HB 385: "An Act authorizing mobile sports gaming; relating to the regulation of mobile sports gaming; imposing a tax on mobile sports gaming revenue; imposing a tax on fantasy sports; relating to criminal history record checks; and providing for an effective date."
00 HOUSE BILL NO. 385 01 "An Act authorizing mobile sports gaming; relating to the regulation of mobile sports 02 gaming; imposing a tax on mobile sports gaming revenue; imposing a tax on fantasy 03 sports; relating to criminal history record checks; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 04.11.370(c) is amended to read: 06 (c) If the board receives notice from the Department of Revenue that a 07 licensee or permittee has violated a provision of AS 05.15 or AS 05.18 related to 08 gambling, the board 09 (1) may suspend the license or permit; and 10 (2) shall suspend the license or permit for a period of at least 30 days if 11 the offense is the person's second or subsequent violation of AS 05.15 or AS 05.18 12 related to gambling. 13 * Sec. 2. AS 05 is amended by adding a new chapter to read: 14 Chapter 18. Mobile Sports Gaming.
01 Sec. 05.18.010. Mobile sports gaming license. (a) A person may not offer or 02 operate mobile sports gaming in this state without a license issued under this chapter. 03 (b) The commissioner may issue or renew a mobile sports gaming license to a 04 person that 05 (1) submits an application on a form approved by the commissioner; 06 (2) pays the license fee required under (d) of this section; 07 (3) meets the application requirements established under (c) of this 08 section; 09 (4) has or has a partner or joint operating agreement with a person who 10 has a mobile sports gaming license in at least three other states; 11 (5) meets any other qualifications established by the commissioner by 12 regulation; and 13 (6) has submitted the fingerprints of the applicant and each person 14 disclosed under (c)(2) of this section and has provided the fees required by the 15 Department of Public Safety under AS 12.62.160 for criminal justice information and 16 a national criminal history record check; the fingerprints and fees shall be forwarded 17 to the Department of Public Safety to obtain a report of criminal justice information 18 under AS 12.62 and a national criminal history record check under AS 12.62.400; or 19 submits the results of a criminal history record check conducted in another state within 20 the previous 12 months and a certification that there has been no material change since 21 the criminal history record check was completed. 22 (c) An applicant for a license or license renewal under this chapter shall 23 (1) include in the application the name, current address, and telephone 24 number of the applicant; 25 (2) disclose, if the applicant is not an individual, 26 (A) the state in which the applicant is incorporated, organized, 27 or formed, and any state in which the applicant is registered to do business; 28 (B) the names and addresses of all of the applicant's partners, 29 executive officers, managers, directors, and corporate officers; 30 (C) each corporate holding company, parent company, or 31 subsidiary company of a corporate applicant and each person that owns 15
01 percent or more of the corporate applicant's business and that has the ability to 02 control the activities of the corporate applicant or elect a majority of the board 03 of directors of that corporate applicant, except for a bank or other licensed 04 lending institution that holds a mortgage or other lien acquired in the ordinary 05 course of business; 06 (D) each person associated with a noncorporate applicant that 07 directly or indirectly holds a beneficial or proprietary interest in the 08 noncorporate applicant's business operation or that the commissioner otherwise 09 determines has the ability to control the noncorporate applicant; and 10 (E) any executive, employee, or agent of an applicant who has 11 ultimate decision-making authority over the conduct of the applicant's mobile 12 sports gaming operations in the state; 13 (3) provide, for the applicant and each individual disclosed on an 14 application, a record of any other gambling-related licenses or applications previously 15 issued or revoked under this chapter or in any other jurisdiction; 16 (4) provide proof that the mobile sports gaming system the applicant 17 intends to use has been tested and certified for use in another jurisdiction of the United 18 States by an independent testing laboratory; and 19 (5) provide any additional information required by the commissioner. 