Sec. 7. State wagering program standards
3,482 words·~16 min read·
/bill/119/s/4060/is/section-7A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Attorney General shall approve an application under section 6 unless the Attorney General determines that the proposed State wagering program does not meet the standards set forth in subsection
(b)of this section. A State wagering program shall meet each of the following standards: Establish or designate a public entity in the applicable State as the State regulatory entity for the purposes of regulating online prediction markets and enforcing wagering laws in the State. With respect to any authorization of wagering on an online prediction market, provide that such wagering, as available, is available only to— individuals located in the State; or in the case of an interstate wagering compact approved by the Attorney General, individuals located in States and on Indian lands of Indian Tribes that are party to the compact. Include location verification requirements reasonably designed to prevent an individual from placing a wager on an online prediction market from a location other than a location described in clause (i). Provide that an operator of an online prediction market shall not accept a wager unless such wager or class of wagers is expressly approved by the State regulatory entity. Direct the State regulatory entity to establish criteria for decisions with respect to the approval of a wager or a class of wagers, such as whether the outcome of the event or contingency on which the wager is placed is— verifiable; generated by a reliable and independent process; and unlikely to be affected by any wager placed. Prohibit the State regulatory entity from approving, or an operator of an online prediction market from accepting, a proposition bet on— any amateur athletic competition; or any intercollegiate sport (as defined in section 2 of the Sports Agent Responsibility and Trust Act ( 15 U.S.C. 7801 )). Prohibit the State regulatory entity from approving, or an operator of an online prediction market from accepting, a wager on any sporting event once such event has commenced. Prohibit the State regulatory entity from approving, or an operator of an online prediction market from encouraging, customers to make deposits by offering financial incentives, including bonus funds or gambling credits when the account of a customer approaches or reaches a zero balance. Prohibit the State regulatory entity from approving, or an operator of an online prediction market from providing, anything of value that is greater than $5 as a form of reward or incentive linked to the level, amount, frequency, scope, pace, duration, or rate or gambling activity of a customer. Prohibit the State regulatory entity from approving, or an operator of an online prediction market from providing— compensation in any form that is directly or indirectly connected to the deposits, gambling activity, gambling wins, gambling losses, or the level, amount, frequency, scope, pace, duration, or rate of gambling activity of a customer; or cash, gambling credit, prizes, gifts, merchandise, event tickets or passes, or property (real or personal) connected to the deposits, gambling activity, gambling wins, gambling losses, or level, amount, frequency, scope, pace, duration, or rate of gambling activity of a customer. In this paragraph, the term necessary to maintain contest integrity means that, in the absence of a restriction, there is a reasonably foreseeable risk that the outcome of the event or contingency on which the wager is placed would be affected by the wager. Prohibit an online prediction market from accepting a wager in violation of a notice of restriction received by the online prediction market under subparagraph (E)(i). With respect to an event sponsored, organized, or conducted by any person, permit the person to submit to the State regulatory entity a request to restrict, limit, or exclude wagers on 1 or more events if the applicable person determines that such restriction is necessary to maintain contest integrity. Provide that the State regulatory entity shall establish reasonable deadlines for the submission of a request under clause
(i)in advance of the applicable event. Provide that the State regulatory entity shall promptly— approve a request described in subparagraph (C)(i) unless the State regulatory entity determines, considering any information provided by the person that submitted the request and any other relevant information, that a restriction is not necessary to maintain contest integrity; provide a written explanation of a determination under clause
(i)to approve or deny a request; make such written explanation available to the public; and provide a process by which the person that submitted the request may seek review of such determination. Provide that the State regulatory entity shall establish a process to— provide to operators of online prediction markets prompt notice of any restriction approved by the State regulatory entity; and make such notice publicly available. Prohibit an online prediction market from accepting wagers from any— individual younger than 21 years of age; individual on the national self-exclusion list; athlete, coach, official, or employee of a sports organization or any club or team of a sports organization, with respect to a sporting event sponsored, organized, or conducted by the sports organization; employee of a player or an official union of a sports organization, with respect to a sporting event sponsored, organized, or conducted by the sports organization; individual who, with respect to a sporting event sponsored, organized, or conducted by a sports organization, is— credentialed or accredited by the sports organization; and prohibited from placing a wager by the terms of such credential or accreditation; or individual convicted of an offense under subsection
