operator
14 16 ==== obligations.
14 17 An internet poker hub operator shall comply with the terms of
14 18 its contract with the state and with all of the following:
14 19 1. The accepted proposal agreed to by the affiliates
14 20 and an internet poker hub operator applicant shall govern
14 21 the interpretation of the contract creating a contractual
14 22 relationship entered into between the affiliates and the
14 23 internet poker hub operator.
14 24 2. The contract between the affiliates and the internet
14 25 poker hub operator is for a five=year period and may be renewed
14 26 for a period equal to the original contract, if agreed to by
14 27 both parties.
14 28 3. The contract between the affiliates and the internet
14 29 poker hub operator may be amended by mutual written agreement
14 30 of the affiliates and the internet poker hub operator.
14 31 4. If this chapter is amended, the internet poker hub
14 32 operator may declare the contract null and void within sixty
14 33 days after the effective date of the amendment and must provide
14 34 at least ninety days' prior written notice to the affiliates of
14 35 such intent; otherwise, the internet poker hub operator agrees
15 1 to be bound by the amendments to this chapter enacted after the
15 2 terms of the contract are established.
15 3 5. In the event of commercial infeasibility due to a change
15 4 in federal law rendering the provision of intrastate internet
15 5 poker services illegal, the internet poker hub operator may
15 6 abandon the contract after providing the affiliates with at
15 7 least ninety days' prior written notice of its intent to end
15 8 the contract and a statement explaining its interpretation
15 9 that continuing to provide services under the contract is
15 10 commercially infeasible.
15 11 6. If a dispute arises between the parties to the contract,
15 12 the affiliates or the internet poker hub operator may pursue an
15 13 administrative law or district court remedy interpreting the
15 14 contract and the rights and responsibilities in the contract.
15 15 Sec. 21. NEW SECTION. 99H.10 Excursion gambling boat,
15 16 gambling structure, or racetrack enclosure affiliate license
15 17 required ==== application ==== fees.
15 18 An affiliate license may only be issued to an excursion
15 19 gambling boat or gambling structure operator licensed under
15 20 section 99F.5, or to a racetrack enclosure operator licensed
15 21 under section 99F.4A, who actively operates an excursion
15 22 gambling boat, gambling structure, or racetrack enclosure with
15 23 a minimum of ten tables, complies with all the requirements of
15 24 chapter 99F and the rules adopted pursuant to that chapter, and
15 25 complies with the following requirements:
15 26 1. The affiliate may only provide intrastate internet poker
15 27 for play to registered players through the state internet poker
15 28 network.
15 29 2. After the initial affiliate license is granted, the
15 30 affiliate's application for the renewal of that license shall
15 31 be made in conjunction with the affiliate's renewal application
15 32 for its license issued under section 99F.4A or 99F.5.
15 33 3. A person seeking a license or renewal of a license to
15 34 operate as an affiliate shall make the application on forms
15 35 prescribed by the commission. An application for an affiliate
16 1 license shall contain all of the information the commission, by
16 2 rule, determines is required to ensure eligibility.
16 3 4. As a condition of licensure and to maintain continued
16 4 authority for the conduct of intrastate internet poker, the
16 5 affiliate licensee must provide the documentation required
16 6 under this section on a timely basis to the commission and the
16 7 documentation must be appropriate, current, and accurate.
16 8 5. An affiliate licensee shall not sell or lease all or any
16 9 portion of its excursion gambling boat, gambling structure, or
16 10 racetrack enclosure licensed under chapter 99F to any person or
16 11 entity, or contract with any person or entity to operate its
16 12 internet site, conduct marketing or promotional activities, or
16 13 conduct any other aspects of business associated with the play
16 14 of poker under chapter 99F or the play of intrastate internet
16 15 poker under this chapter, that does not meet and comply with
16 16 all requirements and provisions of this chapter and chapter
16 17 99F.
16 18 6. The annual affiliate license fee shall be two hundred
16 19 fifty thousand dollars, payable to the commission.
16 20 7. The commission shall adopt rules regarding affiliate
16 21 licenses and renewals.
16 22 Sec. 22. NEW SECTION. 99H.11 Business and employee
16 23 occupational license required ==== applications ==== fees.
16 24 1. A person employed by or otherwise working for the
16 25 internet poker hub operator or an affiliate in any capacity
16 26 related to and while conducting intrastate internet poker
16 27 operations must hold a valid employee occupational license
16 28 issued by the commission.
16 29 2. The internet poker hub operator or an affiliate shall
16 30 not employ or allow to be employed any person in any capacity
16 31 related to the operation of intrastate internet poker unless
16 32 the person holds a valid employee occupational license.
16 33 3. The internet poker hub operator or affiliate shall
16 34 not contract with, or otherwise do business with, a business
16 35 required to hold a valid intrastate internet poker business
17 1 occupational license, unless the business holds such a valid
17 2 license.
17 3 4. A proprietorship, partnership, corporation,
17 4 subcontractor, or other entity must obtain a valid intrastate
17 5 internet poker business occupational license issued by the
17 6 commission to partner with, contract with, be associated
17 7 with, or participate in the conduct of intrastate internet
17 8 poker operations with the internet poker hub operator or an
17 9 affiliate.
17 10 5. The commission shall establish, by rule, a schedule for
17 11 the annual renewal of internet poker hub operator and affiliate
17 12 occupational licenses. Intrastate internet poker occupational
17 13 licenses are not transferable.
17 14 6. A person seeking an intrastate internet poker
17 15 occupational license, or renewal of such a license, shall
17 16 make the application on forms prescribed by the commission
17 17 and include payment of the appropriate application fee. An
17 18 application for an intrastate internet poker occupational
17 19 license shall contain all of the information the commission, by
17 20 rule, determines is required to ensure eligibility under this
17 21 section.
17 22 7. The commission shall adopt rules regarding intrastate
17 23 internet poker occupational licenses and renewals.