20 (d) An applicant for an initial license or license renewal under this section 21 shall pay a license fee of $5,000. In addition to the license fee, the commissioner may 22 charge a processing fee for an initial or renewed license. 23 (e) A mobile sports gaming license issued under this section grants a licensee 24 the authority to conduct mobile sports gaming through any mobile application or 25 digital platform approved by the commissioner within the terms of the license and 26 regulations adopted under this chapter. A mobile sports gaming license or renewal is 27 valid for three years unless suspended or revoked under AS 05.18.020. 28 (f) A licensee shall give 30 days' written notice of any material change to 29 information provided in the licensee's application for a license or license renewal, 30 including any change in the information disclosed in (c)(2) of this section. 31 (g) The commissioner may not approve the issuance of more than 10 mobile
01 sports gaming licenses under this section. 02 (h) The commissioner shall keep confidential all application information used 03 in the course of approving or denying an application, including any proprietary 04 information, confidential commercial information, or confidential financial 05 information that pertains to an applicant or licensee. The commissioner may release 06 records and information that are kept confidential under this subsection 07 (1) if the release is necessary to comply with a court order, if the 08 requester is a state or federal agency, or if the requester is under contract with the state 09 or federal agency to conduct research; 10 (2) if the information is an aggregate compilation of financial or tax 11 information from three or more licensees; and 12 (3) after 25 years, at which time the records and information that were 13 kept confidential under this subsection become public records subject to inspection 14 and copying under AS 40.25.110 - 40.25.140. 15 Sec. 05.18.020. Denial, reprimand, suspension, or revocation of license. 16 The commissioner may deny a license to an applicant, reprimand a licensee, or 17 suspend or revoke a license if the applicant or licensee 18 (1) knowingly makes a false statement of material fact to the 19 commissioner; 20 (2) intentionally does not disclose the existence or identity of a person 21 as required under AS 05.18.010(c)(2); 22 (3) has had a license revoked by any government agency responsible 23 for the regulation of gaming activities; 24 (4) has been convicted of a crime of moral turpitude, a gambling- 25 related offense, or a theft or fraud offense or has otherwise demonstrated, evidenced 26 by a police record or other satisfactory evidence, a lack of respect for law and order; 27 (5) has not demonstrated to the satisfaction of the commissioner 28 financial responsibility sufficient to adequately meet the requirements of the operation 29 of a mobile sports gaming business or proposed mobile sports gaming business; or 30 (6) has not met the requirements of this chapter. 31 Sec. 05.18.030. Licensee duties. A licensee shall
01 (1) use a software monitoring system that meets industry standards to 02 identify irregularities in volume or usage changes that may signal suspicious activity 03 requiring further investigation; a licensee shall immediately report irregular activity to 04 the commissioner for further investigation; 05 (2) immediately report to state or federal law enforcement any facts or 06 circumstances related to the operation of a mobile sports gaming system that constitute 07 a violation of state or federal law, any suspicious betting over a threshold set by the 08 licensee and approved by the commissioner, or any betting that would require 09 disclosure under 31 C.F.R. 1021.320; 10 (3) conduct all mobile sports gaming activities in a manner that does 11 not threaten the public health, safety, or welfare of the people of the state; 12 (4) verify the identity of a person opening a sports wagering account in 13 order to ensure that persons placing wagers are real and to monitor risks; 14 (5) keep current all payments and obligations to the commissioner; 15 (6) prevent any person from tampering or interfering with the 16 operation of mobile sports gaming activities; 17 (7) ensure that mobile sports gaming occurs only when using a mobile 18 application or digital platform approved by the commissioner, in a manner consistent 19 with federal law, that uses communication technology to accept wagers originating in 20 the state or in a state or jurisdiction approved by the commissioner; 21 (8) maintain sufficient funds to conduct mobile sports gaming at all 22 times; and 23 (9) maintain daily records of gross receipts and adjusted gross receipts 24 and timely file any additional reports required by the commissioner. 25 Sec. 05.18.040. Commissioner of revenue to administer chapter; duties of 26 commissioner. (a) The commissioner shall 27 (1) administer and enforce this chapter; 28 (2) keep a record of all licenses issued under this chapter; 29 (3) impose and collect all fees, penalties, and tax on adjusted gross 30 revenue imposed by this chapter. 31 (b) The commissioner may
