SENATE DOCKET, NO. 903 FILED ON: 1/16/2019
SENATE . . . . . . . . . . . . . . No. 201
The Commonwealth of Massachusetts
Brendan P. Crighton
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to regulate sports wagering.
Brendan P. Crighton
Paul R. Feeney
Bristol and Norfolk
Jeffrey N. Roy
SENATE DOCKET, NO. 903 FILED ON: 1/16/2019
SENATE . . . . . . . . . . . . . . No. 201
By Mr. Crighton, a petition (accompanied by bill, Senate, No. 201) of Brendan P. Crighton, Peter Capano, Paul R. Feeney and Jeffrey N. Roy for legislation to regulate sports wagering. Economic Development and Emerging Technologies.
The Commonwealth of Massachusetts
In the One Hundred and Ninety-First General Court
An Act to regulate sports wagering.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
Preamble: In 2018 the United States Supreme court struck down the law barring sports (28 U. S. C. §3702(1))betting outside of the state Nevada, therefore allow other states to partake in it. Therefore the Commonwealth of Massachusetts enacts the following to allow sports betting to fall under the supervision of the Massachusetts Gaming Commission authority provided under Chapter 23K.
SECTION 1: Chapter 4 of the general laws, as so appearing, is hereby amended by striking out lines 67-76, in section 7, and inserting in place thereof the following:-
Tenth, “illegal gaming,” banking or percentage game played with cards, dice, tiles or dominoes, an electronic, electrical or mechanical device or machine for money, property, checks, credit or any representative of value, but excluding: (i) a lottery game conducted by the state lottery commission, under sections 24, 24A and 27 of chapter 10; (ii) a game conducted under chapter 23K; (iii) a sports wager conducted under chapter 23N; (iv) pari-mutuel wagering on horse races under chapters 128A and 128C and greyhound races under said chapter 128C; (v) a game of bingo conducted under chapter 271; and (vi) charitable gaming conducted under said chapter 271.
SECTION 2: The general laws, as so appearing, are hereby amended by inserting after chapter 23M, the following chapter:-
Chapter 23N: Regulation of Sports Wagering.
Section 1. Definitions.
As used in this chapter, unless the context requires otherwise:
(a) “Gaming Establishment” means a licensee offering gaming at a facility in this state or applicant as defined in section 2 of chapter 23K
(b) “Interactive sports wagering platform” or “platform” means a person or entity that offers sports wagering over the internet, including on websites and mobile devices, in conjunction with a gaming establishment, or as a separate online platform
(c) “Sports governing body” means the organization that prescribes final rules and enforces codes of conduct with respect to a sporting event and participants therein.
(d) "Sporting event" means a professional sports or athletic event or a motor race event.
(e) “Sports wagering” means accepting wagers on sporting events or portions of sporting events, or on the individual performance statistics of athletes in a sporting event or combination of sporting events, by any system or method of wagering, including but not limited to in-person, or over the internet through websites and on mobile devices. The term includes, but is not limited to, single-game bets, teaser bets, parlays, over-under, moneyline, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, and straight bets.
(f) “Sports wagering operator” or “operator” means a gaming establishment that offers sports wagering or an interactive sports wagering platform that offers sports wagering.
(g) “Tier one sports wager” means a sports wager that is determined solely by the final score or final outcome of the sporting event and is placed before the sporting event has begun;
(h) “Tier two sports wager” means a sports wager that is not a tier one sports wager;
(i) “Wager” or “bet” means the staking or risking by a person of something of value upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome. The term does not include:
(i) any activity governed by the securities laws of the United States or this state;
(ii) any contract of indemnity or guarantee;
(iii) any contract for insurance; or
(iv) participation in any game or contest in which the participants do not stake or risk anything of value other than personal efforts of the participants in playing the game or contest or obtaining access to the internet, or points or credits that the sponsor of the game or contest provides to participants free of charge and that can be used or redeemed only for participation in games or contests offered by the sponsor.
Section 2. Sports wagering by gaming establishments.
(a) Sports wagering may not be offered in this state except by an establishment pursuant to this Act.
