Introduced Version SENATE BILL No. 405 _____ DIGEST OF INTRODUCED BILL Citations Affected: IC 35-45-5-14. IC 4-31; IC 4-33; IC 4-35; IC 4-38; Synopsis: Wagering on sports. Authorizes sports wagering at riverboats, racinos, and satellite facilities after the Indiana gaming commission determines that current federal prohibitions on sports wagering are no longer applicable. Provides for the administration, conduct, and taxation of sports wagering. Imposes initial and annual fees on a licensed owner, operating agent, or permit holder conducting sports wagering. Effective: July 1, 2018. Ford January 8, 2018, read first time and referred to Committee on Public Policy. 2018 IN 405—LS 6842/DI 92 Introduced Second Regular Session 120th General Assembly (2018) PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type. Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution. Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2017 Regular Session of the General Assembly. SENATE BILL No. 405 A BILL FOR AN ACT to amend the Indiana Code concerning gaming. Be it enacted by the General Assembly of the State of Indiana: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 SECTION 1. IC 4-31-2-20.9 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 20.9. "Sports wagering" refers to wagering conducted under IC 4-38 on athletic and sporting events involving human competitors. The term does not include pari-mutuel wagering on horse racing. SECTION 2. IC 4-31-9-0.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 0.5. This chapter does not apply to sports wagering conducted under IC 4-38 at a satellite facility. SECTION 3. IC 4-33-2-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 2. (a) "Adjusted gross receipts" means: (1) the total of all cash and property (including checks received by a licensee or an operating agent) whether collected or not, received by a licensee or an operating agent from gaming operations; minus 2018 IN 405—LS 6842/DI 92 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 (2) the total of: (A) all cash paid out as winnings to patrons; and (B) uncollectible gaming receivables, not to exceed the lesser of: (i) a reasonable provision for uncollectible patron checks received from gaming operations; or (ii) two percent (2%) of the total of all sums, including checks, whether collected or not, less the amount paid out as winnings to patrons. For purposes of this section, a counter or personal check that is invalid or unenforceable under this article is considered cash received by the licensee or operating agent from gaming operations. (b) The term does not include amounts received from sports wagering conducted by a licensee or operating agent under IC 4-38. SECTION 4. IC 4-33-2-17.7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 17.7. "Sports wagering" refers to wagering conducted under IC 4-38 on athletic and sporting events involving human competitors. The term does not include money spent to participate in paid fantasy sports under IC 4-33-24. SECTION 5. IC 4-33-3-22 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 22. (a) The commission shall file a written annual report with the governor before September 1 of each year. The commission shall file any additional reports that the governor requests. (b) The annual report filed under this section must include a statement describing the following: (1) The receipts and disbursements of the commission. (2) Actions taken by the commission. (3) The development and fiscal impact of sports wagering conducted under IC 4-38. (3) (4) Any additional information and recommendations that: (A) the commission considers useful; or (B) the governor requests. SECTION 6. IC 4-33-12-0.5, AS ADDED BY P.L.255-2015, SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 0.5. This chapter does not apply to the following: (1) A riverboat in a historic hotel district. (2) Sports wagering conducted under IC 4-38 at a riverboat. SECTION 7. IC 4-33-13-0.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 2018 IN 405—LS 6842/DI 92 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 1, 2018]: Sec. 0.5. This chapter does not apply to sports wagering conducted under IC 4-38 at a riverboat. SECTION 8. IC 4-35-2-2, AS AMENDED BY P.L.210-2013, SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 2. (a) "Adjusted gross receipts" means: (1) the total of all cash and property (including checks received by a licensee, whether collected or not) received by a licensee from gambling games, including amounts that are distributed by a licensee under IC 4-35-7-12; minus (2) the total of: (A) all cash paid out to patrons as winnings for gambling games; and (B) uncollectible gambling game receivables, not to exceed the lesser of: (i) a reasonable provision for uncollectible patron checks received from gambling games; or (ii) two percent (2%) of the total of all sums, including checks, whether collected or not, less the amount paid out to patrons as winnings for gambling games. For purposes of this section, a counter or personal check that is invalid or unenforceable under this article is considered cash received by the licensee from gambling games. (b) The term does not include amounts received from sports wagering conducted by a licensee under IC 4-38. SECTION 9. IC 4-35-8-0.