01 (1) conduct hearings and investigations necessary to administer this 02 chapter; 03 (2) issue a subpoena to compel the attendance of a witness or a 04 subpoena duces tecum for the production of books, records, and other relevant 05 documents necessary for an investigation under this chapter; 06 (3) administer an oath or affirmation to a witness; 07 (4) take appropriate action to enforce this chapter, including filing a 08 petition for injunctive relief, bringing a civil action, or issuing a notice of violation of 09 this chapter or a regulation adopted under this chapter, an order to cease and desist, or 10 a closure order; 11 (5) enter into a mobile sports gaming agreement with another state, 12 territory, jurisdiction, government, or other entity to accept wagers from patrons 13 located outside the state, in compliance with applicable state and federal law; and 14 (6) take all necessary actions to ensure that a mobile sports gaming 15 agreement entered into under this chapter becomes effective. 16 Sec. 05.18.050. House rules; required disclosures. (a) A licensee shall adopt 17 house rules for mobile sports gaming transactions. The house rules must specify the 18 amount to be paid on winning wagers, the circumstances under which the licensee will 19 void a bet, treatment of errors, late bets, and related contingencies, and the effect of 20 schedule changes. A licensee shall obtain approval of house rules from the 21 commissioner before starting mobile sports gaming operations. 22 (b) The house rules must be available on the mobile sports gaming system. 23 (c) Each licensee shall include a statement on its mobile sports gaming system 24 providing information on gambling disorders and telephone numbers for resources and 25 entities providing assistance for gambling disorders. The licensee shall display the 26 statement in a manner and place conspicuous to a person gambling on the mobile 27 sports gaming system. 28 Sec. 05.18.060. Permissible forms of mobile sports gaming. (a) Permissible 29 forms of mobile sports gaming that may be conducted under a mobile sports gaming 30 license include single-game bets, teaser bets, parlays, over-under, money-line, pools, 31 exchange wagering, in-game wagering, in-play bets, proposition bets, and straight
01 bets. 02 (b) A mobile sports gaming license does not authorize a licensee to conduct 03 fantasy sports contests in which participants assemble teams of athletes or individuals 04 and the winning outcome may depend on the knowledge and skill of the participants 05 but is determined predominantly by the accumulated statistical results of the 06 performance of athletes or individuals participating in the sporting event. 07 Sec. 05.18.070. Wagers and excluded persons. (a) A licensee may accept 08 wagers on wagering events through the use of a mobile application, a digital platform, 09 or a person's sports gaming account. 10 (b) A licensee may accept and place layoff wagers by and with other licensees. 11 A licensee placing a layoff wager with another licensee shall inform the other licensee 12 that the wager is being placed by a licensee and disclose the licensee's identity. 13 (c) A person placing a wager must be 21 years of age or older and physically 14 located in the state or in a state, territory, or jurisdiction with which the commissioner 15 has entered into a mobile sports gaming agreement. 16 (d) The commissioner or a licensee may exclude a person from participating in 17 or operating mobile sports gaming. The commissioner shall keep a list of all excluded 18 persons and share the list with each licensee. 19 (e) A licensee, employee of a licensee, or family member of a licensee may 20 not place a wager on any wagering event through the mobile sports gaming system 21 under control of the licensee. 22 Sec. 05.18.080. Funding wagers. (a) A licensee may establish a sports gaming 23 account electronically through an approved mobile application or digital platform. 24 (b) A licensee shall permit a person to fund a sports gaming account using 25 (1) a credit or debit card in that person's name; 26 (2) bonuses or promotions; 27 (3) electronic bank transfers from a bank account in that person's 28 name; 29 (4) an online or mobile payment system that supports online money 30 transfers; 31 (5) any other means approved by the commissioner.
