A.R.S. tit. 5 ch. 11 — Arizona Revised Statutes Title 5 Chapter 11 — Event Wagering

5-1301. Definitions In this chapter, unless the context otherwise requires: 1. "Adjusted gross event wagering receipts" means an event wagering operator's gross wagering receipts, excluding voided bets, minus winnings paid to authorized participants and any federal excise tax. A deduction from adjusted gross event wagering receipts equal to the value of free bets or promotional credits redeemed by authorized participants may be taken as provided in this paragraph. The deduction under this paragraph for free bets or promotional credits is limited to the first five years following the effective date of this section as follows: (a) For years one and two, a deduction not to exceed twenty percent of an event wagering operator's gross wagering receipts. (b) For year three, a deduction not to exceed fifteen percent of an event wagering operator's gross wagering receipts. (c) For years four and five, a deduction not to exceed ten percent of an event wagering operator's gross wagering receipts. (d) For year six and each year thereafter, a deduction of free bets is not allowed. January 1 following the year in which the event wagering operator begins event wagering operations is considered the first year of event wagering for the purposes of this paragraph. An event wagering operator may deduct up to twenty percent of an event wagering operator's gross wagering receipts during any period that the operator conducts event wagering before January 1 of the first year of event wagering operations. 2. "Department" means the department of gaming. 3. "E-sport" means an organized, multiplayer video game competition, particularly between professional players, individually or as teams. 4. "Event wagering": (a) Means accepting wagers on sports events or other events, portions of sports events or other events, the individual performance statistics of athletes in a sports event or combination of sports events or the individual performance of individuals in other events or a combination of other events by any system or method of wagering, including in person or over the Internet through websites and on mobile devices. (b) Does not include a fantasy sports contest as defined in section 5-1201. 5. "Event wagering employee" means an employee of an event wagering operator, sports facility, management services provider or limited event wagering operator who is directly involved in the management or control of the conduct of event wagering under this chapter in this state. 6. "Event wagering facility" means a facility at which event wagering is conducted under this chapter. 7. "Event wagering operator" means either: (a) An owner or operator of an Arizona professional sports team or franchise, an operator of a sports facility in this state that hosts an annual tournament on the PGA tour or a promoter of a national association for stock car auto racing national touring race in this state, or the designee of such an owner, operator or promoter, who is licensed to offer event wagering under this chapter. If an owner, operator or promoter that qualified for an event wagering operator license appoints a designee, the designee will be considered the event wagering operator and the licensee with respect to the applicable license for the purposes of this chapter. (b) An Arizona Indian tribe or an entity fully owned by an Arizona Indian tribe, or its designee, licensed to operate only mobile event wagering outside the boundaries of its Indian lands and throughout this state if it has signed the most recent tribal-state gaming compact and any applicable appendices or amendments. If an Indian tribe that qualified for an event wagering operator license appoints a designee, the designee will be considered the event wagering operator and the licensee with respect to the applicable license for the purposes of this chapter. 8. "Limited event wagering operator" means a racetrack enclosure or additional wagering facility that holds a permit issued by the division of racing to offer wagers on horseracing and that is licensed under this chapter. 9. "Official league data" means statistics, results, outcomes and other data related to a sports event or other event obtained pursuant to an agreement with the relevant sports governing body or an entity expressly authorized by the sports governing body to provide such information to licensees that authorizes the use of such data for determining the outcome of sports wagers on sports events or other events. 10. "Licensee" means a person that holds an event wagering operator license, limited event wagering license, supplier license or management services provider license. 11. "Management services provider" means a person that operates, manages or controls event wagering authorized by this chapter on behalf of an event wagering operator or limited event wagering operator, including developing or operating event wagering platforms and providing odds, lines and global risk management, and may provide services to more than one licensed event wagering operator or licensed limited event wagering operator. 12. "Other event" means a competition of relative skill or an event authorized by the department under this chapter. 13. "Person" means an individual, partnership, committee, association, corporation, Indian tribe or an entity fully owned by an Indian tribe, or any other organization or group of persons. 14. "Professional sport" means a sport conducted at the highest level league or organizational play for its respective sport and includes baseball, basketball, football, golf, hockey, soccer and motorsports. 15. "Prohibited conduct" includes any statement, action or other communication intended to unlawfully influence, manipulate or control a betting outcome of a sports event or other event of any individual occurrence or performance in a sports event or other event in exchange for financial gain or to avoid financial or physical harm. 16. "Prohibited participant" means: (a) Any individual whose participation may undermine the integrity of the wagering, the sports event or the other event. (b) Any individual who is prohibited from placing a wager as an agent, proxy or because of self-exclusion. (c) Any individual who is an athlete, coach, referee, player, trainer or personnel of a sports organization in any sports event or other event overseen by that individual's sports organization who, based on information that is not publicly available, has the ability to determine or to unlawfully influence the outcome of a wager. (d) An individual who holds a position of authority or influence sufficient to exert influence over the participants in a sporting contest, including coaches, managers, handlers and athletic trainers, such that their actions can affect the outcome of a wager. (e) An individual with access to exclusive information on any sports event or other event overseen by that individual's sports governing body that is not publicly available information or any individual identified by any lists provided by the sports governing body to the department. 17. "Sports event" means a professional sport or athletic event, a collegiate sport or athletic event, a motor race event, an e-sport event or an olympic event. 