50 N.J.R. 2322(a)

VOLUME 50, ISSUE 22, NOVEMBER 19, 2018
RULE PROPOSALS

Reporter
50 N.J.R. 2322(a)
NJ - New Jersey Register  >  2018  >  NOVEMBER  >  NOVEMBER 19, 2018  >  RULE PROPOSALS  >  LAW AND PUBLIC SAFETY -- DIVISION OF CONSUMER AFFAIRS

Interested Persons Statement

INTERESTED PERSONS
Interested persons may submit comments, information or arguments concerning any of the rule proposals in this issue until the date indicated in the proposal. Submissions and any inquiries about submissions should be addressed to the agency officer specified for a particular proposal.
The required minimum period for comment concerning a proposal is 30 days. A proposing agency may extend the 30-day comment period to accommodate public hearings or to elicit greater public response to a proposed new rule or amendment. Most notices of proposal include a 60-day comment period, in order to qualify the notice for an exception to the rulemaking calendar requirements of    N.J.S.A. 52:14B-3. An extended comment deadline will be noted in the heading of a proposal or appear in a subsequent notice in the Register.
At the close of the period for comments, the proposing agency may thereafter adopt a proposal, without change, or with changes not in violation of the rulemaking procedures at    N.J.A.C. 1:30-6.3. The adoption becomes effective upon publication in the Register of a notice of adoption, unless otherwise indicated in the adoption notice. Promulgation in the New Jersey Register establishes a new or amended rule as an official part of the New Jersey Administrative Code.
Agency


LAW AND PUBLIC SAFETY > DIVISION OF CONSUMER AFFAIRS > OFFICE OF THE DIRECTOR

Administrative Code Citation

Proposed New Rules: N.J.A.C. 13:45A-36
Text

Fantasy Sports Operators
Authorized By: Paul R. Rodriguez, Acting Director, Division of Consumer Affairs.
Authority: N.J.S.A. 5:20-2.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2018-106.
Submit written comments by January 18, 2019, to:
   Paul R. Rodriguez, Acting Director
   State of New Jersey
   Division of Consumer Affairs
   Office of the Director
   PO Box 45027
   Newark, New Jersey 07101
   or electronically at: http://www.njconsumeraffairs.gov/Proposals/Pages/default.aspx.
The agency proposal follows:
Summary
P.L. 2017, c. 231 tasks the Division of Consumer Affairs (Division) with regulating fantasy sports activities in New Jersey. The law defines "fantasy sports activity" as a "simulated activity … with an entry fee in which a participant … manages an imaginary team and competes against other participants … for a predetermined prize with the outcome … determined by statistics generated based on performance by actual individuals participating in actual competitions or athletic events ..." The Division proposes new N.J.A.C. 13:45A-36 to implement P.L. 2017, c. 231 and regulate the practices of fantasy sports operators that provide fantasy sports activities.

Proposed new N.J.A.C. 13:45A-36.1 sets forth the purpose and scope of Subchapter 36. Proposed new N.J.A.C. 13:45A-36.2 provides definitions for terms used throughout Subchapter 36. The rule includes definitions from P.L. 2017, c. 231 and provides new definitions for "applicant," "award," "casino," "Division," "participant," and "prize." The term "prize" is defined as "money paid to a participant due to the outcome of a fantasy sports activity" and the term "award" is defined as "anything of monetary value provided to a participant due to the outcome of a fantasy sports activity." Awards may include prizes, credits, merchandise, or future entries.

P.L. 2017, c. 231 established that fantasy sports operators who were operating on August 24, 2017, the date the statute was enacted, could continue to operate for 60 days from the date that applications were made available to the public. An operator who applied for a permit during this 60-day period would be permitted to continue to operate while the application was pending. An operator who did not apply during this 60-day period had to cease operations at the end of the 60-day period. An entity that was not providing fantasy sports activities in New Jersey on August 24, 2017 could not provide fantasy sports activities in New Jersey until issued a permit by the Division. Proposed new N.J.A.C. 13:45A-36.3 provides the dates for the deadlines established in P.L. 2017, c. 231. The proposed new rule permits a fantasy sports operator who was operating on August 24, 2017 to continue to do so without a Division issued permit until April 7, 2018, 60 days after February 6, 2018, the date on which the Division began making fantasy sports operator permit applications available. A fantasy sports operator that was operating on August 24, 2017, and which applied for a permit prior to April 7, 2018, is permitted to continue operating while the Division processes its permit application. Any fantasy sports operator that was not operating prior to November 22, 2017 cannot provide fantasy sports activities until it has obtained a Division permit, as the 60-day period under the act expired on April 7, 2018.