01 Sec. 05.18.090. Mobile sports gaming revenue tax. (a) Each calendar year, 02 there is levied a tax of 12 percent on the adjusted gross revenue received by a licensee 03 from mobile sports gaming authorized under this chapter. The provisions of AS 43.05 04 and AS 43.10 apply to the enforcement and collection of the tax. 05 (b) On or before the 15th day of each month, a licensee shall complete and 06 submit to the commissioner, by electronic means on a form prescribed by the 07 commissioner, a tax return for each preceding month that includes 08 (1) the gross revenue and adjusted gross revenue received from mobile 09 sports gaming authorized under this chapter for the preceding month; 10 (2) the tax due for which the licensee is liable; 11 (3) any additional information necessary for the computation and 12 collection of the tax on adjusted gross revenue under this section. 13 (c) The tax due as shown on the tax return filed under (b) of this section shall 14 be remitted by electronic means simultaneously with the filing of the return. 15 (d) If the winnings paid to a licensee's patrons exceed the licensee's gross 16 revenue for a month, the licensee may carry forward the negative amount for tax 17 returns filed in subsequent months for up to three years from the date of the negative 18 gross receipt. The negative amount of adjusted gross revenue may not be carried back 19 to an earlier month and tax revenue previously received by the commissioner may not 20 be refunded, unless the licensee surrenders its mobile sports gaming license and the 21 licensee's last return reported negative adjusted gross revenue. 22 (e) A licensee under AS 05.18.010 is exempt from taxes levied and collected 23 on gaming revenue by municipalities. 24 Sec. 05.18.100. Regulations. The commissioner shall adopt regulations under 25 AS 44.62 (Administrative Procedure Act) necessary to carry out this chapter. When 26 adopting regulations, the commissioner shall review regulations in other states where 27 mobile sports gaming is conducted and, where practicable, adopt similar regulations. 28 The regulations must include 29 (1) standards and procedures for the issuance, renewal, and revocation 30 of a mobile sports gaming license; 31 (2) the establishment of fees necessary to administer and enforce this
01 chapter; 02 (3) instructions for how wagers on a wagering event or series of 03 wagering events may be placed and accepted; 04 (4) a maximum wager limit on each type of wagering event; 05 (5) the method of accounting that a licensee must use; 06 (6) the types of records a licensee must keep; 07 (7) protections for patrons; 08 (8) promotion of social responsibility and responsible gaming; 09 (9) standards for the adoption of house rules by a licensee and the 10 approval of house rules; 11 (10) minimum design and security requirements for mobile 12 applications and digital platforms for the acceptance of wagers from digital 13 participants, including age verification, physical location in the state, and identity 14 requirements; 15 (11) minimum design, security, testing, and approval requirements for 16 mobile sports gaming systems; 17 (12) standards for involuntary placement on a list of persons who are 18 not authorized to wager on wagering events and procedures for voluntarily requesting 19 one's name to be included on the list or removed from the list; 20 (13) internal control standards for a licensee, including procedures for 21 safeguarding assets and revenues; recording of cash and indebtedness; maintenance of 22 reliable records, accounts and reports of transactions, and operations and events; 23 required audits; and the content of and frequency with which reports of mobile sports 24 gaming activities and revenues shall be made to the commissioner; and 25 (14) other matters the commissioner considers necessary to carry out 26 the purposes of this chapter and to protect the public interest. 27 Sec. 05.18.110. Violations of chapter; fraudulent acts. If a person violates 28 this chapter or engages in a fraudulent act, the commissioner may 29 (1) if the person is a licensee, suspend, revoke, or restrict the license of 30 the licensee; 31 (2) if the person is an employee of a licensee, require the suspension or
01 termination of the employee in order for the licensee to continue operations; 02 (3) impose for each violation of this chapter a penalty of not more than 03 $10,000. 04 Sec. 05.18.120. Authorized activities a privilege. The activities specified in 05 AS 05.18.010 may be permitted as a privilege and do not confer a right upon any 06 person to conduct the activities. 07 Sec. 05.18.190. Definitions. In this chapter, 08 (1) "adjusted gross revenue" means gross revenue from mobile sports 09 gaming authorized under this chapter, less prizes awarded; 10 (2) "commissioner" means the commissioner of revenue; 11 (3) "gross revenue" means the total amount of wagers received; 12 (4) "licensee" means a person licensed under this chapter; 13 (5) "mobile sports gaming" means the business of accepting wagers on 14 a wagering event, a portion of a wagering event, individual performance statistics of 15 an individual participating in a wagering event, or a combination of performance 16 statistics of individuals participating in a wagering event by a system or method of 17 wagering approved by the commissioner conducted on a mobile application or digital 18 platform that uses communication technology to accept wagers; 19 (6) "professional athletic event" means an event at which two or more 20 contestants participate in an athletic event and one or more contestants receive 21 compensation; 22 (7) "sports gaming account" means a financial account established by a 23 licensee for a patron in which the patron may deposit and withdraw funds for wagers 24 and other authorized purchases, and to which the licensee may credit winnings or 25 other amounts due to a patron; 26 (8) "wager" means a sum of money or thing of value risked on an 27 uncertain occurrence; 28 (9) "wagering event" includes a collegiate, amateur, or professional 29 athletic event, an international athletic event, motor vehicle race, electronic sporting 30 event, or other event permitted by the commissioner; "wagering event" does not 31 include an athletic event in which the majority of the participants are under 18 years of