18. "Sports facility" means a facility that is owned by a commercial, state or local government or quasi-governmental entity that hosts professional sports events and that holds a seating capacity of more than ten thousand persons at its primary facility, one location in this state that hosts an annual golf tournament on the PGA tour and one location that holds an outdoor motorsports facility that hosts a national association for stock car auto racing national touring race. 19. "Sports governing body" means an organization headquartered in the United States that prescribes final rules and enforces codes of conduct with respect to a sports event and participants in a sports event. 20. "Tier one sports wager" means a sports wager that is determined solely by the final score or final outcome of the sports event and that is placed before the sports event has begun. 21. "Tier two sports wager" means a sports wager that is not a tier one sports wager. 22. "Supplier" means a person that manufactures, distributes or supplies event wagering equipment or software, including event wagering systems. 23. "Wager": (a) Means a sum of money or thing of value risked on an uncertain occurrence. (b) Includes tier one and tier two sports wagers, single-game bets, teaser bets, parlays, over-under bets, moneyline bets, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, straight bets and other wagers approved by the department. 5-1302. Department of gaming; powers; duties A. The department shall enforce this chapter and supervise compliance with laws and rules relating to regulating and controlling event wagering in this state. B. The department may adopt rules in accordance with this chapter and title 41, chapter 6. C. The department shall evaluate all applicants to determine suitability for issuing all event wagering operator licenses, limited event wagering operator licenses, supplier licenses and management services provider licenses and license renewals and shall charge and collect all fees pursuant to this chapter. D. The department may deny, revoke or suspend licenses or renewals or deny an applicant's request to withdraw a license application. E. The department shall conduct background checks of event wagering operators, limited event wagering operators, management services providers and event wagering suppliers and may monitor and conduct periodic audits of event wagering operations and providers. F. Hearings shall be conducted pursuant to title 41, chapter 6, article 10. Except as provided in section 41-1092.08, subsection H, any party aggrieved by a final order or decision of the department may seek judicial review pursuant to title 12, chapter 7, article 6. G. The department shall oversee event wagering and develop standards and procedures and engage in other duties as the director of the department prescribes to further the purposes of this chapter, including establishing and enforcing standards and procedures for: 1. Collecting, depositing and disbursing all applicable license fees and payments as required by this chapter. 2. Operating event wagering and maintaining, testing, inspecting, approving and auditing event wagering accounts, platforms, hardware, software and data, including player, financial, accounting and wagering data. 3. Operating event wagering facilities, including location, security and surveillance, departmental access, inspections and approvals. 4. Licensing and requirements for the use of geolocation services to reasonably ensure persons engaging in event wagering are located in this state or another departmentally authorized location allowed by this chapter at the time of event wagering. 5. Approving other events on which wagers may be taken consistent with this chapter. 6. Establishing mechanisms designed to detect and prevent the unauthorized use of player accounts and to detect and prevent fraud, money laundering and collusion, including a requirement that event wagering operations contract with a departmentally licensed integrity monitoring provider. 7. Paying winning wagers, reporting taxes and collecting debt setoffs from a payout of winnings that triggers the licensee's obligation to file a form W-2G or a substantially equivalent form with the United States internal revenue service, including overdue child support payments, state tax debt and debts as established by the department of economic security. H. The department may adopt rules authorizing event wagering operators to offset loss and manage risk, directly or with a third party approved by the department, through the use of a liquidity pool in this state or another jurisdiction, if the event wagering operator or its management services provider is licensed by such jurisdiction to operate an event wagering or sports betting business. An event wagering operator's use of a liquidity pool does not eliminate its duty to ensure that it has sufficient monies available to pay bettors. 5-1303. Event wagering; license required; exception A. Event wagering may be conducted only to the extent that it is conducted in accordance with this chapter. A person may not offer any activity in connection with event wagering in this state unless all necessary licenses have been obtained in accordance with federal and state law and any applicable rules of the department. B. A wager placed by a participant in this state and received by an event wagering operator or its management services provider in this state is considered to be gambling or gaming that is conducted in this state. C. A law that is inconsistent with this chapter does not apply to event wagering as provided for by this chapter. D. This chapter does not apply to event wagering conducted exclusively on Indian lands as that term is defined in the Indian gaming regulatory act (P.L. 100-497; 102 Stat. 2467) by an Indian tribe operated in accordance with a tribal-state gaming compact and any amendments. For purposes of this chapter, event wagering is conducted exclusively on Indian lands only if the individual who places the wager is physically present on Indian lands when the wager is initiated, received or otherwise made on equipment that is physically located on Indian lands, and the wager is initiated, received or otherwise made in conformity with the safe harbor requirements as provided in 31 United States Code section 5362(10)(c). An event wagering operator may not accept any wager if the individual who places the wager is physically present on Indian lands when the wager is initiated. E. A person may not provide or make available event wagering devices in a place of public accommodation in this state, including a club or other association, to enable individuals to place wagers except as provided by this chapter. This subsection does not apply to an event wagering operator aggregating, providing or making available event wagering devices within its own event wagering facility. F. For purposes of this chapter, the intermediate routing of electronic data in connection with event wagering, including routing across state lines, does not determine the location or locations in which the wager is initiated, received or otherwise made. G. An event wagering operator may use more than one event wagering platform to offer, conduct or operate event wagering. Only an event wagering operator or its management services provider may process, accept, offer or solicit wagers. The event wagering operator must clearly display its own brand or that of an affiliate on the event wagering platform that it uses. The event wagering operator, in its sole discretion, may also elect to have the brand of the management services provider that it uses be the name and logos of the event wagering platform provider if the event wagering platform also clearly displays the event wagering operator's own trademarks and logos or those of an affiliate. H. An owner, operator, promoter or Indian tribe that qualifies for an event wagering operator license and appoints a designee to be licensed as an event wagering operator is not responsible for the conduct of its designee. 