Proposed new N.J.A.C. 13:45A-36.4 sets forth the application process for permits. Applicants will be required to submit completed applications, proof that they maintain equipment required by N.J.A.C. 13:45A-36.5, and an application fee. If the Division approves an application, the applicant will be required to submit a permit activation form and the permit fee.

Proposed new N.J.A.C. 13:45A-36.5 requires equipment used in fantasy sports activities to be located in Atlantic City. If a fantasy sports operator is a casino, all of this equipment must be located in Atlantic City; however, if a fantasy sports operator is not a casino, at least one server must be located in Atlantic City. The rule authorizes the Division to inspect facilities used by fantasy sports operators and any of the servers maintained in Atlantic City.

Proposed new N.J.A.C. 13:45A-36.6 requires fantasy sports activities to be determined by statistics from performances of actual individuals participating in athletic competitions. Outcomes of fantasy sports activities cannot be based on the performance of an individual athlete or the score or performance of a single team or combination of teams. Awards for fantasy sports activities must be revealed in advance to all participants and cannot be determined based on the number of participants or entry fees. Fantasy sports operators will be prohibited from making false statements or failing to disclose requested information to the Division.

Proposed new N.J.A.C. 13:45A-36.7 prohibits fantasy sports operators from sharing information that could affect a fantasy sports activity until that information is available to the public, allowing a prohibited participant from taking part in fantasy sports activities, providing fantasy sports activities based on high school athletics, or allowing an underage participant to take part in fantasy sports activities. Proposed new N.J.A.C. 13:45A-36.8 prohibits fantasy sports operators from disclosing proprietary or non-public information that may affect the outcome of fantasy sports activities. Fantasy sports operators are prohibited from permitting athletes, sports agents, team employees, referees, or league officials from providing information to participants in fantasy sports activities. Fantasy sports operators will have to prevent their owners, directors, officers, and employees from taking part in their fantasy sports activities. Operators will also have to prevent individuals who regularly provide advice to participants based on an agreement or sponsorship with the fantasy sports operator from taking part in their fantasy sports activities.

Pursuant to proposed new N.J.A.C. 13:45A-36.9, fantasy sports operators will be required to adopt procedures to ensure that prohibited participants, and those under the age of 18, cannot participate in fantasy sports activities. Fantasy sports operators must allow individuals to restrict themselves from participating in fantasy sports activities and must take steps to prevent such individuals from participating. Fantasy sports operators will have to establish limits for the number of entries an individual can submit for a fantasy sports activity, disclose this limitation, and take steps to prevent individuals from exceeding this limitation.

Fantasy sports operators will be required to segregate participants' funds from operating funds. They will also have to maintain a reserve that is equal to the sum of all participants' accounts and awards owed, or to be owed, which is protected from claims of creditors. The reserve shall be kept in cash, cash equivalents, payment processor reserves and receivables, an irrevocable letter of credit, a bond, or a combination thereof. If the reserve is maintained as cash, cash equivalent, or an irrevocable letter of credit, it must be in a Federally insured financial institution. If the reserve is in cash or cash equivalent, it must be established through a written agreement with a financial institution or insurance carrier. A fantasy sports operator could engage an intermediary to deal with the institution or carrier. Proposed new N.J.A.C. 13:45A-36.9 also permits fantasy sports operators to establish a special purpose segregated account to satisfy segregated fund and reserve requirements. Such an account would have to be controlled by a corporate entity that is not the operator whose governing body has at least one member who is independent of the operator.

Proposed new N.J.A.C. 13:45A-36.10 requires fantasy sports operators to submit an audit prepared by a licensed certified public accountant to the Division annually. The rule sets forth the information that must be in this audit.