(a)of section 224 of title 18, United States Code. Provide that an operator of an online prediction market shall determine the result of a wager only with data that is obtained from a source that the State regulatory entity has— found to provide— substantial speed, accuracy, and consistency; and only data that is— legally obtained; and in full compliance with the terms of any applicable contract or license; expressly authorized to provide such data to online prediction markets; and identified in the application of the State regulatory entity under section 6. Provide that the statistics, result, outcome, or other data used by an operator of an online prediction market for a purpose other than to determine the result of a wager shall be in the public domain or otherwise legally obtained. Provide a process by which an individual may restrict himself or herself from placing a wager with an operator of an online prediction market located in the State, including by imposing wager limits. Provide, through the State regulatory entity acting in cooperation with the Assistant Secretary for Mental Health and Substance Use, a process by which an individual may restrict himself or herself from placing a wager with an operator of an online prediction market located in any wagering opt-in State, including by imposing wager limits and placing himself or herself on the national self-exclusion list. Provide that an operator of an online prediction market may not accept a wager by an individual who is— described in clause (i); or included on the national self-exclusion list. Prohibit an operator of an online prediction market from— requiring an individual engaged in wagering to participate in a publicity or an advertising activity of the online prediction market as a condition of withdrawal of the winnings of the individual; and imposing on any individual engaged in wagering— a minimum or maximum withdrawal limit for the account of the individual; any restriction on the right of the individual to make a withdrawal from the account of the individual based on the extent of the wagering by the individual; an unreasonable deadline for the provision of information relating to the identity of the individual as a condition of withdrawal from the account of the individual; or a dormancy charge for an account of the individual that is not used to place a wager. Provide that an operator of an online prediction market shall provide an individual with adequate and clear information relating to any applicable restriction or condition before the individual opens an account with the online prediction market. Provide that an operator of an online prediction market shall provide to an individual engaged in wagering clear, concise, and unambiguous information relating to any bonus offered, including— the terms and conditions for awarding, receiving, or withdrawal of the bonus; and a description of any and all wagering requirements. Provide that the information described in clauses
(i)and
(ii)be available to the public. Provide that an operator of an online prediction market shall— before accepting a wager, provide an individual with adequate and clear information on the actual odds of winning a wager, as calculated by the operator of the online prediction market; and provide an individual placing a wager with an opportunity to cancel the wager without any cost or penalty, and provide information to the individual regarding such opportunity. Provide that an operator of an online prediction market shall allocate an appropriate percentage of the revenue from wagering to— treatment for gambling disorder; and education on responsible gaming. Provide that an operator of an online prediction market shall maintain a reserve in an amount not less than the sum of— the amounts held by the operator of the online prediction market for the account of patrons; the amounts accepted by the operator of the online prediction market as wagers on contingencies the outcomes of which have not been determined; and the amounts owed but unpaid by the operator of the online prediction market on winning wagers during the period for honoring winning wagers established by State law or the operator of the online prediction market. Provide that an operator of an online prediction market— may not accept more than 5 deposits from an individual during a 24-hour period; may not accept deposits made using a credit card; and shall be required, before accepting wagers from an individual in an amount that is more than $1,000 during a 24-hour period or $10,000 during a 30-day period, to conduct an affordability check which shall be satisfied by 1 or both of the following ways: Verification that the proposed deposit is not greater than 30 percent of the monthly income of the individual. Verification through a reasonable lender standard based on issuance of an unsecured loan for the proposed deposit through methods normally used by consumer lenders. Provide that an operator of an online prediction market may not use artificial intelligence to— track the wagers of an individual; create an offer or promotion targeting a specific individual; or create a gambling product, such as a proposition bet or a microbet. Provide that advertisements for an online prediction market— shall— disclose