5-1304. Licensure; application A. The department may issue not more than ten event wagering operator licenses to applicants other than an Indian tribe. The department may issue not more than ten event wagering operator licenses to Indian tribes in this state if the Indian tribe receiving a license has signed the most recent tribal-state gaming compact and any applicable appendices or amendments. The department shall issue event wagering operator licenses only to applicants that are either of the following in compliance with this chapter: 1. An owner of an Arizona professional sports team or franchise, operator of a sports facility that hosts an annual tournament on the PGA tour, promoter of a national association for stock car auto racing national touring race conducted in this state or the owner's, operator's or promoter's designee, contracted to operate event wagering for both retail event wagering at a sports facility or its complex as prescribed in subsection D of this section and mobile event wagering throughout the state. If a designee is used, the designee shall be considered the applicant and be subject to any requirements of the application process rather than the owner, operator or promoter. 2. An Indian tribe, or an entity fully owned by an Indian tribe, or its designee contracted to operate only mobile event wagering outside the boundaries of its Indian lands and throughout the state if it has signed the most recent tribal-state gaming compact and any applicable appendices or amendments. B. An applicant for an event wagering license shall submit an application in a form prescribed by the department, including all of the following: 1. The identification of the applicant's principal owners that own more than five percent of the company, the partners, the members of its board of directors and the officers, the identification of any holding company, including its principals, that is engaged by the applicant to assist in the management or operation of event wagering, if applicable, and information to verify that the applicant is qualified to hold a license under subsection A of this section. 2. A full set of fingerprints for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. The fingerprints shall be furnished by the applicant's officers and directors, if a corporation, members, if a limited liability company, and partners, if a partnership. An applicant convicted of a disqualifying offense may not be licensed. 3. A notice and description of civil judgments obtained against the applicant pertaining to antitrust or security regulation laws of the federal government, of this state or of any other state, jurisdiction, province or country. 4. If the applicant has conducted gaming operations in a jurisdiction that allows such activity, letters of compliance from the regulatory body that regulates event wagering, sports wagering or any other gaming activity that the applicant is licensed for, conducts or operates under jurisdiction of the regulatory body. 5. Information, documentation and assurances concerning financial background and resources of the applicant or its management services provider as may be required to establish by clear and convincing evidence the financial stability and responsibility of the applicant or its management services provider, including bank references, business and personal income and disbursement schedules, tax returns and other reports filed with governmental agencies, and business and personal accounting and check records and ledgers. Each applicant or its management services provider, in writing, shall authorize the examination of all bank accounts and records as may be deemed necessary by the department. The department may consider any relevant evidence of financial stability. The applicant is presumed to be financially stable if the applicant or its management services provider establishes by clear and convincing evidence that it meets each of the following standards: (a) The ability to ensure the financial integrity of event wagering operations by maintaining a bankroll or equivalent provisions adequate to pay winning wagers to bettors when due. An applicant is presumed to have met this standard if the applicant or its management services provider maintains, on a daily basis, a bankroll or equivalent provisions in an amount that is at least equal to the average daily minimum bankroll or equivalent provisions, calculated on a monthly basis, for the corresponding month in the previous year. (b) The ability to meet ongoing operating expenses that are essential to maintaining continuous and stable event wagering operations. (c) The ability to pay, as and when due, all state and federal taxes. 6. Information to establish by clear and convincing evidence that the applicant or its management services provider has sufficient business ability and gaming experience as to establish the likelihood of creating and maintaining a successful and stable event wagering operation. 7. Information regarding the financial standing of the applicant, including each person or entity that has provided loans or financing to the applicant or its management services provider. 8. Information on the amount of adjusted gross event wagering receipts and associated adjusted gross receipts that the applicant expects to generate. 9. A nonrefundable application fee or annual licensing fee as prescribed by section 5-1310. 10. Any additional information required by the department to determine the financial and operational ability to fulfill its obligations as an event wagering operator. C. Any applicant for licensure agrees to be subject to state jurisdiction to the extent necessary to determine the applicant's qualification to hold a license, including all necessary administrative procedures, hearings and appeals as provided in title 41, chapter 6 and department rules. D. A license issued by the department pursuant to this section authorizes an event wagering operator identified in subsection A, paragraph 2 of this section to operate only mobile event wagering or an event wagering operator identified in subsection A, paragraph 1 of this section to offer both: 1. Event wagering in this state through an event wagering facility within a five-block radius of the event wagering operator's sports facility or, in the case of a designee, the sports facility or the designating owner, operator or promoter of a professional sports team, event or franchise. An event wagering facility within one mile of a tribal gaming facility must be: (a) Within a sports complex that includes retail centers that are adjacent to the sports facility. (b) Not more than one-fourth of a mile from a sports facility within the sports complex. 