17 24 8. Pursuant to rules adopted by the commission, any person
17 25 may apply for and, if qualified, be issued an intrastate
17 26 internet poker occupational license valid for a period of three
17 27 years upon payment of the full occupational license fee for
17 28 each of the three years for which the license is issued. The
17 29 intrastate internet poker occupational license is valid during
17 30 its specified term at the internet poker hub operator or an
17 31 affiliate where intrastate internet poker is authorized to be
17 32 conducted.
17 33 9. The intrastate internet poker occupational license fee
17 34 for initial application and annual renewal shall be determined
17 35 by rule of the commission but shall not exceed fifty dollars
18 1 for an occupational license for an employee of the internet
18 2 poker hub operator or an affiliate licensee or one thousand
18 3 dollars for a business occupational license for nonemployees
18 4 of the licensee providing goods or services to an internet
18 5 poker hub operator or an affiliate licensee. Failure to pay
18 6 the required fee constitutes grounds for disciplinary action
18 7 by the commission against the internet poker hub operator or
18 8 an affiliate licensee.
18 9 10. A person holding a valid individual occupational
18 10 license issued by the commission under section 99F.6 is not
18 11 required to obtain an individual employee occupational license
18 12 under this section.
18 13 Sec. 23. NEW SECTION. 99H.12 Business and employee
18 14 occupational license denial, revocation, suspension, limitation,
18 15 or nonrenewal.
18 16 The commission may do all of the following:
18 17 1. Deny an application for, or revoke, suspend, or place
18 18 conditions or restrictions on, a license of an employee or
18 19 business that has been refused a license by any other state
18 20 gaming commission, governmental department, agency, or other
18 21 authority exercising regulatory jurisdiction over gaming in
18 22 another state or jurisdiction.
18 23 2. Deny an application for, or suspend or place conditions
18 24 or restrictions on, a license of any employee or business that
18 25 is under suspension or has unpaid fines in another state or
18 26 jurisdiction.
18 27 3. Deny, suspend, revoke, or refuse to renew any internet
18 28 poker hub operator or affiliate occupational license if the
18 29 applicant for the license or the licensee has violated this
18 30 chapter or the rules of the commission governing the conduct of
18 31 persons connected with the play of intrastate internet poker.
18 32 4. Deny, suspend, revoke, or refuse to renew any internet
18 33 poker hub operator or affiliate occupational license if the
18 34 applicant for the license or the licensee has been convicted
18 35 in this state, in any other state, or under the laws of the
19 1 United States of a capital felony, a felony, or an offense in
19 2 any other state that would be a felony under the laws of this
19 3 state involving arson; trafficking in, conspiracy to traffic
19 4 in, smuggling, importing, conspiracy to smuggle or import, or
19 5 delivery, sale, or distribution of a controlled substance;
19 6 racketeering; or a crime involving a lack of good moral
19 7 character; or the applicant has had a gaming license revoked
19 8 by this state or any other jurisdiction for any gaming=related
19 9 offense.
19 10 5. Deny, revoke, or refuse to renew any internet poker hub
19 11 operator or affiliate occupational license if the applicant
19 12 for the license or the licensee has been convicted of a felony
19 13 or misdemeanor in this state, in any other state, or under the
19 14 laws of the United States if such felony or misdemeanor is
19 15 related to gambling or bookmaking as described in chapter 725.
19 16 Sec. 24. NEW SECTION. 99H.13 Registered players ====
19 17 eligibility.
19 18 1. All registered players must be located within this state
19 19 at the time of play of intrastate internet poker.
19 20 2. A person who has not attained twenty=one years of age
19 21 shall not be a registered player or play intrastate internet
19 22 poker.
19 23 3. The internet poker hub operator and affiliates shall
19 24 exclude from play any person who has submitted a completed
19 25 internet poker self=exclusion form.
19 26 a. The internet poker hub operator and affiliates shall have
19 27 an internet poker self=exclusion form available and accessible
19 28 on the internet site page that is displayed when either of the
19 29 following occur:
19 30 (1) A person opens the internet site page to register as a
19 31 registered player.
19 32 (2) A registered player accesses the first internet site
19 33 page prior to playing.
19 34 b. Upon receipt of a completed internet poker self=exclusion
19 35 form, the affiliate shall immediately provide a copy of
20 1 the completed form to the internet poker hub operator, each
20 2 affiliate, and the commission. The commission shall ensure
20 3 that all other affiliates exclude the person from the play of
20 4 intrastate internet poker.
20 5 c. The internet poker hub operator and affiliate shall
20 6 retain the original form to identify persons who request to be
20 7 excluded from play.
20 8 d. The internet poker hub operator and affiliate shall
20 9 prominently display a link to the internet site of a
20 10 responsible gaming organization as identified by the commission
20 11 for services related to the prevention of compulsive and
20 12 addictive gambling.
20 13 e. A person shall not bring any action against the internet
20 14 poker hub operator or an affiliate for negligence or any
20 15 other claim if a person who has filled out an internet poker
20 16 self=exclusion form gains access and plays intrastate internet
20 17 poker despite the request to be excluded.
20 18 Sec. 25. NEW SECTION. 99H.14 Intrastate internet poker ====
20 19 authorized games.
20 20 1. In order to offer a specific game of poker for play, the
20 21 internet poker hub operator shall provide the commission with
20 22 all of the following:
20 23 a. A description of any game of poker and the betting rules
20 24 it proposes to offer to registered players.
20 25 b. Documentation relating to development and testing of the
20 26 game's software.
20 27 2. Upon submission of the information required in
20 28 subsection 1, the internet poker hub operator may begin
20 29 offering the game. If the commission does not object to the
20 30 proposed game of poker within thirty days after receipt of
20 31 the submission, the game shall be considered authorized and
20 32 the internet poker hub operator submitting the proposal may
20 33 continue to offer the game to registered players.
20 34 3. Games and betting events shall be operated strictly in
20 35 accordance with the specified game and betting rules.