the identity of the online prediction market; and provide information about how to access resources relating to gambling addiction; shall not recklessly or purposefully target— problem gamblers; individuals suffering from gambling disorder or individuals who have placed themselves on a self-exclusion list; or individuals who are ineligible to place a wager, including individuals younger than 21 years of age (including through the placement of advertisements in locations where underage users are most prominent); may not be broadcast— between the hours of 8:00 a.m. and 10:00 p.m. local time; or during a live broadcast of a sporting event; and may not include— odds boosts or similar offers, including advertising that contains the phrase bonus , no sweat , bonus bet , or any other similar term; or any information on how to place a wager or how wagers work. Provide that an operator of an online prediction market located in the State shall be licensed by the State regulatory entity. Provide that before granting a license to an online prediction market, the State regulatory entity shall make a determination, based on a completed background check and investigation, with respect to whether the prospective online prediction market and any person considered to be in control of the prospective online prediction market is suitable for license in accordance with suitability standards established by the State regulatory entity. Provide that if a prospective online prediction market is a corporation, partnership, or other business entity, a background check and investigation shall occur with respect to— the president or other chief executive of the corporation, partnership, or other business entity; and any other partner or senior executive and director of the corporation, partnership, or other business entity, as determined by the State regulatory entity. Establish standards and procedures for conducting the background checks and investigations described in this subparagraph. With respect to the suitability standards under subparagraph (B)(i), provide that a prospective online prediction market shall not be determined to be suitable for licensing as an online prediction market if the operator of the prospective online prediction market— has failed to provide information and documentary material for a determination of suitability for licensing as an online prediction market; has supplied information which is untrue or misleading as to a material fact pertaining to any such determination; has been convicted of an offense punishable by imprisonment of more than 1 year; is delinquent in— filing any applicable Federal or State tax returns; or the payment of any taxes, penalties, additions to tax, or interest owed to the United States or a State; on or after October 13, 2006— has knowingly participated in, or should have known the operator of the prospective online prediction market was participating in, an illegal internet gambling activity, including— taking an illegal internet wager; payment of winnings on an illegal internet wager; promotion through advertising of an illegal internet gambling website or service; or collection of any payment on behalf of an entity operating an illegal internet gambling website; or has knowingly been owned, operated, managed, or employed by, or should have known the prospective online prediction market was owned, operated, managed, or employed by, any person who was knowingly participating in, or should have known the person was participating in, an illegal internet gambling activity, including an activity described in items
(aa)through
(dd)of subclause (I); has— received any assistance, financial or otherwise, from a person who has, before the date of enactment of this Act, knowingly accepted wagers from any other person who is physically present in the United States in violation of Federal or State law; or provided any assistance, financial or otherwise, to a person who has, before the date of enactment of this Act, knowingly accepted wagers from any other person who is physically present in the United States in violation of Federal or State law; with respect to any other entity that has accepted a wager from any individual in violation of United States law, has purchased or otherwise obtained— such entity; a list of the customers of such entity; or any other part of the equipment or operations of such entity; fails to certify in writing, under penalty of perjury, that the applicant or other such person, and all affiliated business entities (including all entities under common control), during the entire history of such applicant or other such person and all affiliated business entities— have not committed an intentional felony violation of Federal or State wagering law; and have used diligence to prevent any United States person from placing a wager on an internet site in violation of Federal or State wagering laws; or operates an online prediction market or other wagering service outside the United States that has failed to prevent any United States person from placing a wager that does not comply with Federal or State wagering laws. Establish standards and procedures for suspending or revoking the license of an operator of an online prediction market. Provide that an operator of an online prediction market— shall ensure that each existing and newly hired employee or contractor of the online prediction market undergo an annual criminal history background check; and shall not employ or enter into a contract with any individual who has been convicted of a Federal or State crime relating to