HOUSE BILL 314

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Nate Gentry

AN ACT

RELATING TO FANTASY CONTESTS; ENACTING THE FANTASY CONTESTS ACT; DEFINING TERMS; ESTABLISHING CONSUMER PROTECTIONS FOR PARTICIPANTS OF FANTASY CONTESTS WITH AN ENTRY FEE; PROVIDING PENALTIES; PROVIDING THAT FANTASY CONTESTS ARE EXEMPT FROM GAMBLING PROHIBITIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Fantasy Contests Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Fantasy Contests Act:

          A. "confidential information" means information related to the play of a fantasy contest by fantasy contest players obtained as a result of or by virtue of a person's employment;

          B. "entry fee" means cash or cash equivalent that is required to be paid by a fantasy contest player to a fantasy contest operator to participate in a fantasy contest;

          C. "fantasy contest" means a fantasy or simulated game or contest in which:

                (1) the value of all prizes and awards offered to winning players is established and made known to the players in advance of the contest;

                (2) all winning outcomes reflect the relative knowledge and skill of the players and are determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sporting events; and

                (3) winning outcomes are not based on the score, point spread or any performance of any single actual sports team or combination of such teams or solely on any single performance of an individual athlete in any single actual sporting event;

          D. "fantasy contest operator" means a person or entity that offers fantasy contests with an entry fee for a cash prize to the general public; and

          E. "fantasy contest player" means a person who participates in a fantasy contest offered by a fantasy contest operator.

     SECTION 3. [NEW MATERIAL] CONSUMER PROTECTION.--

          A. A fantasy contest operator shall implement procedures for fantasy contests with an entry fee that are intended to:

                (1) prevent employees of the fantasy contest operator, and relatives living in the same household as such employees, from competing in any such public fantasy contests offered by any fantasy contest operator in which the operator offers a cash prize;

                (2) prevent sharing of confidential information that could affect such fantasy contest play with third parties until the information is made publicly available;

                (3) prevent the fantasy contest operator from participating in such a fantasy contest he or she offers;

                (4) verify that a fantasy contest player in such a fantasy contest is eighteen years of age or older;

                (5) ensure that individuals who participate or officiate in a game or contest that is the subject of such a fantasy contest will be restricted from entering such a fantasy contest that is determined, in whole or in part, on the accumulated statistical results of a team of individuals in a game or contest in which he or she is a player;

                (6) allow individuals to restrict themselves from entering such a fantasy contest upon request and provide reasonable steps to prevent the person from entering such fantasy contests offered by the fantasy contest operator;

                (7) disclose the number of entries that a fantasy contest player may submit to each such fantasy contest and provide reasonable steps to prevent players from submitting more than the allowable number; and

                (8) segregate fantasy contest player funds from operational funds and maintain a reserve in the form of cash, cash equivalents, an irrevocable letter or credit, a bond or a combination thereof, in the amount of the deposits made to the accounts of fantasy contest players for the benefit and protection of the funds held in such accounts.

          B. A fantasy contest operator offering fantasy contests with an entry fee in this state shall contract with a third party to annually perform an independent audit, consistent with the standards established by the public company accounting oversight board, to ensure compliance with this section and submit the results of such audit to the secretary of state.

     SECTION 4. [NEW MATERIAL] PENALTIES.--A person, firm, corporation, association, agent or employee who violates the Fantasy Contests Act is subject to a civil penalty of not more than one thousand dollars ($1,000) for each violation, which shall accrue to the state and may be recovered in a civil action brought by the secretary of state.

     SECTION 5. [NEW MATERIAL] EXEMPTION.--Fantasy contests, as defined in Section 2 of the Fantasy Contests Act, are exempt from Chapter 30, Article 19 NMSA 1978.

     SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2016.

- 5 -