2. Event wagering through a mobile platform as specified by the department. A licensed event wagering operator or its designated management services provider may offer event wagering through an event wagering platform as specified by the department. E. A license issued under this section is valid for five years if the licensee submits an annual license fee, maintains the qualifications to obtain a license under this section and substantially complies with this chapter and other laws and rules relating to event wagering. A licensee may renew its license by submitting an application in a form prescribed by department rule and the application fee. A license may not be renewed if it is determined by the department that the event wagering operator has not substantially complied with this chapter or any other law regulating its event wagering operations or other operations licensed by the department. A licensee shall submit the nonrefundable annual license and application fees prescribed in section 5-1310 with its application for the renewal of its license. F. A person may not apply for or obtain more than one event wagering operator license. A management services provider may offer services to more than one event wagering operator. 5-1305. License review; approval; fees; material change; exemption; display; transferability A. On receipt of a completed application and the required fee, the department shall conduct the necessary background investigation to ensure the applicant is qualified for licensure. On completion of the necessary background investigation, the department shall either issue a license or deny the application. If the application is denied, the department shall forward a statement setting forth the grounds for denial to the applicant together with all other documents on which the department relied, to the extent allowed by law. B. The department may conduct additional background investigations of any person required to be licensed at any time while the license remains valid. The issuance of a license does not create or imply a right of employment or continued employment. The event wagering operator or limited event wagering operator may not employ and, if already employed, shall terminate an event wagering employee if it is determined that the person meets any of the following criteria: 1. Has been convicted of any gaming offense. 2. Has been convicted of a felony in the seven years before submitting an application unless that felony has been set aside. 3. Has ever been convicted of a felony related to extortion, burglary, larceny, bribery, embezzlement, robbery, racketeering, money laundering, forgery, fraud, murder, voluntary manslaughter, a sexual offense that requires the individual to register pursuant to section 13-3821 or kidnapping. 4. Knowingly and wilfully provides materially important false statements or information or omits materially important information on the person's employment application or background questionnaire. 5. Is a person whose prior activities, criminal record, if any, or reputation, habits and associations pose a threat to the public interest or to the effective regulation and control of gaming or create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of gaming or the carrying on of the business and financial arrangements incidental thereto. C. Not later than sixty days after the department receives a complete application, the department shall issue a license to the applicant unless the background investigation the department conducts discloses that the applicant has a criminal history or unless other grounds sufficient to disqualify the applicant are apparent on the face of the application. If more than ten applications are received for a particular license type, the department shall adopt a process for ensuring an equal opportunity for all qualified applicants to obtain a license. The department shall review and approve or deny an application for a license as provided in title 41, chapter 6, article 10. D. For each application for licensure or renewal of a license that is approved under this section, the amount of the application fee must be credited toward the licensee's license fee and the licensee shall remit the balance of the initial license fee to the department on approval of a license. The fees collected from licensees under this section shall be deposited in the event wagering fund established by section 5-1318 and used by the department to pay the actual operating and administrative expenses incurred for event wagering. E. Each person licensed under this chapter shall give the department written notice within thirty days after a material change is made to information provided in the licensee's application for a license or renewal. F. Indian tribes within this state operating event wagering exclusively on Indian lands are exempt from the licensure requirements of this section. Event wagering on Indian lands is governed by the tribal-state gaming compact, its appendices, any amendments and the Indian gaming regulatory act (P.L. 100-497; 102 Stat. 2467). G. Each licensee shall display its license conspicuously in the licensee's place of business or have the license available for inspection by an agent of the department or a law enforcement agency. Each licensee that operates an event wagering platform shall conspicuously display a notice of the license on its platform's landing page. H. The department shall keep all information, records, interviews, reports, statements, memoranda or other data supplied to or used by the department in the course of its review or investigation of an application for an event wagering operator license or renewal of a license confidential. The materials described in this subsection are exempt from disclosure pursuant to title 39, chapter 1, article 2. I. A license issued under this chapter may not be transferred to another person or entity without prior approval of the department. The department shall work with applicants and licensees to ensure there is no gap in the validity of the license. 5-1306. License revocation; suspension; denial; grounds; definitions A. The department may revoke, suspend or deny a license when an applicant or licensee meets any of the following criteria: 1. Violates, fails or refuses to comply with the provisions, requirements, conditions, limitations or duties imposed by this chapter and other laws and rules, or if any such violation has occurred on any event wagering system operated by any such person or over which the person has substantial control. 2. Knowingly causes, aids, abets or conspires with another to cause any person to violate any of the laws of this state or the rules of the department. 3. Obtains a license by fraud, misrepresentation, concealment or through inadvertence or mistake. 4. Is convicted or forfeited bond on a charge of or pleads guilty to: (a) Forgery, larceny, extortion or conspiracy to defraud. (b) Wilful failure to make required payment or reports to any tribal, state or federal governmental agency, filing false reports with any tribal, state or federal governmental agency or any similar offense or offenses. (c) Bribing or otherwise unlawfully influencing a public official of this state or any other state or jurisdiction. (d) Any crime, whether a felony or misdemeanor, involving any gaming activity, physical harm to an individual or moral turpitude. 5. Misrepresents or fails to disclose a material fact to the department. 