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 0.5. This chapter does not apply to sports wagering conducted under IC 4-38 at a gambling game facility licensed under this article. SECTION 10. IC 4-38 IS ADDED TO THE INDIANA CODE AS A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: ARTICLE 38. SPORTS WAGERING Chapter 1. General Provisions Sec. 1. Pursuant to 15 U.S.C. 1172, approved January 2, 1951, the state of Indiana, acting by and through duly elected and qualified members of the legislature, does declare and proclaim that the state is exempt from the provisions of 15 U.S.C. 1172. Sec. 2. All shipments of gambling devices used to conduct sports wagering under this article to an operating agent, a licensed owner, or a permit holder in Indiana, the registering, recording, and labeling of which have been completed by the manufacturer or 2018 IN 405—LS 6842/DI 92 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 dealer thereof in accordance with 15 U.S.C. 1171 through 1178, are legal shipments of gambling devices into Indiana. Chapter 2. Definitions Sec. 0.5. The definitions set forth in this chapter apply throughout this article unless the context clearly denotes otherwise. Sec. 1. "Adjusted gross receipts" means: (1) the total of all cash and property (including checks received by a certificate holder) whether collected or not, received by a certificate holder from sports wagering; minus (2) the total of: (A) all cash paid out as winnings to sports wagering patrons; and (B) uncollectible gaming receivables, not to exceed the lesser of: (i) a reasonable provision for uncollectible patron checks received from sports wagering; or (ii) two percent (2%) of the total of all sums, including checks, whether collected or not, less the amount paid out as winnings to sports wagering patrons. For purposes of this section, a counter or personal check that is invalid or unenforceable under this article is considered cash received by the certificate holder from sports wagering. Sec. 2. "Certificate holder" means a licensed owner, operating agent, or permit holder issued a certificate of authority by the commission authorizing the licensed owner, operating agent, or permit holder to conduct sports wagering under this article. Sec. 3. "Commission" refers to the Indiana gaming commission established by IC 4-33-3-1. Sec. 4. "Department" refers to the department of state revenue. Sec. 5. "Gross receipts" means the total amount of money exchanged for the purchase of tokens or electronic cards by sports wagering patrons. Sec. 6. "Licensed facility" means any of the following: (1) A satellite facility operated under IC 4-31-5.5. (2) A riverboat operated under IC 4-33. (3) A gambling game facility operated under IC 4-35. Sec. 7. "Licensed owner" has the meaning set forth in IC 4-33-2-13. Sec. 8. "Occupational license" means a license issued by the commission under IC 4-33-8. Sec. 9. "Operating agent" means a person with whom the commission has entered into a contract under IC 4-33-6.5 to 2018 IN 405—LS 6842/DI 92 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 operate a riverboat in a historic hotel district. Sec. 10. "Permit holder" has the meaning set forth in IC 4-31-2-14. Sec. 11. "Person" means an individual, a sole proprietorship, a partnership, an association, a fiduciary, a corporation, a limited liability company, or any other business entity. Sec. 12. "Riverboat" has the meaning set forth in IC 4-33-2-17. Sec. 13. "Sports wagering" refers to wagering conducted under this article on athletic and sporting events involving human competitors. The term does not include pari-mutuel wagering on horse racing or money spent to participate in paid fantasy sports under IC 4-33-24. Sec. 14. "Sports wagering device" refers to a mechanical, electrical, or computerized contrivance, terminal, device, apparatus, piece of equipment, or supply approved by the commission for conducting sports wagering under this article. Sec. 15. "Supplier's license" means a license issued under IC 4-33-7. Chapter 3. Administrative Rules Sec. 1. The commission shall adopt rules under IC 4-22-2, including emergency rules in the manner provided under IC 4-22-2-37.1, to implement this article. Rules adopted under