wagering. With respect to each wager accepted by an operator of an online prediction market or attempted to be placed by an individual with an operator of an online prediction market, provide that the operator of the online prediction market shall secure and maintain a record of the following: The name, permanent address, date of birth, and social security number or passport number of the individual who placed, or attempted to place, the wager, which the operator of the online prediction market shall verify in accordance with the requirements for verification of identity in parts 1010.312 and 1021.312 of title 31, Code of Federal Regulations (or any successor regulation). The amount and type of the wager. The date and time at which the wager was placed or attempted to be placed. The location at which the wager was placed or attempted to be placed, including the internet protocol address, if applicable. The outcome of the wager. Provide that, in addition to the records required to be maintained pursuant paragraph (A), an operator of an online prediction market shall be required to maintain any other records relating to a suspicious transaction, including video recordings, in the possession, custody, or control of the operator of the online prediction market. Provide that an operator of an online prediction market shall be required to maintain each record required under this paragraph for not fewer than 6 years after the date on which the record is created. Provide that an operator of an online prediction market and the State regulatory entity shall take reasonable steps to prevent unauthorized access to, or dissemination of, wagering and customer data. Provide that an operator of an online prediction market shall provide to the State regulatory entity and the Attorney General anonymized wagering data in real-time or as soon as practicable, but not later than 24 hours, after the time at which a wager is accepted by the operator of the online prediction market. Provide that each operator of an online prediction market located in the State shall promptly report the information described in paragraph (10)(A) for any suspicious transaction to the State regulatory entity, in such manner and accompanied by such additional information as the State regulatory entity may require. Subject to clause (ii), provide that an operator of an online prediction market shall simultaneously transmit to any applicable sports organization, and any component of the Department of Justice or other Federal law enforcement entity designated by the Attorney General to receive such reports, any suspicious transaction report submitted to a State regulatory entity under subparagraph (A). Except as provided in subclause (II), a suspicious transaction report submitted to a sports organization shall not contain any personally identifiable information relating to any individual who placed, or attempted to place, a wager. A suspicious transaction report submitted to a sports organization shall include any available personally identifiable information relating to an individual described in subparagraph (C), (D), or
(E)of paragraph (4). Provide that the State regulatory entity, in consultation with law enforcement, shall develop and implement a strategy to enforce the wagering laws of the State. Provide adequate authority to the State regulatory entity and law enforcement, as appropriate, to monitor compliance with and enforce the wagering laws of the State, including— the authority and responsibility to conduct periodic audits and inspect the books and records of each online prediction market located or operating in the State; and a requirement that the State regulatory entity shall refer evidence of potential criminal violations to the appropriate law enforcement entity. Provide that any operator of an online prediction market located or operating in the State shall cooperate with any lawful investigation conducted by— the State regulatory entity; Federal or State law enforcement; or a sports organization, with respect to a wager— on a sporting event sponsored, organized, or conducted by the sports organization; placed by or on behalf of an individual described in subparagraph (C), (D), or
(E)of paragraph (4); and accepted by the operator of the online prediction market. Provide that the State regulatory entity shall cooperate with any lawful investigation conducted by— Federal or State law enforcement; or a sports organization, with respect to a wager— on a sporting event sponsored, organized, or conducted by the sports organization; and accepted by an online prediction market located or operating in the State. Provide that each operator of an online prediction market shall devise and maintain a system of internal controls sufficient to provide reasonable assurances that wagers are accepted in accordance with all applicable laws, regulations, and policies. Provide that the State regulatory entity shall adopt and publish minimum standards for internal control procedures. Provide that each operator of an online prediction market shall submit to the State regulatory entity not less frequently than annually the written system of internal controls of the online prediction market. Provide that system of internal controls of an online prediction market shall be evaluated on a periodic basis, but not less frequently than every 3 years, by the State regulatory entity or an independent third-party auditor.
Connectionstraces to 1
Traces to 1 document
U.S. Code
Citation graph
cites case law
Sec. 7
State wagering program standards
Cites 1Cited by 0 across 0 sources