6. Fails to prove, by clear and convincing evidence, that the person is qualified for licensure. 7. Is subject to current prosecution or pending charges or a conviction that is under appeal for any of the offenses included in this subsection. At the request of an applicant for an original license, the department may defer decision on the application during the pendency of the prosecution or appeal. 8. Has had a gaming license issued by any jurisdiction in the United States revoked or denied. 9. Demonstrates a wilful disregard for compliance with gaming regulatory authority in any jurisdiction, including suspension, revocation or denial of an application for a license or forfeiture of a license. 10. Has pursued or is pursuing economic gain in an occupational manner or context in violation of the criminal laws of any state if the pursuit creates probable cause to believe that the person's participation in gaming or related activities would be detrimental to the proper operation of an authorized gaming or related activity in this state. 11. Is a career offender or a member of a career offender organization or an associate of a career offender or career offender organization thereby establishing probable cause to believe that the association is of such a nature as to be detrimental to the proper operation of the authorized gaming or related activities in this state. 12. Is a person whose prior activities, criminal record, if any, habits and associations pose a threat to the public interest of this state or to the effective regulation and control of event wagering, creates or enhances the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of event wagering or the carrying on of the business and financial arrangements incidental thereto. 13. Fails to provide any information requested by the department within seven days after the request for the information, except for good cause as determined by the department. B. Any applicant for licensure or holder of a license shall be entitled to a full hearing on any final action by the department that may result in the revocation, suspension or denial of licensure. The hearing shall be conducted in accordance with the procedures as provided in title 41, chapter 6 and the department's rules. C. The department may summarily suspend any license if the continued licensing of the person constitutes an immediate threat to the public health, safety or welfare. D. For the purposes of this section: 1. "Career offender" means any individual who behaves in an occupational manner or context for the purposes of economic gain by violating federal law or the laws and public policy of this state. 2. "Career offender organization" means any group of individuals who operate together as career offenders. 3. "Occupational manner or context" means the systematic planning, administration, management or execution of an activity for financial gain. 5-1307. Limited event wagering operator licenses; definition A. An event wagering operator may partner with a racetrack enclosure or additional wagering facility that holds a permit that is issued by the division of racing to obtain a limited event wagering license for event wagering only at one specific physical location. On application, the department may issue a total of up to ten limited event wagering licenses to authorize event wagering at ten specific physical locations. B. An entity seeking a limited event wagering license shall provide the following information to the department in its application: 1. A copy of its current approval by the division of racing to conduct racing meetings or approval as an additional wagering facility. 2. A letter from an event wagering operator of its partnership for the purposes of event wagering. 3. An attestation and map demonstrating that the specific physical location of the event wagering facility is located at least five miles from: (a) A tribal gaming facility. (b) The specific event wagering facility location operated by an event wagering operator. (c) The specific event wagering facility location operated by another limited event wagering operator. C. The department shall issue a limited event wagering license if the following conditions are met: 1. The applicant is in compliance with all division of racing rules regarding its racing or additional wagering facility operations. 2. The applicant has a current license with the division of racing. 3. The applicant is not currently the subject of an investigation by the division of racing for a violation of division rules. 4. The applicant submits fees as required by the department. D. A limited event wagering license allows the licensee to conduct event wagering only in accordance with this chapter and any applicable rules adopted by the department. E. A limited event wagering operator shall be licensed by the department before the commencement of operation and every two years thereafter. The license shall include each principal, the primary management official and key employees. F. The department shall deposit, pursuant to sections 35-146 and 35-147, the fees collected from licenses under this section in the event wagering fund established by section 5-1318. G. For the purposes of this section, "additional wagering facility" has the same meaning prescribed in section 5-101. 5-1308. Supplier license A. The department may issue a supplier license to a person that manufactures, distributes, sells or leases event wagering equipment, systems or other gaming items to conduct event wagering and offers services related to the equipment or other gaming items and data to an event wagering operator or limited event wagering operator while the license is active. The department may accept a license issued by another jurisdiction that the department determines to have similar licensure requirements as evidence the applicant meets supplier licensure requirements. B. The department may adopt rules that establish additional requirements for a supplier and any system or other equipment used for event wagering. C. An applicant for a supplier license shall demonstrate that the equipment, system or services that the applicant plans to offer to the event wagering operator conform to standards established by the department and applicable state law. The department may accept approval by another jurisdiction that the department determines has similar equipment standards as evidence the applicant meets the standards established by the department and applicable state law. D. An applicant shall pay to the department a nonrefundable license and application fee as prescribed by section 5-1310. A license is valid for two years. The department shall grant a renewal of a supplier license if the renewal applicant has continued to comply with all applicable statutory and regulatory requirements, submits the renewal application on a department-issued renewal form and pays the renewal fee prescribed by section 5-1310. The department shall deposit, pursuant to sections 35-146 and 35-147, the fees collected from licensees under this subsection in the event wagering fund established by section 5-1318. E. A supplier shall submit to the department a list of all event wagering equipment and services sold, delivered or offered to an event wagering operator in this state, as required by the department, all of which must be tested and approved by an independent testing laboratory approved by the department. An event wagering operator or limited event wagering operator may continue to use supplies acquired from a licensed supplier, even if a supplier's license expires or is otherwise canceled, unless the department finds a defect in the supplies. 5-1309. Management services provider license A. An event wagering operator may contract with an entity to conduct event wagering in accordance with the rules of the department and this chapter. The entity shall obtain a license from the department as a management services provider pursuant to this chapter and any rules adopted by the department before the execution of any such contract. A management services provider may provide services to more than one event wagering operator or limited event wagering operator under its license. B. Each applicant for a management services provider license shall meet all requirements for licensure and pay a nonrefundable license and application fee as prescribed by section 5-1310. The department may adopt rules establishing additional requirements for a management services provider. The department may accept a license issued by another jurisdiction that the department determines to have similar licensure requirements as evidence the applicant meets management services provider licensure requirements. The department shall deposit, pursuant to sections 35-146 and 35-147, the fees collected from licensees under this subsection in the event wagering fund established by section 5-1318. C. Management services provider licenses shall be renewed every two years to licensees who continue to be in compliance with all requirements and who pay the renewal fee. 5-1310. License fees; bond A. The department shall establish and collect fees for applications, initial licenses and renewals of the following: 1. Event wagering operator licenses. 2. Limited event wagering operator licenses. 3. Management services provider licenses. 4. Supplier licenses. B. If actual costs incurred by the department to investigate the background of an applicant exceed the fees pursuant to subsection A of this section, those costs may be assessed to the applicant during the investigation process. Payment in full to the department shall be required before the department issues a license. The department may require event wagering operators, limited event wagering operators and suppliers applying for licensure to post a bond sufficient to cover the actual costs that the department anticipates will be incurred in conducting a background investigation of the applicant. 5-1311. License restrictions; prohibited licensees; violation; classification A. The following persons or their immediate family members may not apply for or obtain a license under this chapter: 1. An employee of the department. 2. An employee of any professional sports team. 3. A coach of or player for a collegiate, professional or olympic sports team or sport. 4. An individual who has been convicted of a crime related to sports or event wagering on a sports event or other event, cheating, extortion, burglary, larceny, bribery, embezzlement, robbery, racketeering, money laundering, forgery or fraud. 5. An individual who has the ability to directly affect the outcome of a sports event or other event for which wagers are allowed. 6. Any other category of individuals that, if licensed, would negatively affect the integrity of event wagering in this state. B. A licensee may not: 1. Allow a person under twenty-one years of age to place a wager. 2. Offer, accept or extend credit to a bettor. 3. Target minors in advertising or promotions. 4. Offer or accept a wager on any event, outcome or occurrence, including a high school sports event offered, sponsored or played in connection with a public or private institution that offers education at the secondary level, other than a sports event or other event. 5. Accept a wager from a person who is on the department's list of self-excluded persons created and maintained by an Indian tribe or the department. 6. Accept a wager from a prohibited participant. C. A violation of this section is: 1. For a first offense, a class 3 misdemeanor. 2. For a second or subsequent offense, a class 1 misdemeanor. 5-1312. Reporting A. On or before September 30 of each year, the department shall prepare and submit an annual report to the governor, the president of the senate and the speaker of the house of representatives, and shall provide a copy to the secretary of state that contains the following information: 1. The number of active licensees by type. 2. The aggregate gross and net revenue of all licensees. 3. The number of investigations conducted to enforce this chapter. 4. The financial impact on this state of the event wagering industry in this state. B. The report may be included with other information required to be submitted by the department annually. A report submitted under subsection A of this section may be submitted electronically. C. The report required pursuant to subsection A of this section must include a statement that indicates the number of independent audit results that are required to be submitted by licensed event wagering operators and management services providers pursuant to section 5-1319 and that were received by the department and must include any corrective actions taken by the department regarding overpayment or underpayment of privilege fees. 5-1313. Escrow account; insurance; cash-on-hand; financial practices; audit; post-employment restrictions A. The department shall establish: 1. The amount of a bond in escrow and the amount of cash that must be kept on hand to ensure that adequate reserves exist for payouts. 2. Any insurance requirements for a licensee. 3. Minimum requirements by which each licensee must exercise effective control over its internal fiscal affairs, including requirements for all of the following: (a) Safeguarding assets and revenues, including evidence of indebtedness. (b) Maintaining reliable records relating to accounts, transactions, profits and losses, operations and events. (c) Risk management. 4. Requirements for internal and independent audits of licensees. 5. The manner in which periodic financial reports must be submitted to the department from each licensee, including the financial information to be included in the reports. 6. The type of information deemed confidential financial or proprietary information that is not subject to any reporting requirements under this subsection. 7. Policies, procedures and processes designed to mitigate the risk of fraud, cheating or money laundering. 8. Any post-employment restrictions for department employees necessary to maintain the integrity of event wagering in this state. B. The licensee may maintain the bond at any bank lawfully operating in this state or another entity as approved by the department, and the licensee must be the beneficiary of any interest accrued on the bond. 5-1314. Event wagering authorized A. Notwithstanding any other law relating to wagering except for title 5, chapter 1 and title 13, chapter 33, the operation of event wagering is lawful only if the event wagering is conducted in accordance with this chapter and any other relevant laws and rules. B. Notwithstanding section 5-112, wagers on racing meetings or simulcasted races may be made, offered or received through the means that other wagers allowed by this chapter are made, offered or received unless otherwise prohibited by federal law. C. Each event wagering operator shall adopt and adhere to a written, comprehensive policy outlining the house rules governing the acceptance of wagers and payouts. The policy and rules must be approved by the department before the event wagering operator accepts wagers. The policy and rules must be readily available to a bettor at any event wagering facility location and on any event wagering platform. D. The department shall adopt rules regarding: 1. The manner in which an event wagering operator accepts wagers from and issues payouts to bettors, including payouts in excess of $10,000. 