[page=2323] Proposed new N.J.A.C. 13:45A-36.11 requires fantasy sports operators to submit a quarterly operations fee to the Division. This fee would be equal to 10.5 percent of total entry fees less prizes paid out for players located in New Jersey. Operation fees would be due on the 20th of April, July, October, and January. Fantasy sports operators that limit their fantasy sports activities to season-long, single-sport activities will be permitted to estimate operation fees based on entry fees and prizes paid out during the previous year. A fantasy sports operator that seeks to pay an operations fee based on such estimates would have to notify the Division prior to submitting the operations fee. A fantasy sports operator that pays an estimated operations fee and whose payments are greater than or less than the amount the fantasy sports operator would have owed if the operations fee was not estimated will be required to adjust the payment for the fourth quarter to reflect the over- or underpayment.

Proposed new N.J.A.C. 13:45A-36.12 sets forth policies that fantasy sports operators will be required to establish. Fantasy sports operators will be required to have procedures to handle security incidents, such as system failures, loss of service, breaches of confidentiality, and malicious intrusion. They will also be required to have testing procedures to ensure that platforms meet industry standards, have a process to close out accounts that are inactive for three years, maintain the security of participant's identity and financial information, permit parents or guardians to exclude underage individuals from accessing fantasy sports activities, and determine the identity, date of birth, and address of individuals opening accounts. Fantasy sports operators will have to prevent their owners, directors, officers, employees, and individuals who provide advice due to agreements with operators from taking part in their fantasy sports activities. Operators will not be permitted to advertise in publications aimed exclusively at juveniles or in elementary schools, high schools, or sports venues used exclusively for student sports activities. The proposed new rule will require operators to use measures to find out the physical location of participants and monitor for simultaneous logins from inconsistent locations.

Proposed new N.J.A.C. 13:45A-36.13 requires fantasy sports operators to have a process for participants to file complaints. Operators must notify participants of this process and respond to complaints within 10 business days. If a fantasy sports operator's response to a complaint is that it needs more information from the participant, the response must clearly identify the needed information. A response based on requested information would have to be made within seven business days. Complaints would have to be kept for seven years and be made available to the Division upon request.

Proposed new N.J.A.C. 13:45A-36.14 requires fantasy sports operators to maintain records for each fantasy sports activity offered, participant transaction logs, participant account information, and advertisements. Records would have to be maintained for seven years and be made available to the Division upon request.

Proposed new N.J.A.C. 13:45A-36.15 requires fantasy sports operators to limit participants to one account and username and to terminate the accounts of participants who seek to establish more than one account.

Proposed new N.J.A.C. 13:45A-36.16 prohibits fantasy sports operators from extending credit to participate in fantasy sports activities.

Proposed new N.J.A.C. 13:45A-36.17 prohibits fantasy sports operators from allowing participants to transfer funds to other participants. Participants must be permitted to withdraw funds from their accounts and requests for withdrawal must be met within five business days. A fantasy sports operator could decline a withdrawal request if the operator believes the participant engaged in fraudulent conduct or conduct that would place the operator in violation of the law. An operator who declines a withdrawal request would have to notify the participant and conduct an investigation of the participant's conduct with additional notices made to the participant every 10 business days.

Proposed new N.J.A.C. 13:45A-36.18 requires fantasy sports operators to renew permits annually. This section also requires such renewal applications to be submitted 45 days prior to expiration.
Proposed new N.J.A.C. 13:45A-36.19 sets forth the fees the Division will charge for fantasy sports operator permits and applications. Permit fees will be based on an operator's gross revenue.

As the Division has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The Division believes that the proposed new rules will have a beneficial impact in that it will ensure that entities that provide fantasy sports activities are conducting these activities in a fair manner. The proposed new rules will also protect participants in fantasy sports activities from possible unethical behavior of some fantasy sports operators.

Economic Impact

The proposed new rules will have an economic impact on fantasy sports operators in that they will have to pay an application fee and an annual permit fee, based on gross revenue, and a quarterly operations fee, based on revenue from participants in New Jersey.

Federal Standard Statement

A Federal standards analysis is not required because there are no Federal laws or standards applicable to the proposed new rules.

Jobs Impact

The Division does not believe that the proposed new rules will either increase or decrease the number of jobs in New Jersey.

Agriculture Industry Impact

The Division does not expect the proposed new rules to have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

Some fantasy sports operators may employ fewer than 100 individuals and these operators would be considered "small businesses" under the Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq.