this section must include the following: (1) Standards for the conduct of sports wagering under this article. (2) Standards and procedures to govern the conduct of sports wagering, including the manner in which: (A) wagers are received; (B) payouts are paid; and (C) point spreads, lines, and odds are determined. (3) Standards for allowing a certificate holder to offer sports wagering as an interactive form of gaming. (4) Rules prescribing the manner in which a certificate holder's books and financial records relating to sports wagering are maintained and audited, including standards for the daily counting of a certificate holder's gross receipts from sports wagering and standards to ensure that internal controls are followed. (5) Rules concerning the detection and prevention of compulsive gambling. Sec. 2. Rules adopted under section 1 of this chapter must require a certificate holder to do the following: 2018 IN 405—LS 6842/DI 92 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 (1) Designate an area within the licensed facility operated by the certificate holder for sports wagering conducted under this article. (2) Ensure that the certificate holder's surveillance system covers all areas of the certificate holder's licensed facility in which sports wagering is conducted. (3) Allow the commission to be present through the commission's gaming agents during the time sports wagering is conducted in all areas of the certificate holder's licensed facility in which sports wagering is conducted to do the following: (A) Ensure maximum security of the counting and storage of the sports wagering revenue received by the certificate holder. (B) Certify the sports wagering revenue received by the certificate holder. (C) Receive complaints from the public. (D) Conduct other investigations into the conduct of sports wagering and the maintenance of the equipment that the commission considers necessary and proper for sports wagering. (4) Ensure that individuals who are less than twenty-one (21) years of age do not make wagers under this article. (5) Provide written information to sports wagering patrons about sports wagering, payouts, winning wagers, and other information considered relevant by the commission. (6) Post a sign in the designated sports wagering area indicating the minimum and maximum amounts that may be wagered under this article. Chapter 4. Authority to Conduct Sports Wagering Sec. 1. The commission is authorized to approve sports wagering in Indiana not more than ninety (90) days after the commission determines that: (1) the federal statutes prohibiting sports wagering and the state regulation of sports wagering in Indiana and similarly situated states have been repealed or amended to allow Indiana to permit and regulate sports wagering; or (2) the United States Supreme Court has ruled that a federal statute described in subdivision (1) is unconstitutional and may not be applied to prohibit Indiana from permitting and regulating sports wagering. Sec. 2. The commission shall announce any determinations made 2018 IN 405—LS 6842/DI 92 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 under section 1 of this chapter on the commission's Internet web site. Sec. 3. After making an announcement under section 2 of this chapter, the commission may begin accepting applications for a certificate of authority from any licensed owner, operating agent, or permit holder that wishes to offer sports wagering under this article. The commission shall prescribe the form of the application. Sec. 4. (a) A licensed owner, operating agent, or permit holder that wishes to offer sports wagering under this article must do the following: (1) Submit an application to the commission in the manner prescribed by the commission for each licensed facility in which the applicant wishes to conduct sports wagering. (2) Subject to subsection (b), pay an initial fee equal to the greater of: (A) one percent (1%) of the adjusted gross receipts (as determined under IC 4-33 or IC 4-35, as applicable) received for gambling at the particular licensed facility in the state fiscal year ending most recent to the date that the applicant submits an application under this section; or (B) five hundred thousand dollars ($500,000). (b) A permit holder that applies for a certificate of authority to conduct sports wagering at a gambling game facility operated under IC 4-35 is not required to pay an additional fee under subsection (a) with an application to conduct sports wagering at a satellite facility operated under IC 4-31-5.5. Sec. 5. Upon receipt of the application and fee required by section 4 of this chapter, the commission shall issue a certificate of authority to a licensed owner, an operating agent, or a permit holder authorizing the