2. Reporting requirements necessary to comply with the bank secrecy act (P.L. 91-508; 84 Stat. 1114) and patriot act (P.L. 107-56; 115 Stat. 272) and for any other applicable laws and rules governing reporting suspicious wagers. E. Each wager placed in accordance with this chapter is deemed to be an enforceable contract under law. F. If the governing body of a sport or sports league, organization or association or other authorized entity that maintains official league data opts to provide official league data for the purposes of event wagering, an event wagering operator shall exclusively use official league data for purposes of tier two sports wagers unless the event wagering operator can demonstrate to the department that the governing body of a sport or sports league, organization or association or other authorized entity cannot provide a feed of official league data for tier two sports wagers in accordance with commercially reasonable terms, as determined by the department. 5-1315. Prohibited wagers A. A person may not wager on any of the following: 1. Injuries, penalties and other types or forms of event wagering under this chapter that are contrary to law. 2. Individual actions, events, occurrences or nonoccurrences to be determined during a collegiate sports event, including on the performance or nonperformance of a team or individual participant during a collegiate sports event. This paragraph does not prohibit wagers on the overall outcome of a collegiate sports event or seasonal awards based on a player's cumulative overall play. B. An event wagering operator may offer only parlay and proposition bets of the type or category as prescribed by the department. The department shall prescribe the types and categories of parlay and proposition bets that may be offered in this state, if any. C. An event wagering operator, professional sports team, league, association or institution of higher education may submit to the department in writing a request to prohibit a type or form of event wagering, or to prohibit a category of persons from event wagering, if the event wagering operator, team, league, association or institution believes that such event wagering by type, form or category is contrary to public policy, unfair to consumers or affects the integrity or perceived integrity of a particular sport or the sports betting industry. Such a request shall provide a reasonable amount of time for the department to conduct due diligence before decision-making, absent the need to proceed on an emergency basis. D. The department shall review a request made pursuant to subsection C of this section to determine if good cause exists to grant the request. In making a determination under this section, the department shall seek input from licensees unless the emergency nature of the matter does not provide sufficient time for such due diligence. The department shall respond to the request concerning a particular event before the start of the event, or if it is not feasible to respond before the start of the event, as soon as practicable. 5-1316. Integrity; reporting prohibited or suspicious conduct; investigations A. All licensees under this chapter shall immediately report to the department and the relevant sports governing body that has requested to receive it any information relating to any of the following: 1. Abnormal betting activity or patterns that may indicate a concern with the integrity of a sports event or events, or any other conduct that corrupts a betting outcome of a sports event or events for purposes of financial gain, including match fixing. 2. Any potential breach of a sports governing body's internal rules and codes of conduct pertaining to event wagering. 3. Conduct that corrupts the betting outcome of event wagering for purposes of financial gain, including match fixing. 4. Suspicious or illegal event wagering activities, including cheating, the use of monies derived from illegal activity, wagers to conceal or launder monies derived from illegal activity, using agents to place wagers or using false identification. B. Licensees shall report to the department, in real time and at the account level, information regarding a bettor, the amount and type of bet, the time the bet was placed, the location of the bet, including the internet protocol address if applicable, the outcome of the bet and records related to subsection A of this section. Information reported under this subsection must be submitted in the form and manner established by the department. C. If a sports governing body has notified the department that real-time information sharing for wagers placed on its sports events is necessary and desirable, licensees shall share the same information with the sports governing body or its designee with respect to wagers on its sports events. Such information may be provided in anonymized form and may be used by a sports governing body solely for integrity purposes. D. The department and licensees shall make commercially reasonable efforts to cooperate with investigations conducted by sports governing bodies, including using commercially reasonable efforts to provide or facilitate the provision of betting information for the purposes of investigations. E. The department shall establish a hotline or other method of communication that allows any person to confidentially report to the department information about prohibited conduct. F. The department shall investigate allegations and refer to prosecutorial entities prohibited conduct under this chapter. G. The identity of any reporting person shall remain confidential unless that person authorizes disclosure of the person's identity or until such time as the allegation of prohibited conduct is referred to a prosecutorial entity. H. If the department receives a complaint of prohibited conduct by an athlete, the department shall notify the appropriate sports governing body to review the complaint for appropriate action. I. Notwithstanding any confidentiality provisions of this chapter, the department may provide or facilitate access to information regarding account-level betting information and data files relating to persons placing wagers on notification by a sports governing body of an official investigation being conducted into a person or persons who are prohibited by that body from participating in wagering or who are believed to have taken action that affects the integrity or perceived integrity of the sport it governs. Any information obtained by a sports governing body shall be kept confidential unless the information has been made public through a criminal proceeding or by a court order. 