The economic impact on small businesses will be the same as that imposed on all businesses as detailed in the Economic Impact above. The proposed new rules will require fantasy sports operators to employ the professional services of an accountant to perform a financial audit that must be submitted to the Division annually. The Division does not believe that fantasy sports operators will need to employ any additional professional services to comply with the requirements of the proposed new rules. The proposed new rules impose compliance, recordkeeping, and reporting requirements as detailed in the Summary above.

The proposed new rules will protect the welfare of individuals who participate in fantasy sports activities; therefore, no differing compliance requirements are provided to fantasy sports operators based upon the size of a business.

Housing Affordability Impact Analysis

The proposed new rules will have an insignificant impact on the affordability of housing in New Jersey and there is an extreme unlikelihood that the proposed new rules would evoke a change in the average costs associated with housing because the proposed new rules concern fantasy sports activities.

Smart Growth Development Impact Analysis

The proposed new rules will have an insignificant impact on smart growth and there is an extreme unlikelihood that the proposed new rules would evoke a change in housing production in Planning Areas 1 or 2 or, within designated centers, under the State Development and Redevelopment Plan in New Jersey because the proposed new rules concern fantasy sports activities.

Racial and Ethnic Community Criminal and Public Safety Impact
The Director has evaluated this rulemaking and determined that it will not have an impact on pretrial detention, sentencing, probation, or parole policies concerning adults and juveniles in the State. Accordingly, no further analysis is required.

Regulations

Full text of the proposal follows:
[page=2324] SUBCHAPTER 36.    FANTASY SPORTS OPERATORS
13:45A-36.1    Purpose and scope

The purpose of this subchapter is to implement the provisions of P.L. 2017, c. 231 (N.J.S.A. 5:20-1 et seq.), which regulate fantasy sports operators.

13:45A-36.2    Words and phrases defined

The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise:

"Applicant" means an individual or entity that applies for a permit to conduct fantasy sports activities.

"Award" means anything of monetary value provided to a participant due to the outcome of a fantasy sports activity. Award may include prizes, competition credits, merchandise, or admission to another competition.

"Casino" means a single room in which casino gaming is located pursuant to the provisions of the New Jersey Casino Control Act (P.L. 1977, c. 110).

"Division" means the Division of Consumer Affairs.

"Entry fee" means cash or a cash equivalent that is paid by a participant to a fantasy sports operator to participate in a fantasy sports activity offered by that operator, but shall not include a fee paid to an operator that does not offer a prize.

"Fantasy sports activity" means any fantasy or simulated activity or contest with an entry fee in which a participant owns or manages an imaginary team and competes against other participants or a target score for a predetermined prize with the outcome reflecting the relative skill of the participants and determined by statistics generated based on performance by actual individuals participating in actual competitions or athletic events, provided that the outcome shall not be based solely on the performance of an individual athlete, or on the score, point spread, or any performance of any single real team or combination of real teams. Fantasy sports activity shall not include any activity in which no entry fee is paid to the fantasy sports operator or in which a prize is not collected, managed, or awarded by the operator.

"Fantasy sports gross revenue" means, for each fantasy sports activity, the amount equal to the total of all entry fees that a fantasy sports operator collects from all participants less only the total of all prizes paid out as prizes to all participants multiplied by the location percentage for this State.

"Fantasy sports operator" or "operator" means a business entity, including a casino licensee or the holder of a permit to conduct a horse race meeting, that has been issued a permit by the Division of Consumer Affairs in the Department of Law and Public Safety to offer persons the opportunity to participate in a fantasy sports activity.

"Location percentage" means, for each authorized fantasy sports activity, the percentage rounded to the nearest one-tenth of one percent (0.1 percent) of the total entry fees collected from players located in this State, divided by the total entry fees collected from all players in the fantasy sports activity.

"Participant" means any person who takes part in a fantasy sports activity offered by a fantasy sports operator in New Jersey.

"Prize" means money paid to a participant due to the outcome of a fantasy sports activity.

"Prohibited participant" means an individual who has access to non-public confidential information about fantasy sports activities, any athlete whose performance may be used to determine the outcome of a fantasy sports activity in the sport with which the athlete is associated, any team employee, referee, or league official in a fantasy sports activity in the sport with which that person is associated, and any sports agent associated with any sport used for fantasy sports activities.