01 age. 02 * Sec. 3. AS 11.66.280(3) is amended to read: 03 (3) "gambling" means that a person stakes or risks something of value 04 upon the outcome of a contest of chance or a future contingent event not under the 05 person's control or influence, upon an agreement or understanding that that person or 06 someone else will receive something of value in the event of a certain outcome; 07 "gambling" does not include 08 (A) bona fide business transactions valid under the law of 09 contracts for the purchase or sale at a future date of securities or commodities 10 and agreements to compensate for loss caused by the happening of chance, 11 including contracts of indemnity or guaranty and life, health, or accident 12 insurance; 13 (B) playing an amusement device that 14 (i) confers only an immediate right of replay not 15 exchangeable for something of value other than the privilege of 16 immediate replay and does not contain a method or device by which the 17 privilege of immediate replay may be cancelled or revoked; 18 (ii) confers only tickets, credits, allowances, tokens, or 19 anything of value that can be redeemed for toys, candy, or electronic 20 novelties offered at the same facility where the amusement device is 21 located; or 22 (iii) allows a player to manipulate a claw machine or 23 similar device within an enclosure and enables a person to receive 24 merchandise directly from the machine; 25 (C) an activity authorized by the Department of Revenue under 26 AS 05.15 or AS 05.18; or 27 (D) the permanent fund dividend raffle authorized under 28 AS 43.23.230; 29 * Sec. 4. AS 12.62.400(a) is amended by adding a new paragraph to read: 30 (21) licensure to operate mobile sports gaming under AS 05.18.010. 31 * Sec. 5. AS 43.35 is amended by adding a new section to read:
01 Sec. 43.35.250. Tax on fantasy sports. (a) Each calendar year, there is levied 02 a tax of 12 percent on the adjusted gross revenue received by an operator of fantasy 03 sports gaming activities in the state. The provisions of AS 43.05 and AS 43.10 apply 04 to the enforcement and collection of the tax. 05 (b) On or before the 15th day of each month, an operator shall complete and 06 submit to the commissioner, by electronic means on a form prescribed by the 07 commissioner, a tax return for each preceding month that includes 08 (1) the gross revenue and adjusted gross revenue received from fantasy 09 sports gaming activities for the preceding month; 10 (2) the tax due for which the licensee is liable; 11 (3) any additional information necessary for the computation and 12 collection of the tax on adjusted gross revenue under this section. 13 (c) The tax due as shown on the tax return filed under (b) of this section shall 14 be remitted by electronic means simultaneously with the filing of the return. 15 (d) In this section, 16 (1) "adjusted gross revenue" means gross revenue from fantasy sports 17 gaming activities, less prizes awarded; 18 (2) "commissioner" means the commissioner of revenue; 19 (3) "fantasy sports gaming" means fantasy sports contests in which 20 participants assemble teams of athletes or individuals and the winning outcome may 21 depend on the knowledge and skill of the participants but is determined predominantly 22 by the accumulated statistical results of the performance of athletes or individuals 23 participating in the sporting event; 24 (4) "gross revenue" means the total amount of wagers received. 25 * Sec. 6. AS 44.64.030(a)(2) is amended to read: 26 (2) AS 05.15 and AS 05.18 (charitable gaming; mobile sports 27 gaming); 28 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 TRANSITION: REGULATIONS. (a) The Department of Revenue may adopt 31 regulations necessary to implement the changes made by this Act. The regulations take effect
01 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 02 implemented by the regulation. 03 (b) If the Department of Revenue adopts regulations under this section after the 04 effective date of secs. 1 - 6 and 8 of this Act, the regulations may be imposed retroactively to 05 the effective date of secs. 1 - 6 and 8 of this Act. 06 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: START OF OPERATIONS. The Department of Revenue shall 09 announce to the general public, at least 14 days in advance, when licensees operating under 10 AS 05.18.010, enacted by sec. 2 of this Act, may commence operations. Operations may not 11 commence under this section until the commissioner issues a minimum of three licenses under 12 AS 05.18.010, enacted by sec. 2 of this Act. 13 * Sec. 9. Section 7 of this Act takes effect immediately under AS 01.10.070(c). 14 * Sec. 10. Except as provided in sec. 9 of this Act, this Act takes effect January 1, 2023.