5-1317. Sports governing body agreements This chapter does not prohibit a sports governing body on whose events the department has authorized wagering from entering into agreements with licensees in which the sports governing body may share in the amount bet from sports wagering on the events of the sports governing body. A sports governing body is not required to obtain a license or any other approval from the department to lawfully accept such amounts. 5-1318. Fees; event wagering fund; subaccount A. The department shall establish a fee for the privilege of operating event wagering. In determining the fee, the department shall consider the highest percentage of revenue share that an Indian tribe pays to this state pursuant to the tribal-state gaming compact. The fee may not exceed ten percent of the event wagering operator's adjusted gross event wagering receipts. The event wagering operator or designee has the option to choose either the cash accrual or modified accrual basis method of accounting for purposes of calculating the amount of the fee owed by the event wagering operator or designee. The fees required pursuant to this section are due and payable to the department not later than the twenty-fifth day of the month following the calendar month in which the adjusted gross event wagering receipts were received and the obligation was accrued. B. The event wagering fund is established consisting of monies deposited pursuant to this chapter, monies deposited pursuant to section 5-1211 or monies from any other source. The department shall administer the fund. Except as otherwise provided in this chapter, the department shall deposit, pursuant to sections 35-146 and 35-147, all monies collected under this chapter in the event wagering fund. On or before the twenty-fifth of each month, ninety percent of the monies deposited in the event wagering fund from the previous month shall be transferred to the state general fund. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. C. The unarmed combat subaccount of the event wagering fund is established consisting of monies received from license fees collected pursuant to section 5-230 and from any other source. The department shall administer the subaccount. At the end of each month the director of the department shall report to the department of administration the total amount received pursuant to this subsection and shall deposit that amount, pursuant to sections 35-146 and 35-147, in the unarmed combat subaccount. The department may transfer monies the department spends on the annual costs to regulate and enforce this chapter pursuant to subsection D of this section from the event wagering fund into the unarmed combat subaccount. D. Unless otherwise determined by the legislature, the department may spend not more than ten percent of monies on the department's annual costs of regulating and enforcing this chapter and chapter 10 of this title. Of the ten percent, the department may spend up to $500,000 each fiscal year to support problem gambling programs. E. The department may use monies designated for problem gambling programs pursuant to subsection D of this section and any other monies designated for problem gambling, including private donations, grants or federal monies, to disburse grants for problem gambling purposes. 5-1319. Financial responsibility On or before July 1 of each year, a licensed event wagering operator and management services provider shall contract with a certified public accountant to perform an independent audit, in accordance with generally accepted accounting principles published by the American institute of certified public accountants, the financial condition of the licensed event wagering operator's or management services provider's total operation for the previous fiscal year and to ensure compliance with this chapter and for any other purpose as prescribed by rule. Not later than one hundred eighty days after the end of the event wagering operator's or management services provider's fiscal year, a licensed event wagering operator or management service provider shall submit the audit results under this section to the department. The results of an audit submitted to the department under this section are confidential and privileged and are not subject to disclosure as provided in title 39, chapter 1, article 2. 5-1320. Problem gambling; self-exclusion list; program; liabilities A. A licensee shall develop a procedure to inform players that help is available if a person has a problem with gambling and, at a minimum, provide the statewide toll-free helpline telephone number, text message and website information established by the department. B. The department and licensees shall comply with the following requirements to allow problem gamblers to voluntarily exclude themselves from event wagering statewide: 1. The department shall establish a list of persons who, by acknowledging in a manner to be established by the department that they are problem gamblers, voluntarily seek to exclude themselves from event wagering statewide. The department shall establish procedures for the placement on and removal from the list of self-excluded persons. A person other than the person seeking voluntary self-exclusion may not include that person's name on the self-exclusion list of the department. 2. Event wagering operators, commercial sports license holders and limited event wagering operators shall establish procedures for advising persons who inquire about self-exclusion and offer self-exclusion application forms provided by the department to those persons when requested. 3. The department shall compile identifying information concerning self-excluded persons. Such information shall contain, at a minimum, the full name and any aliases of the person, a photograph of the person, the social security or driver's license number of the person and the current physical and electronic contact information, including mailing address, of the person. 4. The department shall provide the compiled information to event wagering operators, commercial sports license holders and limited event wagering operators on a weekly basis. Event wagering operators, commercial sports license holders and limited event wagering operators shall treat the information received from the department under this section as confidential, and the information shall not be disclosed except to vendors approved by the department for purposes of complying with this section, appropriate law enforcement agencies if needed in conducting an official investigation or unless ordered by a court of competent jurisdiction. 5. Event wagering operators, commercial sports license holders and limited event wagering operators shall check the most recent self-excluded persons list provided by the department before creating a player account. The event wagering operator, commercial sports license holder or limited event wagering operator shall revoke a player account and remove all self-excluded persons from all mailing lists of the event wagering operator, commercial sports license holder or limited event wagering operator. 6. Event wagering operators, commercial sports license holders and limited event wagering operators shall take commercially reasonable steps to ensure that persons on the department's list of self-excluded persons are denied access to all event wagering. 7. Event wagering operators, commercial sports license holders and limited event wagering operators shall take commercially reasonable ste