13:45A-36.3    Permission to provide fantasy sports activities for entities operating prior to August 24, 2017

1. A fantasy sports operator that was offering fantasy sports activities in New Jersey on August 24, 2017, shall be permitted to continue to provide fantasy sports activities until April 7, 2018.
2. A fantasy sports operator that is permitted to provide fantasy sports activities pursuant to (a) above and that applies for a permit prior to April 7, 2018, shall be able continue to offer fantasy sports activities while its application is pending with the Division.
3. A fantasy sports operator that does not qualify to offer fantasy sports pursuant to (a) above shall not provide, administer, manage, or otherwise make available fantasy sports activities until it has obtained a fantasy sports operator permit from the Division.

13:45A-36.4    Application for permit

1. An applicant for a fantasy sports operator permit shall submit to the Division:
2. A completed application, on a form provided by the Division;
3. Proof that the applicant maintains equipment pursuant to the requirements of N.J.A.C. 13:45A-36.5; and
4. The application fee as set forth in N.J.A.C. 13:45A-36.17.
5. If an application is approved by the Division, the applicant will be sent a permit activation form. Applicants shall submit a completed activation form and the permit fee as set forth in N.J.A.C. 13:45A-36.19 to the Division.

13:45A-36.5    Equipment used to conduct fantasy sports activities

1. If a fantasy sports operator is a casino, all of the equipment it uses to conduct fantasy sports activities shall be physically located within the boundaries of the municipality specified in section 20 of P.L. 2013, c. 27 (N.J.S.A. 5:12-95.22).
2. If a fantasy sports operator is not a casino, at least one server used to conduct fantasy sports activities shall be physically located within the boundaries of the municipality specified in section 20 of P.L. 2013, c. 27 (N.J.S.A. 5:12-95.22).
3. The Division shall have the authority to inspect the facilities of fantasy sports operators, including any servers maintained pursuant to (a) and (b) above.

13:45A-36.6    Conduct of fantasy sports activities

1. Fantasy sports operators shall conduct fantasy sports activities so that the outcome is determined by statistics generated based on the performance of actual individuals participating in real competitions or athletic events.
2. The outcome of fantasy sports activities shall not be based solely on the performance of an individual athlete or on the score, point spread, or any performance of a single real team or combination of real teams.
3. Awards offered to participants shall be established and disclosed in advance to all participants. The value of an award shall not be determined by the number of participants or the amount of entry fees paid by participants.
4. A fantasy sports operator shall not make any false statement or fail to disclose any information requested by the Division.

13:45A-36.7    Prohibited practices

1. A fantasy sports operator shall not:
2. Share statistical information with third parties that could affect a fantasy sports activity until that information is publicly available;
3. Allow a prohibited participant to participate in fantasy sports activities;
4. Provide any fantasy sports activities based on high school athletics; or
5. Allow a participant under the age of 18 years to participate in fantasy sports activities.

13:45A-36.8    Fairness of fantasy sports activity

1. A fantasy sports operator, its employees, officers, and directors shall not disclose proprietary or non-public information that may affect fantasy sports activities to any participant.
2. A fantasy sports operator shall not knowingly permit an athlete, sports agent, team employee, referee, or league official to provide proprietary or non-public information to any participant.
3. A fantasy sports operator shall prevent the following from being participants in fantasy sports activities offered by the fantasy sports operator:
4. Owners, directors, or officers of the fantasy sports operator;
5. Employees of the fantasy sports operator; and

[page=2325] 3. Individuals who regularly provide advice on gameplay to other participants pursuant to an agreement with a fantasy sports operator or a sponsorship with a fantasy sports operator.
13:45A-36.9    Administration of fantasy sports activities