21 1 4. The internet poker hub operator shall ensure that the
21 2 authorized games of poker are fair. For each proposed or
21 3 authorized game offered for play, the gaming system shall
21 4 display all of the following information:
21 5 a. The name of the game.
21 6 b. Any restrictions on play.
21 7 c. The rules of the game.
21 8 d. All instructions on how to play.
21 9 e. The unit and total bets permitted.
21 10 f. The registered player's current account balance, which
21 11 shall be updated in real time.
21 12 g. Any other information that the internet poker hub
21 13 operator determines is necessary for the registered player
21 14 to have in real time to compete fairly in the proposed or
21 15 authorized game.
21 16 5. All proposed and authorized game results shall be
21 17 conducted in such a fashion so that data used to create results
21 18 shall be unpredictable such that it is infeasible to predict
21 19 the next occurrence in a game, given complete knowledge of
21 20 the algorithm and hardware generating the sequence, and all
21 21 previously generated numbers.
21 22 6. The internet poker hub operator shall deploy controls and
21 23 technology to ensure the ability to minimize fraud or cheating
21 24 through collusion, such as external exchange of information
21 25 between different players, or any other means.
21 26 a. If the internet poker hub operator becomes aware that
21 27 fraud or cheating is taking place or has taken place, the
21 28 internet poker hub operator shall immediately take steps to
21 29 stop such activities and inform the commission of all relevant
21 30 facts.
21 31 b. The internet poker hub operator shall immediately inform
21 32 the commission of any complaints and investigate whether the
21 33 complaints are true and shall expeditiously act to prevent
21 34 further fraud or collusion from taking place on the state
21 35 internet poker network. The internet poker hub operator shall
22 1 report the results of the investigation in writing to the
22 2 commission within twenty=four hours after the complaint and
22 3 shall continue to report every twenty=four hours until its
22 4 investigation is concluded. This paragraph does not prevent
22 5 the commission from conducting an independent investigation
22 6 or initiating an administrative action to protect registered
22 7 players from fraud and collusion on the state internet poker
22 8 network and does not prohibit a registered player, the internet
22 9 poker hub operator, an affiliate, or the commission from
22 10 reporting suspected criminal activities to law enforcement
22 11 officials.
22 12 c. A registered player shall not bring an action for damages
22 13 against the internet poker hub operator for attempting to
22 14 prevent fraud or cheating if the internet poker hub operator
22 15 can demonstrate that the internet poker hub operator acted to
22 16 prevent such actions as soon as it became aware of them.
22 17 7. If the gaming server or software does not allow a game to
22 18 be completed, the hand shall be voided and all funds relating
22 19 to the incomplete hand shall be returned to the registered
22 20 player's account.
22 21 Sec. 26. NEW SECTION. 99H.15 Registered players accounts.
22 22 1. The internet poker hub operator shall register players
22 23 and establish registered player accounts prior to play and
22 24 shall ensure that personally identifiable information is
22 25 accessible to an individual registered player and to regulators
22 26 but is otherwise secure.
22 27 2. A person shall not participate in any game on the state
22 28 internet poker network unless the person is registered as a
22 29 player and holds an account.
22 30 3. Accounts may be established in person or by mail,
22 31 telephone, or any electronic means.
22 32 4. To register and establish an account, a person must
22 33 provide all of the following registration information:
22 34 a. First name and surname.
22 35 b. Principal residence address.
23 1 c. Telephone number.
23 2 d. Social security number.
23 3 e. Legal identification or certification to prove that the
23 4 person is at least twenty=one years of age.
23 5 f. Valid electronic mail address.
23 6 g. The source of funds to be used to establish the account
23 7 after the registration process is complete.
23 8 5. An individual shall not register for more than three
23 9 registered player accounts per calendar year. A registered
23 10 player shall not have more than three registered player
23 11 accounts at any time.
23 12 6. Prior to completing the registration process, the
23 13 internet poker hub operator shall explain to the person in a
23 14 conspicuous fashion the privacy policies of the state internet
23 15 poker network, and the person must assent to all of the
23 16 following policies:
23 17 a. Personal identifying information shall not be shared
23 18 with any nongovernment third parties except for licensed
23 19 subcontractors of an internet poker hub operator for the sole
23 20 purpose of permitting registered players to participate in
23 21 games on the state internet poker network or upon receipt of
23 22 a court order to subpoena such information from the internet
23 23 poker hub operator.
23 24 b. All personally identifiable information about registered
23 25 players shall be shared with the commission, and any other
23 26 governmental agency that receives a court order to subpoena
23 27 such information.
23 28 7. The internet poker hub operator shall also require that
23 29 a person agree to the terms of a use agreement applying to
23 30 registered players.
23 31 8. The internet poker hub operator shall provide a
23 32 registered player with the means to update the information
23 33 provided in subsection 4.
23 34 9. The internet poker hub operator may revoke the accounts
23 35 of a registered player for any of the following reasons:
24 1 a. The registered player provided false information in the
24 2 registration process.
24 3 b. The registered player has not updated registration
24 4 information to keep it current.
24 5 c. The registered player has violated the internet poker hub
24 6 operator's terms of use agreement.
24 7 10. The internet poker hub operator may suspend or revoke
24 8 the account of a registered player if the internet poker hub
24 9 operator suspects the registered player has participated in
24 10 illegal activity on the state internet poker network.
24 11 11. The internet poker hub operator shall establish and
24 12 maintain an account for each registered player. The internet
24 13 poker hub operator shall do all of the following:
24 14 a. Provide a means for a registered player to put funds into
24 15 an account; however, a registered player shall not increase the
24 16 amount in an account after a game has started and before the
24 17 game has been completed.
24 18 b. Maintain records on the balance of each registered
24 19 player's account.
24 20 c. Prohibit a registered player from placing a wager unless
24 21 the registered player's account has sufficient funds to cover
24 22 the amount of the wager.
24 23 d. Not provide credit to a registered player's account
24 24 or act as an agent for a credit provider to facilitate the
24 25 provision of funds.
24 26 e. Provide a means for a registered player to transfer money
24 27 out of the registered player's account.
24 28 12. The internet poker hub operator shall put in place
24 29 other systems that provide registered players with the ability
24 30 to control aspects of their play. Upon registration and at
24 31 each time when a registered player logs onto the state internet
24 32 poker network, the internet poker hub operator shall permit
24 33 the registered player to adjust the registered player's play
24 34 settings to do any of the following:
24 35 a. Set a limit on the deposits that can be made per day.
25 1 b. Set a limit on the amount that can be wagered within a
25 2 specified period of time.
25 3 c. Set a limit on the losses that may incur within a
25 4 specified period of time.
25 5 d. Set a limit on the amount of time that can be played
25 6 after logging on to the state internet poker network.
25 7 e. Prevent the state internet poker network from allowing
25 8 the registered player to play for a definite or indefinite
25 9 period of time.
25 10 13. During play, in order to assist a registered player to
25 11 decide whether to suspend play, the registered player's screen
25 12 shall do all of the following:
25 13 a. Indicate how long the registered player has been playing.
25 14 b. Indicate the registered player's winnings or losses since
25 15 the time of last logging in.
25 16 c. Give an option to the registered player to end the
25 17 session or return to the game.
25 18 d. Require the registered player to confirm that the
25 19 registered player has read the message.
25 20 Sec. 27. NEW SECTION. 99H.16 Registered players accounts
25 21 ==== records and reports.
25 22 1. The internet poker hub operator shall establish a book
25 23 of accounts, regularly audit, and make all financial records
25 24 available to the commission. The internet poker hub operator
25 25 shall demonstrate that it has a system of maintaining records
25 26 and reports that is readily available to the commission. The
25 27 records and reports shall include all of the following:
25 28 a. Monthly auditable and aggregate financial statements of
25 29 gaming transactions.
25 30 b. Calculation of all fees payable to government.
25 31 c. The identity of registered players.
25 32 d. The balance on a registered player's account at the start
25 33 of a session of play.
25 34 e. The wagers placed on each game time stamped by the games
25 35 server.
26 1 f. The result of each game time stamped by the games server.
26 2 g. The amount won or lost by a registered player.
26 3 h. The balance on a registered player's account at the end
26 4 of the game.
26 5 2. The internet poker hub operator shall reconcile all
26 6 data log files regarding the registered players' accounts on a
26 7 monthly basis.
26 8 Sec. 28. NEW SECTION. 99H.17 Internet poker hub operator ====
26 9 technical systems.
26 10 1. An internet poker hub operator shall put in place
26 11 technical systems that materially aid the commission
26 12 in fulfilling its regulatory, consumer protection, and
26 13 revenue=raising functions and allow the commission unrestricted
26 14 access to and the right to inspect the technical systems.
26 15 2. The internet poker hub operator shall ensure that the
26 16 state internet poker network is protected from manipulation or
26 17 tampering to affect the random probabilities of winning plays.
26 18 3. The internet poker hub operator shall define and document
26 19 its methodology for all of the following:
26 20 a. The development, implementation, and maintenance of
26 21 gaming software in a manner representative of industry best
26 22 practice standards.
26 23 b. Server connectivity requirements that include all of the
26 24 following:
26 25 (1) Minimum game server connectivity requirements that
26 26 ensure players are protected from losses due to connectivity
26 27 problems.
26 28 (2) The system's ability to recover all transactions
26 29 involving player funds in the event of a failure or
26 30 malfunction.
26 31 (3) Aborted game procedures.
26 32 c. Ability of the system to recover all information required
26 33 for viewing a game interrupted due to loss of connectivity.
26 34 d. Consumer protection requirements.
26 35 e. Responsible advertising, marketing, and promotion
27 1 that ensure that registered players are not misled through
27 2 advertising or promotional activities, and ensure that the
27 3 terms and conditions of promotions are followed.
27 4 f. Anti=money=laundering controls.
27 5 g. Preventive and detective controls addressing money
27 6 laundering and fraud risks which shall be documented and
27 7 implemented.
27 8 4. The internet poker hub operator shall retain all such
27 9 documentation for at least twelve months.
27 10 Sec. 29. NEW SECTION. 99H.18 Participation fee.
27 11 The internet poker hub operator shall charge a fee or
27 12 a tournament fee to registered players for the right to
27 13 participate in authorized games or tournaments conducted on the
27 14 state internet poker network. The participation fee may be a
27 15 per=hand charge, a flat fee, an hourly rate, or a rake subject
27 16 to the posted maximum amount but shall not be based on the
27 17 amount won by registered players. The fee shall be designated
27 18 and conspicuously posted on the registered player's screen
27 19 prior to the start of each proposed or authorized game.
27 20 Sec. 30. NEW SECTION. 99H.19 Prohibited relationships.
27 21 1. A proprietorship, partnership, corporation,
27 22 subcontractor, or other entity must obtain a valid intrastate
27 23 internet poker business occupational license issued by the
27 24 commission to partner with, contract with, be associated
27 25 with, or participate in the conduct of intrastate internet
27 26 poker operations with the internet poker hub operator or an
27 27 affiliate.
27 28 2. A person employed by or performing any function on behalf
27 29 of the commission shall not do any of the following:
27 30 a. Be an officer, director, owner, or employee of any person
27 31 or entity licensed by the commission.
27 32 b. Have or hold any interest, direct or indirect, in or
27 33 engage in any commerce or business relationship with any person
27 34 licensed by the commission.
27 35 3. An employee of the commission or a relative living in the
28 1 same household as the employee shall not play at any time on
28 2 the state internet poker network.
28 3 4. An occupational licensee of the internet poker hub
28 4 operator or a relative living in the same household as the
28 5 occupational licensee shall not play at any time on the state
28 6 internet poker network. This subsection does not apply to an
28 7 occupational licensee of an affiliate.
28 8 Sec. 31. NEW SECTION. 99H.20 Prohibited acts ==== penalties.
28 9 1. The internet poker hub operator may conduct any proposed
28 10 or authorized game under section 99H.14 unless specifically
28 11 prohibited by the commission or by this chapter.
28 12 2. A person who has not attained twenty=one years of age
28 13 shall not hold an intrastate internet poker occupational
28 14 license or engage in any game conducted on the state internet
28 15 poker network.
28 16 3. An entity shall not offer intrastate internet poker for
28 17 free or for money or any other consideration to individuals
28 18 present in this state unless the entity can demonstrate that
28 19 it is in compliance with the laws and tax regulations of the
28 20 United States and of this state.
28 21 4. An entity that has accepted any wager of money or other
28 22 consideration on any internet gambling activity, including
28 23 poker, from any Iowa resident is not eligible to apply for
28 24 licensure and participate in intrastate internet poker in this
28 25 state.
28 26 5. Except as otherwise provided by law and in addition to
28 27 any other penalty, a person who knowingly makes or causes to be
28 28 made, or aids, assists, or procures another to make, a false
28 29 statement in any report, disclosure, application, or any other
28 30 document required under this chapter or any rule adopted under
28 31 this chapter is subject to an administrative penalty of up to
28 32 ten thousand dollars.
28 33 6. A person who manipulates or attempts to manipulate
28 34 the outcome, payoff, or operation of the play of intrastate
28 35 internet poker by tampering, collusion, or fraud, or by the use
29 1 of any object, instrument, or device, by any means, commits a
29 2 class "C" felony.
29 3 Sec. 32. NEW SECTION. 99H.21 License fees.
29 4 1. Upon the submission of the initial application for an
29 5 internet poker hub operator license and annually thereafter,
29 6 on the anniversary date of the issuance of the initial
29 7 license, the internet poker hub operator licensee shall pay a
29 8 nonrefundable license fee of two hundred fifty thousand dollars
29 9 for the succeeding twelve months of licensure.
29 10 2. Upon submission of the initial application for an
29 11 affiliate license and annually thereafter, as prescribed by
29 12 the commission, the licensee shall pay to the commission a
29 13 nonrefundable license fee of one thousand dollars for the
29 14 succeeding twelve months of licensure.
29 15 3. The license fees required under this section shall
29 16 be considered repayment receipts as defined in section 8.2
29 17 and shall be used by the commission for the regulation,
29 18 investigation, and enforcement of the intrastate internet poker
29 19 provisions under this chapter. These fees shall be accounted
29 20 for separately from taxes or fees paid pursuant to chapters 99D
29 21 and 99F.
29 22 Sec. 33. NEW SECTION. 99H.22 Internet poker hub operator
29 23 ==== advance payment.
29 24 Upon the awarding of a contract to be the internet poker
29 25 hub operator by the affiliates pursuant to its selection under
29 26 section 99H.6, the internet poker hub operator licensee shall
29 27 pay to the commission a nonrefundable payment of three million
29 28 dollars. This payment shall be treated as an advance payment
29 29 to the state by the internet poker hub operator and shall be
29 30 credited against the tax on adjusted gross receipts derived
29 31 from the play of intrastate internet poker.
29 32 Sec. 34. NEW SECTION. 99H.23 Wagering tax on adjusted gross
29 33 receipts.
29 34 For the purposes of this chapter, a tax is imposed on the
29 35 adjusted gross receipts received each fiscal year, applicable
30 1 to the affiliate as a licensee, in the same manner and at the
30 2 rate described in section 99F.11.
30 3 Sec. 35. NEW SECTION. 99H.24 Rulemaking ==== more than one
30 4 internet hub operator.
30 5 The commission shall adopt rules pursuant to chapter 17A
30 6 relating to the operation and administration of intrastate
30 7 internet poker under this chapter. The commission may also
30 8 adopt rules to allow for the operation and licensing of more
30 9 than one internet hub operator.
30 10 Sec. 36. NEW SECTION. 99H.25 Legislative authority ====
30 11 administration of chapter.
30 12 The general assembly finds and declares that it has
30 13 exclusive authority over the conduct of intrastate internet
30 14 poker in this state. Only the commission and other authorized
30 15 state agencies shall administer this chapter and regulate
30 16 the intrastate internet poker industry in this state,
30 17 including operation of the internet poker hub operator, play
30 18 of authorized games, and the state internet poker network
30 19 authorized in this chapter, as provided by law and as provided
30 20 in rules adopted by the commission.
30 21 EXPLANATION
30 22 This bill relates to gambling establishments within the
30 23 state.
30 24 The bill would allow for gambling games at pari=mutuel
30 25 facilities to be used to supplement racing purses in
30 26 perpetuity. Current law requires that such supplements end
30 27 before 2021.
30 28 The bill requires that the Iowa racing and gaming commission
30 29 adopt standards for the length of the thoroughbred and quarter
30 30 horse racing seasons, so that the thoroughbred racing season
30 31 be not less than 67 days in duration and so that the quarter
30 32 horse racing season be not less than 26 days in duration.
30 33 The bill requires that no less than 20 percent of all net
30 34 purse moneys distributed to each breed must be designated
30 35 for certain purposes to foster the growth of the Iowa horse
31 1 breeding industry. The bill also sets requirements for the
31 2 proportionate use of horse purses, so that 76 percent of purse
31 3 funds are designated for thoroughbred races, 15.25 percent of
31 4 purse funds are designated for quarter horse races, and 8.75
31 5 percent of purse funds are designated for standardbred races.
31 6 The bill states that moneys designated for standardbred racing
31 7 can only be used to support harness racing at county fairs.
31 8 The bill also prohibits the horse racetrack in Polk county
31 9 from contributing other funding for such racing that is not
31 10 otherwise provided for under the purse structure designations
31 11 of the bill.
31 12 The bill permits advanced deposit wagering for pari=mutuel
31 13 licensees. The bill would allow for an advanced deposit wager
31 14 to be placed in person at a licensed racetrack enclosure or
31 15 from any other location by telephone or other electronic
31 16 means. In this form of wagering an individual creates an
31 17 account, deposits money into that account, and can use the
31 18 balance within the account for pari=mutuel wagering. The bill
31 19 specifies that 50 percent of the revenue from advanced deposit
31 20 wagering be distributed to certain race purses and the other 50
31 21 percent be directed to the licensee for the pari=mutuel horse
31 22 racetrack in Polk county.
31 23 The bill would prohibit live standardbred horse racing
31 24 by the licensee for the pari=mutuel horse racetrack in Polk
31 25 county.
31 26 The bill eliminates the requirement that county referenda be
31 27 conducted to approve the continued licensing of gambling games
31 28 on excursion boats, in gambling structures, and in racetrack
31 29 enclosures, and makes conforming amendments.
31 30 The bill authorizes the creation of an intrastate internet
31 31 poker network and provides a regulatory structure for its
31 32 implementation, operation, and taxation.
31 33 The bill provides that it may be cited as the "Internet Poker
31 34 Consumer Protection and Revenue Generation Act of 2011". The
31 35 bill states that its purpose is to provide intrastate internet
32 1 poker play only in accordance with federal law, provide a
32 2 new source of revenue for the state, create a contractual
32 3 relationship with an internet poker hub operator with certain
32 4 technical expertise, provide for a negotiated agreement between
32 5 the internet poker hub operator and affiliate licensees, allow
32 6 physical gambling facilities to operate affiliate internet
32 7 sites, ensure taxability, protect player information, ensure
32 8 regulatory access to data and information, ensure customer
32 9 service, and provide information on problem gambling.
32 10 The bill defines certain terms used in new Code chapter 99H.
32 11 The bill provides authority over intrastate internet
32 12 poker to the Iowa racing and gaming commission. The bill
32 13 provides that the commission may adopt certain rules, conduct
32 14 investigations, monitor operations, review books and accounts,
32 15 suspend or revoke licenses upon a hearing, take testimony,
32 16 issue summons and certain subpoenas, monitor and ensure
32 17 collection of taxes, monitor and ensure fairness of games
32 18 conducted, and ensure the protection of player information.
32 19 The bill provides for the licensing of an internet poker
32 20 hub operator by the commission. The bill provides that only a
32 21 person holding the internet poker hub operator license issued
32 22 by the commission and certain affiliates can provide intrastate
32 23 internet poker to registered players. The hub operator must
32 24 be authorized to conduct business in the state, must complete
32 25 an application, and must provide all documentation as required
32 26 by the commission.
32 27 The bill provides that the selection of an internet poker hub
32 28 operator must be by a negotiated agreement with the affiliates,
32 29 and requires that the successful applicant demonstrate the
32 30 ability to ensure that players are at least 21 years of age and
32 31 present within the state at the time of play.
32 32 The bill includes other selection qualifications of
32 33 the internet poker hub operator. The applicant and any
32 34 subcontractor must be authorized to conduct business in Iowa
32 35 and must not have accepted certain types of wagers previously.
33 1 Certain executives or employees of the applicant, and any
33 2 subcontractor, must meet the requirements to obtain an
33 3 intrastate internet poker occupational or business license
33 4 from the commission. The bill does not require here that
33 5 these officers actually obtain such licenses. The applicant,
33 6 subcontractor, and all entities with an ownership interest in
33 7 either must have demonstrated compliance with all federal and
33 8 state laws under which they provide services. The applicant
33 9 must provide certain information on subcontractors and provide
33 10 certain descriptions of how the applicant will comply with the
33 11 standards set under this new Code chapter. The commission may
33 12 by rule require and an applicant must provide any additional
33 13 documentation or information to ensure that an applicant is
33 14 legally, technically, and financially qualified to become the
33 15 state's internet poker hub operator.
33 16 The bill provides for an internet poker hub operator
33 17 license, along with a corresponding application and fees.
33 18 The licensing application requires disclosure of certain
33 19 information related to the applicant and its direct or indirect
33 20 owners. This information includes authorization to conduct
33 21 business in the state, current and historical financial
33 22 information, documents related to legal and regulatory
33 23 proceedings, documents related to business history including
33 24 state and federal tax filings, documents related to the
33 25 nature and sources of financing, documentation of financial
33 26 qualification, and any other information required by the
33 27 commission by rule in order to ensure eligibility.
33 28 The bill requires that internet poker hub operator license
33 29 applicants provide subcontractor information including
33 30 all necessary documentation and information related to
33 31 subcontractors of the internet poker hub operator. This
33 32 information includes but is not limited to a description of
33 33 subcontractor services to be provided, additional subcontractor
33 34 information, and any other information required by the
33 35 commission by rule in order to ensure eligibility.
34 1 The bill requires that an internet poker hub operator
34 2 license applicant provide a description of how it will
34 3 facilitate compliance with the requirements of the chapter
34 4 related to but not limited to registered player requirements
34 5 including intrastate play, age verification, and exclusion of
34 6 problem gamblers; system requirements including connectivity,
34 7 hardware, software, anti=fraud systems, virus prevention, data
34 8 protection, access controls, firewalls, disaster recovery, and
34 9 redundancy; gaming systems requirements including legality,
34 10 independence and fairness, availability of rules, randomness,
34 11 and unpredictability; and accounting systems requirements
34 12 including player accounts, participation fees, transparency and
34 13 reporting, distribution of revenue, and ongoing auditing.
34 14 The bill requires that before the commission issues an
34 15 internet poker hub operator license, that each qualified
34 16 applicant provide evidence of a surety bond of $1 million
34 17 payable to the state for each year that the licensee is so
34 18 licensed. The bond shall be held in full force and effect
34 19 during the term of the license.
34 20 The internet poker hub operator must comply with the
34 21 contract between the affiliates and the operator. The contract
34 22 will be for five years and may be renewed for additional
34 23 five=year periods. The contract may be amended by written
34 24 agreement of the affiliates and the operator. If this new
34 25 Code chapter is amended, the operator may declare the contract
34 26 null and void within 60 days after the effective date of the
34 27 amendment. If the operator fails to make such a declaration,
34 28 the operator shall be bound to the requirements of the new Code
34 29 chapter as amended. In the event that a change in federal law
34 30 renders the provisions of intrastate internet poker illegal,
34 31 the operator may abandon the contract after providing the
34 32 affiliates at least 90 days prior written notice explaining its
34 33 interpretation that continuing to provide services under the
34 34 contract is commercially infeasible.
34 35 The bill provides that only those holding a valid excursion
35 1 gambling boat, gambling structure, or racetrack enclosure
35 2 affiliate license, also referred to as an affiliate license,
35 3 may provide intrastate internet poker for play to registered
35 4 players through the state internet poker network. The bill
35 5 provides that after an affiliate license is issued that it
35 6 must be renewed in conjunction with its excursion gambling
35 7 boat, gambling structure, or racetrack enclosure license
35 8 respectively. The bill requires that any affiliate application
35 9 be made on forms prescribed by the commission and contain all
35 10 information required by the commission by rule. The applicant
35 11 must provide all documentation required, and shall not sell or
35 12 lease licensed property, or contract with any person or entity
35 13 to operate its internet site unless the individual or entity
35 14 purchasing leasing or contracting with the licensee meets and
35 15 complies with all the requirement of Code chapter 99F and this
35 16 new Code chapter. The annual affiliate license fee shall be
35 17 $250,000 payable to the commission and the commission shall
35 18 adopt rules related to affiliate licenses.
35 19 The bill requires business and employee occupational
35 20 licenses. The bill requires that any person employed or
35 21 otherwise working for the internet poker hub operator or an
35 22 affiliate must hold a valid occupational license issued by the
35 23 commission. The bill requires that the internet hub operator
35 24 and any affiliate not employ any individual in any capacity
35 25 related to the operation of intrastate internet poker who does
35 26 not hold a valid occupational license. The bill requires that
35 27 an internet hub operator and any affiliate not contract with
35 28 or employ a business required to hold a business occupational
35 29 license which does not hold such a license. The bill
35 30 requires that any proprietorship, partnership, corporation,
35 31 subcontractor, or other entity must obtain a business
35 32 occupational license issued by the commission to conduct
35 33 business with the internet poker hub operator or any affiliate.
35 34 The bill requires the commission to adopt a schedule
35 35 for occupational license renewals and requires that all
36 1 occupational licenses be nontransferable. The bill requires
36 2 that one apply for an occupational license or renewal, pay
36 3 an appropriate fee and provide all required information or
36 4 documentation. The commission must adopt rules regarding
36 5 license applications and renewals. Licenses will be valid for
36 6 three years upon payment of a full occupational license fee for
36 7 the three years. The initial employee occupational license
36 8 fee shall not exceed $50 annually. The initial business
36 9 occupational license fee shall not exceed $1,000 annually. An
36 10 individual holding a valid individual occupational license
36 11 issued by the commission under Code section 99F.6 is not
36 12 required to obtain a license under this new Code section
36 13 99H.11.
36 14 The bill provides that the commission may deny an
36 15 application for, or revoke, suspend, or place restrictions on,
36 16 a license of any person or entity that was refused a similar
36 17 license elsewhere, that is under suspension or has unpaid fines
36 18 elsewhere, that has violated this new Code chapter or the
36 19 rules adopted by the commission, or that has been convicted of
36 20 certain offenses.
36 21 The bill sets eligibility requirements for registered
36 22 players. The bill requires that a registered player be located
36 23 within the state, be at least 21 years of age, and must not have
36 24 submitted a completed internet poker self=exclusion form. The
36 25 bill provides certain requirements for the creation and use of
36 26 an internet poker self=exclusion form. The bill provides that
36 27 a person shall not bring any action of negligence or any other
36 28 claim resulting from a self=excluded individual gaining access
36 29 to play despite their request to be excluded.
36 30 The bill requires that in order for an internet poker hub
36 31 operator to offer a specific game, the hub operator must
36 32 provide the commission with certain information, including
36 33 a description of the game and documentation related to the
36 34 development and testing of the game. After submission of this
36 35 information, the internet poker hub operator may begin offering
37 1 the game and the game shall be considered authorized if not
37 2 disapproved by the commission within 30 days. All games must
37 3 be conducted in accordance with game and betting rules. The
37 4 internet poker hub operator must ensure the fairness of all
37 5 games and must ensure the display of the game's name, any
37 6 restrictions on play, the rules of the game, play instructions,
37 7 unit and total bets permitted, the player's current account
37 8 balance, and any other information deemed necessary by the
37 9 internet poker hub operator.
37 10 The bill requires that all proposed and authorized game
37 11 results be unpredictable even given complete knowledge of
37 12 algorithms and hardware generating sequence, and all previously
37 13 generated numbers. The bill requires the internet poker hub
37 14 operator to take steps to minimize fraud and cheating through
37 15 collusion. The bill requires that if the operator becomes
37 16 aware of fraud or cheating actually taking place, the operator
37 17 must attempt to end those activities and report relevant facts
37 18 to the commission. The operator is required to inform the
37 19 commission of complaints and investigate such complaints. The
37 20 bill limits legal actions against the operator in the event
37 21 that the operator can demonstrate taking action upon becoming
37 22 aware of fraud or cheating. The bill requires that if a server
37 23 or software does not allow a game to be completed, that the
37 24 hand be voided and all funds relating to the incomplete hand
37 25 shall be returned to the registered player's account.