licensed owner, operating agent, or permit holder to conduct sports wagering under this article in a designated licensed facility. Sec. 6. The commission shall deposit fees received under this chapter in the state general fund. Chapter 5. Conduct of Sports Wagering Sec. 1. The commission shall test new sports wagering devices and new forms, variations, or composites of sports wagering under the terms and conditions that the commission considers appropriate before authorizing a certificate holder to offer a new sports wagering device or a new form, variation, or composite of sports wagering. Sec. 2. A certificate holder shall designate an area within each 2018 IN 405—LS 6842/DI 92 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 licensed facility in which the certificate holder is authorized to conduct sports wagering under this article. Sports wagering may not be conducted at any location other than the area designated under this section. Sec. 3. (a) Except as provided in subsection (b), a person who is less than twenty-one (21) years of age may not be present in an area where sports wagering is being conducted. (b) A person who is at least eighteen (18) years of age and who is an employee of a certificate holder's licensed facility may be present in an area where sports wagering is conducted. However, an employee who is less than twenty-one (21) years of age may not perform any function involving sports wagering by the patrons. Sec. 4. (a) Sports wagering may not be conducted with money or other negotiable currency. (b) A certificate holder shall determine the minimum and maximum wagers in sports wagering conducted in the certificate holder's licensed facility. Sec. 5. A certificate holder may not permit any sports wagering on the premises of the certificate holder's licensed facility except as permitted by this article. Sec. 6. A sports wagering device must be approved by the commission and acquired by a certificate holder from a licensed supplier. The commission shall determine whether any other supplies and equipment used to conduct sports wagering require a certificate holder to acquire the supplies and equipment from a licensed supplier. IC 4-33-7 applies to the distribution of sports wagering devices and the conduct of sports wagering under this article. Sec. 7. The commission shall determine the occupations related to sports wagering that require an occupational license. IC 4-33-8 applies to the conduct of sports wagering under this article. Sec. 8. IC 4-31-6-11, IC 4-33-4-27, IC 4-33-8.5, IC 4-35-4-16, and IC 4-35-6.7 apply, as appropriate, to sports wagering conducted at a licensed facility. Chapter 6. Taxes and Fees Sec. 1. A wagering tax of nine and twenty-five hundredths percent (9.25%) is imposed on the adjusted gross receipts received from sports wagering conducted by a certificate holder under this article. Sec. 2. The certificate holder shall remit the tax imposed by section 1 of this chapter to the department before the close of the business day one (1) day before the last business day of each month 2018 IN 405—LS 6842/DI 92 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 for the wagering taxes collected that month. Any taxes collected during the month but after the day on which the taxes are required to be paid to the department shall be paid to the department at the same time the following month's taxes are due. Sec. 3. The payment of the tax under this chapter must be an electronic funds transfer by automated clearinghouse. Sec. 4. The department shall deposit tax revenue collected under this chapter in the state general fund. Sec. 5. A certificate holder shall pay to the commission an annual administrative fee of seventy-five thousand dollars ($75,000). The fee imposed by this section is due one (1) year after the date that the certificate holder commences sports wagering operations under this article and on each annual anniversary date thereafter. The commission shall deposit the administrative fees received under this section in the sports wagering fund. Sec. 6. (a) The sports wagering fund is established. (b) The commission shall administer the fund. (c) The fund consists of the administrative fees deposited in the fund under section 5 of this chapter. (d) The treasurer of state shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as other public funds may be invested. (e) Money in the fund at the end of a state fiscal year does not revert to the state general fund. (f) Money in the fund must be used by the commission to pay the costs incurred to administer this article. SECTION 11. IC 35-45-5-14 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2018]: Sec. 14. This chapter does not apply to sports wagering conducted under IC 4-38. 2018 IN 405—LS 6842/DI 92