1. Fantasy sports operators shall adopt procedures to ensure that prohibited participants and participants under the age of 18 years do not participate in fantasy sports activities. A fantasy sports operator shall refund any money held in an account created by a participant under the age of 18.
2. Fantasy sports operators shall offer individuals the ability to restrict themselves from participating in fantasy sports activities and take steps to prevent such individuals from participating in fantasy sports activities.
3. Fantasy sports operators shall establish a limitation on the number of entries an individual participant may submit for each fantasy sports activity, shall disclose this number of entries, and shall take steps to prevent a participant from exceeding that number.
4. Fantasy sports operators shall segregate participants' funds from operational funds.
5. Fantasy sports operators shall maintain a reserve in cash, cash equivalents, payment processor reserves, receivables, an irrevocable letter of credit, a bond, or combination thereof, in the amount of the deposits in participants' accounts, which the fantasy sports operator has no interest in, or title to, and which is:
6. At least equal to the sum of all funds held in participants' accounts and all awards owed or which will be owed for fantasy sports activities;
7. Protected from claims of the fantasy sports operator's creditors other than participants for whose benefit the reserve is established; and
8. If the reserve is maintained in the form of cash, cash equivalent, or an irrevocable letter of credit, it must be held or issued by a Federally insured financial institution. Reserves in the form of cash or cash equivalent must be established pursuant to a written agreement between the fantasy sports operator and a financial institution or insurance carrier, but the fantasy sports operator may engage an intermediary company or agent to deal with the financial institution or insurance carrier, in which event the reserve may be established pursuant to written agreements between the fantasy sports operator and the intermediary, and the intermediary and the financial institution or insurance carrier.
9. For the purposes of compliance with (d) and (e) above, fantasy sports operators may establish a special purpose segregated account that is maintained and controlled by a properly constituted corporate entity that is not the fantasy sports operator and whose governing board includes one or more corporate directors who are independent of the fantasy sports operator and of any corporation related to or controlled by the fantasy sports operator.
10. Annual audits
11. Fantasy sports operators shall contract with a licensed certified public accountant to perform a financial audit of the operator and submit the accountant's report to the Division annually.
12. The audit required by (a) above shall break down for each quarter:
13. Total entry fees for the fantasy sports operator;
14. Total prizes paid out by the fantasy sports operator;
15. Total entry fees paid by participants in New Jersey;
16. Amount in participant accounts for participants in New Jersey; and
17. A report on the reserves in cash, cash equivalents, payment processor reserves and receivables, and the irrevocable letter of credit, a bond, or a combination thereof, maintained pursuant to N.J.A.C. 13:45A-36.9(e) and (f).
18. Operations fee
19. Except as provided in (d) below, a fantasy sports operator shall pay to the Division, on a quarterly basis, an operations fee in an amount equal to 10.5 percent of fantasy sports gross revenue for each quarter. The operations fee will be deposited into the general fund of the State.
20. Operation fees will be due on April 20, July 20, October 20, and January 20.
21. Along with the operation fees, fantasy sports operators shall complete and submit the operation fee form provided by the Division.
22. A fantasy sports operator who solely operates a season-long single-sport fantasy sports activity, may estimate its quarterly operations fee based upon its fantasy sports gross revenue from the previous year. Such a fantasy sports operator would pay a quarterly operations fee that would be equal to 10.5 percent of fantasy sports gross revenue from the previous year divided by four.
23. A fantasy sports operator that seeks to pay an operations fee pursuant to (d) above shall notify the Division that it will be following the requirements of (d) above prior to payment of the operations fee.
24. A fantasy sports operator that pays an operations fee pursuant to (d) above and whose estimated quarterly payments for the first three quarters are greater than or less than the amount the fantasy sports operator would have owed if the operations fee was calculated pursuant to (a) above, shall adjust the payment for the fourth quarter to reflect the over- or underpayment of the operations fee.
25. Required policies
26. Fantasy sports operators shall establish policies that address:
27. Procedures to handle security incidents, including system failures, loss of service, breaches of confidentiality, and malicious intrusion. Such procedures shall address:
28. Analysis and cause of the security incident;
29. Containment;
30. Planning and implementation of corrective action to prevent recurrence;
31. Communication with New Jersey participants affected by or involved with recovery from the security incident; and
32. Reporting of the action to the Division.
33. Testing to ensure that the fantasy sports operator's platform meets or exceeds current industry standards;
34. Instituting a process to close out participant accounts that have not been used to engage in fantasy sports activities for three years;
35. Maintaining the security of identity and financial information of participants;
36. Preventing the following from being a participant in fantasy sports activities offered by the fantasy sports operator:
37. Owners, directors, or officers of the fantasy sports operator;
38. Employees of the fantasy sports operator; and
39. Individuals who regularly provide advice on gameplay to other participants pursuant to an agreement with a fantasy sports operator or a sponsorship with a fantasy sports operator;
40. Permitting parents or guardians to exclude individuals under the age of 18 from accessing any fantasy sports activity;
41. Determining the true identity, date of birth, and address of each individual seeking to open an account;
42. Using measures to detect the physical location of a participant attempting to access his or her account and to monitor for simultaneous logins to a single account from geographically inconsistent locations. Such measures shall:
43. Check location each time the player attempts to enter a contest or make a deposit; and
44. Utilize a mechanism to alert the fantasy sports operator if an account is being accessed from geographically inconsistent locations; and
45. Preventing advertisements in any publication or medium that is aimed exclusively at juveniles or advertising at any of the following:
46. Elementary schools;
47. High schools; or
48. Sports venues used exclusively for elementary school, high school, or student sports activities.
49. Participant complaint procedures
50. Fantasy sports operators shall develop procedures by which participants may file a complaint about any aspect of a fantasy sports activity. Fantasy sports operators shall notify participants as to complaint procedures.
51. Fantasy sports operators shall respond to participant complaints in writing within 10 business days of receipt of a complaint.
52. If the response to a complaint required by (b) above is that more information is needed, the form and nature of the necessary information shall be specifically stated. When additional information is received, further response shall be required within seven business days.