(b) Establishments may offer sports wagering:
(i) in-person at the licensed facility; and
(ii) over the internet via an interactive sports wagering platform to persons physically located in this state.
(iii) pay an initial fee of $500,000 imposed under this section shall be remitted to the department of revenue by the registered game operator.
(c) There shall be licences for either gaming establishments currently licensed under Ch. 23K or Racing License Holders.
(d) No license shall be granted to a gaming establishment that is currently or previously has been partnered with any type of illegal offshore betting.
(e) A gaming establishment may contract with interactive sports wagering platforms to administer sports wagering over the internet on its behalf or engage in sports wagering over the internet if it owns technology to do so.
(f) No sports wagering license shall be granted to a gaming establishment until an investigation pursuant to Ch.23K section 12 is completed. However, if the gaming establishment is already licensed under 23K said investigation will be at the discretion of the Gaming Commission.
(g) A registered sports wagering operator shall pay a tax of 12.5 per cent gross revenue. Taxes imposed under this section shall be remitted to the department of revenue quarterly by the registered game operator.
(h) Each year on or before the anniversary date of the payment of the initial fee made under subsection (b)(ii), if such sports betting license has been issued, a licensee shall pay to the commission an annual license renewal fee of $100,000.
Section 3. Licensing of interactive sports wagering platforms.
(a) An interactive sports wagering platform may offer sports wagering on behalf of a gaming establishment only if it holds a platform license issued by the Massachusetts gaming commission.
(b) Applicants for interactive sports wagering platform licenses shall:
(i) submit an application to the commission in the manner prescribed by the commission to verify the platform’s eligibility under this chapter, and
(ii) pay an initial fee of $1,000,000. Fees imposed under this section shall be remitted to the department of revenue by the registered game operator.
(c) Each year on or before the anniversary date of the payment of the initial fee made under subsection (b)(ii), if such platform license has been issued, a platform shall pay to the commission an annual license renewal fee of $100,000.
(d) Notwithstanding contrary law, a platform license application and all documents, reports, and data submitted by an interactive sports wagering platform to the commission containing proprietary information, trade secrets, financial information, or personal information about any person shall be treated by the commission as closed records and shall not to be disclosed to the public unless required by court order, this chapter, or other law.
(e) An interactive sports wagering platform may enter into agreements to offer sports wagering on behalf of one or more gaming establishments without limitation. Such agreements are not prerequisites to obtaining an interactive sports wagering platform license.
(f) No license shall be granted to interactive sports wagering platforms that are currently or previously have been partnered with any type of illegal offshore betting.
Section 4. Sports wagering operators; consumer protections.
(a) Sports wagering operators shall verify that a person placing a wager, including with respect to online or mobile betting, is twenty-one years of age.
(b) Sports wagering operators shall allow individuals to restrict themselves from placing wagers with the operator, as defined, but not limited to section 45 of chapter 23K.
(c) Sports wagering operators shall not make contributions of money or value by applicant, etc., for sports betting license to municipal, county or state office holder, candidates for public office or groups organized in support of such candidates
(d) The commission shall promulgate regulations that require an operator to implement responsible gaming programs that include comprehensive employee trainings on responding to circumstances in which individuals present signs of a gambling addiction.
(e) The commission shall promulgate regulations to ensure that an operator’s advertisements for sports wagering:
(i) do not target minors or other persons who are ineligible to place wagers, problem gamblers, or other vulnerable persons, which may include limitations on the form, content, quantity, timing, and location of advertisements;
(ii) disclose the identity of the sports wagering operator;
(iii) provide information about or links to resources relating to gambling addiction; and
(iv) are not false, misleading, or deceptive to a reasonable consumer.
Section 5. Integrity requirements.
(a) Sports wagering operators shall conduct background checks on newly hired employees, and annual background checks on all existing employees. Background checks shall search for criminal history, and any charges or convictions involving corruption or manipulation of sporting events and association with organized crime.
(b) Sports wagering operators shall employ commercially reasonable methods to:
(i) prohibit the operator, directors, officers, owners, and employees of the operator, and any relative living in the same household as such persons, from placing bets with the operator;
(ii) prohibit athletes, coaches, referees, team owners, employees of a sports governing body or its member teams, and player and referee union personnel from wagering on any sporting event overseen by their sport’s governing body. In determining which persons are excluded from placing wagers under this subsection, operators shall use publicly available information and any lists of such persons that the sports governing body may provide to the commission;
(iii) prohibit any individual with access to non-public confidential information held by the operator from placing wagers with the operator;
(iv) prohibit persons from placing wagers as agents or proxies for others; and
(v) maintain the security of wagering data, customer data, and other confidential information from unauthorized access and dissemination; provided, however, that nothing in this chapter shall preclude the use of internet or cloud-based hosting of such data and information or disclosure as required by court order, other law, or this chapter.
(c) The commission shall designate a state law-enforcement entity to have primary responsibility for conducting, or assisting the commission in conducting, investigations into abnormal betting activity, match fixing, and other conduct that corrupts a betting outcome of a sporting event or events for purposes of financial gain.
(d) The commission and sports wagering operators shall cooperate with investigations conducted by sports governing bodies or law enforcement agencies, including but not limited to providing or facilitating the provision of account-level betting information and audio or video files relating to persons placing wagers.
(e) Sports wagering operators shall immediately report to the commission any information relating to:
(i) criminal or disciplinary proceedings commenced against the sports wagering operator in connection with its operations;
(ii) abnormal betting activity or patterns that may indicate a concern with the integrity of a sporting event or events;
(iii) any potential breach of the relevant sports governing body’s internal rules and codes of conduct pertaining to sports wagering;
(iv) any other conduct that corrupts a betting outcome of a sporting event or events for purposes of financial gain, including match fixing; and
(v) suspicious or illegal wagering activities, including use of funds derived from illegal activity, wagers to conceal or launder funds derived from illegal activity, using agents to place wagers, and using false identification.
Sports wagering operators shall also immediately report information relating to conduct described in subsections (ii), (iii), and (iv) to the relevant sports governing body.
(f) Sports wagering operators shall maintain the confidentiality of information provided by a sports governing body to the sports wagering operator, unless disclosure is required by this chapter, the commission, other law, or court order.
(g) The commission and sports wagering operators shall maintain the confidentiality of all information relating to conduct described in subsections (e)(ii), (e)(iii), and (e)(iv) unless disclosure is required by this chapter, other law, or court order, or authorized by the relevant sports governing body. Nothing herein prohibits the commission or a sports wagering operator from making a confidential disclosure to another sports wagering operator, a sports governing body, sports betting regulating entity, law enforcement entity or other party for the purpose of preventing or investigating conduct that corrupts or could corrupt the outcome of a sporting event, including match fixing.
Section 6. Recordkeeping; information sharing
(a) Sports wagering operators shall maintain records of all bets and wagers placed, including personally identifiable information of the bettor, amount and type of bet, time the bet was placed, location of the bet, including IP address if applicable, the outcome of the bet, records of abnormal betting activity, and video camera recordings in the case of in-person wagers for at least three years after the sporting event occurs and make such data available for inspection upon request of the commission or as required by court order.
(b) If a sports governing body has notified the commission that real-time information sharing for wagers placed on its sporting events is necessary and desirable, sports wagering operators shall share in real time, at the account level, and in pseudononymous form, the information required to be retained pursuant to Section 6(a) (other than video files) with the sports governing body or its designee with respect to wagers on its sporting events. Such information may be used by a sports governing body solely for integrity purposes.
(c) The commission shall annually publish a report stating the amount received from sports wagering operators in fees.
(iv) Any unclaimed fees shall be distributed to the sports wagering operators that timely remitted the fees required under this subsection to the commission. Such fees shall be distributed to the eligible sports wagering operators on a pro rata basis.
(d) The commission shall cooperate with a sports governing body and sports wagering operators to ensure the timely, efficient, and accurate sharing of information.
Section 7. Prohibitions
No person shall be able to place a sports wager on a National Collegiate Athletic Association team from the Commonwealth of Massachusetts.
Section 8. Study of Expansion of Sports Betting
The Gaming Commision shall study the feasibility, and offer recommendations on how to implement sports betting at professional sports stadiums, retail shops not licensed currently under Ch. 23K, and how in-game betting will be affected by integrated broadcasts of sporting events.
Section 9. Civil penalty.
Any person, firm, corporation, association, agent, or employee who knowingly violates any procedure implemented under this Act shall be liable for a civil penalty of not more than $10,000 for each violation, not to exceed $100,000 for violations arising out of the same transaction or occurrence, which shall accrue to the state and may be recovered in a civil action brought by the commission.
Section 10. Criminal liability.
(i) places, or causes to be placed, a bet or wager on the basis of material nonpublic information relating to that bet or wager, while knowing that the information is material nonpublic information; or
(ii) knowingly engages in, facilitates, or conceals conduct that intends to improperly influence a betting outcome of a sporting event for purposes of financial gain, in connection with betting or wagering on a sporting event—
shall be fined not more than $5,000,000 or imprisoned not more than ten years, or both.
(b) A bet or wager is “on the basis of” material nonpublic information relating to that bet or wager if the person placing the bet or wager, or causing it to be placed, was aware of the material nonpublic information when such person placed the bet or wager or caused it to be placed.
(c) Any person or gaming establishment who violates subsection (a)(ii) shall be liable to the relevant sports governing body, which sports governing body may sue either at law or in equity in any court of competent jurisdiction.
Section 11. Reconciliation with federal law.
Sports wagering may not be offered in this state under this Act until the commission determines that federal law does not prohibit such sports wagering.
SECTION 3. Sections 24, 24A and 27 of chapter 10 of the general laws, as so appearing, shall not apply to a gaming establishment conducting sports wagering in accordance with this chapter.
SECTION 4. Section 2 of chapter 271 of the general laws, as so appearing, is hereby amended, in line 4, by striking out “except as permitted under chapter 23 K” and inserting in its place thereof the following:- “except as permitted under chapters 23K or 23N.”
SECTION 5. Section 3 of chapter 271 of the general laws, as so appearing, is hereby amended, in line 1, by striking out “Except as permitted under chapter 23K” and inserting in its place thereof the following:- “Except as permitted under chapters 23K or 23N.”
SECTION 6. Section 5 of chapter 271 of the general laws, as so appearing, is hereby amended, in line 1, by striking out “except as permitted under chapter 23K” and inserting in its place thereof the following:- “except as permitted under chapters 23K or 23N.”
SECTION 7. Section 5B of chapter 271 of the general laws, as so appearing, is hereby amended, in line 58, by striking out “under chapter 23K” and inserting in its place thereof the following:- “under chapters 23K or 23N.”
SECTION 8. Section 8 of chapter 271 of the general laws, as so appearing, is hereby amended, by striking out lines 10-11 and inserting in its place thereof the following:- “other illegal gaming that is not being conducted pursuant to chapters 23K or 23N.”
SECTION 9. Chapter 271 of the general laws, as so appearing, is hereby amended by striking section 17A and inserting in its place thereof the following section:-
271:17A. Telephones, internet or other communications technology; use for gaming purposes
Section 17A. Except as permitted under chapter 23N, whoever uses a telephone, internet or other communications technology or, being the occupant in control of premises where a telephone, internet or other communications technology is located or a subscriber for a telephone, knowingly permits another to use a telephone, internet or other communications technology so located or for which he subscribes, as the case may be, for the purpose of accepting wagers or bets, or buying or selling of pools, or for placing all or any portion of a wager with another, upon the result of a trial or contest of skill, speed, or endurance of man, beast, bird, or machine, or upon the result of an athletic game or contest, or upon the lottery called the numbers game, or for the purpose of reporting the same to a headquarters or booking office, or who under a name other than his own or otherwise falsely or fictitiously procures telephone, internet or other communications technology service for himself or another for such purposes, shall be punished by a fine of not more than two thousand dollars or by imprisonment for not more than one year.