37 26 The bill provides for the creation of registered player
37 27 accounts by the internet poker hub operator. The operator
37 28 must ensure that personally identifiable information is secure
37 29 but accessible to individual players and regulators. The
37 30 bill requires that an individual be a registered player to
37 31 participate in any game on the state internet poker network.
37 32 The bill allows for accounts to be established in person,
37 33 by mail, by telephone, or by electronic means. The bill
37 34 requires that an individual establishing an account provide
37 35 the individual's first name and surname, the address of the
38 1 individual's principal residence, telephone number, social
38 2 security number, proof of age, a valid e=mail address, and the
38 3 source of funds used to establish the account. An individual
38 4 may register up to three registered player accounts per year
38 5 and shall not have more than three registered player accounts
38 6 at any time. The hub operator must conspicuously present its
38 7 privacy policies before such registration may be completed.
38 8 The bill requires that personally identifiable information
38 9 not be shared with any nongovernmental individual or entity
38 10 not acting as a subcontractor. All information will be shared
38 11 with the commission. The hub operator must require that an
38 12 individual agree with the terms of use before the individual
38 13 may become a registered player. The hub operator must provide
38 14 registered players with the means to update their information,
38 15 and may suspend or revoke the accounts of registered players
38 16 for certain reasons. The hub operator must establish and
38 17 maintain and account for each registered player with means of
38 18 placing funds into the account. The bill requires the hub
38 19 operator to maintain certain records, to prohibit certain
38 20 wagers, not provide credit for a player's account, and to
38 21 provide a registered player with the means to transfer money
38 22 out of the player's account. The bill requires the hub
38 23 operator to provide registered players with certain functional
38 24 controls related to their wagering and to provide them with
38 25 certain information related to their play.
38 26 The bill requires the internet poker hub operator to
38 27 establish a book of accounts and make all financial records
38 28 available to the commission. The hub operator must demonstrate
38 29 its system of maintaining records and reports readily available
38 30 to the commission. The records and reports must include
38 31 certain monthly statements, a calculation of fees payable to
38 32 government, the identity of registered players, certain player
38 33 account balances, wagers, and results of each game with time
38 34 stamps. The hub operator must reconcile registered players'
38 35 accounts monthly.
39 1 The bill provides technical requirements. An internet poker
39 2 hub operator must put in place certain technical systems to
39 3 aid the commission in its regulatory, consumer protection,
39 4 and revenue=raising functions. The operator must ensure
39 5 against tampering or manipulation with relevant systems, and
39 6 both define and document certain methodologies related to
39 7 gaming software, server connectivity, certain game procedures,
39 8 consumer protections, advertising, money=laundering, and
39 9 certain preventive and detective controls.
39 10 The bill provides that the internet hub operator must charge
39 11 certain fees. The bill explicitly prohibits certain employees
39 12 of the commission and employees' relatives living in the same
39 13 household from playing on the state internet poker network.
39 14 The same limitation applies to occupational licensees and their
39 15 relatives. The bill provides additional limits for commission
39 16 employees.
39 17 The bill enumerates certain prohibited acts and provides
39 18 penalties. The bill provides that the internet poker hub
39 19 operator may conduct any proposed game unless prohibited by the
39 20 commission or the new Code chapter. The bill provides that
39 21 a person under the age of 21 shall not hold an occupational
39 22 license or participate in any of these games.
39 23 The bill provides that it is a violation of state law for
39 24 any entity to offer internet poker for free, for money, or
39 25 for any other consideration to individuals within this state
39 26 unless that entity can demonstrate compliance with the laws
39 27 and tax regulations of this state and the United States. The
39 28 bill prohibits any entity that has accepted any wager of money
39 29 or other consideration on any internet gambling activity from
39 30 being eligible to apply for licensure in intrastate internet
39 31 poker in this state.
39 32 The bill provides for an administrative penalty of up to
39 33 $10,000 to be assessed on any individual who knowingly makes,
39 34 causes to be made, aids, assists, or procures another to make a
39 35 false statement in any report, disclosure, application, or any
40 1 other document required in this new Code chapter in addition to
40 2 any other penalty, and except as otherwise provided by law.
40 3 The bill creates a class "C" felony for manipulating or
40 4 attempting to manipulate the outcome, payoff, or operation of
40 5 intrastate internet poker by tampering, collusion, fraud, or by
40 6 the use of any object, instrument, or device.
40 7 The bill provides for license fees for the internet poker hub
40 8 operator and affiliates. The hub operator licensee is required
40 9 to pay an annual fee of $250,000 and the affiliates licensees
40 10 are required to pay an annual fee of $1,000 each. These fees
40 11 are nonrefundable. The commission is required to use these
40 12 fees to cover costs related to regulating, investigating, and
40 13 enforcing this new Code chapter. The bill further requires
40 14 that these fees be accounted for separately from taxes or fees
40 15 paid pursuant to Code chapters 99D and 99F.
40 16 The bill requires that the selected internet poker hub
40 17 operator licensee pay the commission a nonrefundable $3 million
40 18 upon being awarded such license. This payment shall be treated
40 19 as an advance payment to the state by the hub operator and this
40 20 payment will be credited against the tax on adjusted gross
40 21 receipts derived from the play of intrastate internet poker.
40 22 For the purposes of the new Code chapter, a tax is imposed
40 23 on the adjusted gross receipts received each fiscal year in
40 24 the same manner and at the rate described in section 99F.11,
40 25 applicable to affiliates as licensees.
40 26 The bill provides the commission with rulemaking authority
40 27 and allows for the operation and licensing of more than one
40 28 internet hub operator. The bill also provides a legislative
40 29 finding that the general assembly has exclusive authority
40 30 over intrastate internet poker. The bill provides that the
40 31 commission and other authorized state agencies must administer
40 32 this new Code chapter and regulate the industry as provided by
40 33 law and by rules adopted by the commission.
LSB 2322SV (1) 84
aw/rj
Text: SF457
Text: SF459