[page=2326] (d) Any complaints received by a fantasy sports operator from a participant and the response to the complaint shall be retained for at least seven years and made available to the Division upon request.

1. Records
2. Fantasy sports operators shall maintain records of:
3. Each fantasy sports activity offered, which shall include:
4. The date and time the fantasy sports activity started and ended;
5. Award structure used;
6. Participants that entered the fantasy sports activity;
7. Selections each game participant made for his or her team;
8. Total number of points earned by each participant's team;
9. Total amount of entry fees paid;
10. Results, including the points earned by the winning participant or participants;
11. Total amount of participants' winnings; and
12. Total amount of cash or cash equivalents awarded to participants.
13. A participant transaction log, which includes:
14. A unique participant identification;
15. All deposits to the participant's account;
16. All withdrawals by the participant; and
17. All cash or cash equivalents added to the participant's account.
18. Participant account information, which includes:
19. A unique participant identification;
20. Participant identity details, which include the participant's legal name, age, and address;
21. Any self-restrictions;
22. Any previous accounts; and
23. The date and location from which the participant account was registered.
24. All advertisements, including where such advertisements were placed. To the extent that an advertisement cannot be maintained in its original form, such as billboards, the advertising copy shall be retained.
25. Fantasy sports operators shall maintain all records required by (a) above for a period of at least seven years.
26. Fantasy sports operators shall provide records to the Division upon request.
27. Single account
28. A fantasy sports operator shall limit each participant to one active account and username.
29. A fantasy sports operator shall establish procedures to terminate accounts of any participant that establishes or seeks to establish more than one username or more than one account.
30. Prohibition on extensions of credit to game participants

A fantasy sports operator shall not extend credit to a participant for purposes of participating in a fantasy sports activity.

1. Player funds
2. A fantasy sports operator shall not allow a participant to transfer funds to any other participant.
3. After a participant's identity has been verified, a participant shall be allowed to withdraw funds maintained in his or her account, whether such account is opened or closed. Such requests must be honored within five business days of the request. For purposes of this section, a request for withdrawal will be considered honored if it is processed by the fantasy sports operator, notwithstanding a delay by a payment processor, credit card issuer, or the custodian of a financial account.
4. A fantasy sports operator shall not allow a participant's account to be overdrawn unless caused by payment processing issues outside of the control of the fantasy sports operator.
5. A fantasy sports operator may decline to honor a request to withdraw funds if the fantasy sports operator believes in good faith that the participant engaged in either fraudulent conduct or conduct that would put the fantasy sports operator in violation of the law. In such cases, the fantasy sports operator shall:
6. Provide notice to the participant of the nature of the investigation of the account; and
7. Conduct an investigation in a reasonable and expedient fashion, providing the participant additional written notice of the status of the investigation every 10th business day starting from the day the original notice was provided to the participant.
8. Renewal of permit
9. Fantasy sports operator permits shall be renewed annually.
10. Fantasy sports operators shall submit a renewal form and the permit fee as set forth in N.J.A.C. 13:45A-36.19 to the Division 45 days prior to the expiration date of the permit.
11. Fees
12. The Division shall charge the following non-refundable fantasy sports operator permitting fees: