ARC 8475C

ARC 8475C

Proposing rulemaking related to sports wagering and fantasy sports contests
and providing an opportunity for public comment

Item 2 clarifies licensee requirements by removing the requirement to utilize a list in determining prohibited players, which effectively reverts the rule to language that was present prior to recent rulemaking.

Item 3 resolves issues and concerns with a previously delayed rulemaking process.

Item 4 resolves issues and concerns with a previously delayed rulemaking process.

Item 5 resolves issues and concerns with a previously delayed rulemaking process.

Item 6 clarifies requirements for geolocation testing and auditing.

Item 7 resolves issues and concerns with a previously delayed rulemaking process.

Item 8 clarifies licensee requirements by removing the requirement to utilize a list in determining prohibited players, which effectively reverts the rule to language that was present prior to recent rulemaking.

Item 9 clarifies licensee requirements for account verification at registration.

A Regulatory Analysis for this rulemaking was published in the Iowa Administrative Bulletin on October 16, 2024. A public hearing was held on the following date(s):

●November 6, 2024

Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Commission and advise of specific needs.

ITEM 1.Rescind subrule 13.2(4) and adopt the following new subrule in lieu thereof:

13.2(4) Public notice.

a.The public shall have access to the sports wagering rules, available wagers, odds or payouts, the payout period, and the source of the information used to determine the outcome of a sports wager. All licensees and advance deposit sports wagering operators shall require participants to follow the rules of play. The sports wagering rules shall be:

(1)Displayed in the licensee’s sports wagering area.

(2)Posted on the Internet site or mobile application used to conduct advance deposit sports wagering.

(3)Included in any terms and conditions disclosure statements of the advance deposit sports wagering system.

b.During account registration and each time the user logs in, advance deposit sports wagering operators shall display the following information on any interface that accepts wagers:

(1)Account sharing is prohibited.

(2)Persons under the age of 21 are prohibited from wagering.

(3)Any other disclosures, as required by the administrator.

ITEM 2.Rescind paragraphs 13.2(7)“a”, 13.2(7)“b” and 13.2(7)“d” and adopt the following new paragraphs in lieu thereof:

a.To prohibit wagering by coaches, athletic trainers, officials, players, or other individuals who participate and persons employed in a position with direct involvement with coaches, athletic trainers, officials, players or other individuals who participate in an authorized sporting event in which wagers may be accepted.

b.To identify and suspend accounts opened by individuals on behalf of persons under the age of 21.

d.To promptly report to the commission, in a format approved by the administrator, any abnormal wagering activity or patterns that may indicate a concern about the integrity of an authorized sporting event or events, and any other conduct with the potential to corrupt a wagering outcome of an authorized sporting event for purposes of financial gain, including but not limited to match fixing, and suspicious or illegal wagering activities, including the use of funds derived from illegal activity, wagers to conceal or launder funds derived from illegal activity, use of agents to place wagers, account sharing, or use of false identification. Integrity-monitoring procedures shall also provide for the sharing of information with other licensees, other governing authorities, and accredited sports governing entities by participating in an integrity-monitoring association or group or by another method as approved by the administrator.

ITEM 3.Rescind subrule 13.5(2) and adopt the following new subrule in lieu thereof:

13.5(2) Account registration. A person must have an established account in order to place advance deposit sports wagers. The process for establishing an account is subject to the administrator’s approval. An account may be established through on-site registration under procedures previously approved by the administrator or through remote registration. To establish an account, an application for an account shall be signed or otherwise authorized in a manner approved by the administrator and shall include the applicant’s full legal name, principal residential address, date of birth, last four digits of the social security number, and any other information required by the administrator. The account registration process shall also include:

a.Age verification to prevent persons under the legal age for sports wagering from establishing an account.

b.An applicant verification process that includes an exact match of the following:

(1)Date of birth, including month, date and year of birth.

(2)The last four digits of the social security number.

(3)Last name.

c.An applicant verification process that permits a flexible match by allowing the following:

(1)First name may include nicknames and abbreviations.

(2)Address may include abbreviations.

d.Authentication of identification by:

(1)Answering knowledge-based questions based on the applicant’s public or private data; or

(2)Verifying that device ID and phone number match the applicant’s publicly known data; or

(3)Comparing of valid government-issued ID to applicant’s picture taken at time of account registration; or

(4)Another method as approved by the administrator.

e.Verification that the player applicant is not on the statewide self-exclusion list set forth in Iowa Code section 99F.4(22) prior to establishing an account.

f.Availability and acceptance of a set of terms and conditions that is also readily accessible to the player before and after registration and noticed when updated. Notices shall include, at a minimum, the following:

(1)Explanation of rules in which any unrecoverable malfunctions of hardware/software are addressed including, but not limited to, if the unrecoverable malfunction, wagering event cancellation, or other catastrophic malfunction results in the voiding of any wagers.

(2)Procedures to deal with interruptions caused by the suspension of data flow from the network server during an event.

(3)Specifications advising players to keep their account credentials secure.

(4)Statement that no underage individuals are permitted to participate in wagering.

(5)Explanation of conditions under which an account is declared inactive and actions undertaken on the account once this declaration is made.

g.Availability and acceptance of a privacy policy that is also readily accessible to the player before and after registration and noticed when updated and that includes, at a minimum, the following:

(1)Statement of information that is collected, the purpose for information collection, and the conditions under which information may be disclosed.

(2)Statement that any information obtained in respect to player registration or account establishment must be done in compliance with the privacy policy.

(3)Requirement that any information about player accounts which is not subject to disclosure pursuant to the privacy policy must be kept confidential, except where the release of that information is required by law.

(4)Requirement that all player information must be securely erased from hard disks, magnetic tapes, solid state memory, and other devices before the device is properly disposed of by the licensee. If erasure is not possible, the storage device must be destroyed.

h.If an advance deposit sports wagering operator has an agreement with more than one licensee, the advance deposit sports wagering operator shall submit an agreement to the administrator that indicates the manner in which customer net receipts shall be assigned with its licensee partners. The agreement shall include all partnering licensees and their respective qualified sponsoring organizations, and the net receipts shall be allocated using one of the following methods:

(1)Make available an option for new remotely registered customers to select the licensee at which net receipts are assigned.

(2)Allocate new remotely registered customer net receipts to the licensee which is located nearest to the customer’s principal residential address.

(3)Distribute all customer receipts evenly between all licensees for which an agreement exists.

(4)An alternative allocation agreement that complies with local, state and federal law. The agreement shall be made available for public inspection.

ITEM 4.Rescind paragraphs 13.5(3)“b” and 13.5(3)“e” and adopt the following new paragraphs in lieu thereof:

b.Location detection procedures to reasonably detect and dynamically monitor the location of a player attempting to place any wager or perform other account activities as identified by the advance deposit sports wagering operator or licensee, related to an Iowa authorized account. Account activity-based location detection controls shall be informed by industry best practices and any commission guidelines for the detection of fraud of other unauthorized or illegal activity. The advance deposit sports wagering operator or licensee shall utilize and monitor geolocation activity to detect potential fraudulent and suspicious activity, which shall be reported in accordance with paragraph 13.2(7)“d.” A player outside the permitted boundary attempting to make a wager shall be rejected, and the player shall be notified. The confidence radius shall be entirely located within the permitted boundary.

e.Authentication for login using a multifactor authentication process or other secure alternative means as authorized by the commission. After successful login, multifactor authentication will need to be performed at least every 14 days for each unique device. Processes for retrieving lost usernames and passwords shall be available, secure, and clearly disclosed to the player. Players shall be allowed to change their passwords.

ITEM 5.Rescind subrule 13.5(7) and adopt the following new subrule in lieu thereof:

13.5(7) Expiration or termination of an Iowa Code section 99F.7A operating agreement. In the event an advance deposit sports wagering operating agreement between a licensee under Iowa Code section 99F.7A and another entity expires, terminates, or is no longer valid, notice of termination must be given to the commission and all customers affiliated with the licensee. A customer shall be given an opportunity to close an account. If the advance deposit sports wagering operator has an operating agreement with other licensees in the state of Iowa, the customer shall have the option to select another partner licensee to which their net receipts shall be assigned, or the customer’s net receipts shall be assigned to any remaining partner licensees in accordance with an agreement submitted to the administrator pursuant to paragraph 13.5(2)“h.”

ITEM 6.Rescind paragraphs 13.6(3)“b” and 13.6(3)“c” and adopt the following new paragraphs in lieu thereof:

b.A geolocation system and integrity test shall be performed annually on the advance deposit wagering system.

(1)The testing organization must be independent of the licensee and the licensed geolocation vendor and shall be qualified by the administrator.

(2)The geolocation test shall be completed and the results submitted no later than March 31 of each year.

(3)Geolocation testing shall review existing licensee procedures for detecting and reporting fraudulent activity associated with any account activity detected by the geolocation system.

c.At the discretion of the administrator, additional assessments or specific testing criteria may be required.

ITEM 7.Rescind subrule 14.7(2) and adopt the following new subrule in lieu thereof:

14.7(2) Customer verification.

a.A customer verification process shall include an exact match of the following:

(1)Date of birth, including month, date and year of birth.

(2)The last four digits of the social security number.

(3)Last name.

b.A customer verification process shall permit a flexible match by allowing the following:

(1)First name may include nicknames and abbreviations.

(2)Address may include abbreviations.

c.A customer verification process shall authenticate identification by the following:

(1)Answering knowledge-based questions based on the applicant’s public or private data; or

(2)Verifying that device ID and phone number match the applicant’s publicly known data; or

(3)Comparing a valid government-issued ID to a photo of the applicant taken at the time of account registration; or

(4)Another method as approved by the administrator.

ITEM 8.Rescind paragraph 14.8(1)“c” and adopt the following new paragraph in lieu thereof:

c.Restriction of entries from coaches, officials, athletes, contestants, or other individuals who participate in a game or contest that is the subject of an Internet fantasy sports contest in which the outcome is determined, in whole or in part, by the accumulated statistical results of a team of individuals in the game or contest in which they participate.

ITEM 9.Rescind paragraph 14.8(5)“h” and adopt the following new paragraph in lieu thereof:

h.During account registration and each time the user logs in, fantasy sports contest service providers shall display the following information on any interface that accepts fantasy sports contest entries:

(1)Account sharing is prohibited.

(2)Persons under the age of 21 are prohibited from entering fantasy sports contests.

(3)Any other disclosures, as required by the administrator.