Second Regular Session S.B. 1515
COMMITTEE ON JUDICIARY
SENATE AMENDMENTS TO S.B. 1515
(Reference to printed bill)
Strike everything after the enacting clause and insert:
“Section 1. Section 13-3301, Arizona Revised Statutes, is amended to read:
13-3301. Definitions
In this chapter, unless the context otherwise requires:
1. "Amusement gambling" means gambling involving a device, game or contest which is played for entertainment if all of the following apply:
(a) The player or players actively participate in the game or contest or with the device.
(b) The outcome is not in the control to any material degree of any person other than the player or players.
(c) The prizes are not offered as a lure to separate the player or players from their money.
(d) Any of the following:
(i) No benefit is given to the player or players other than an immediate and unrecorded right to replay which is not exchangeable for value.
(ii) The gambling is an athletic event and no person other than the player or players derives a profit or chance of a profit from the money paid to gamble by the player or players.
(iii) The gambling is an intellectual contest or event, the money paid to gamble is part of an established purchase price for a product, no increment has been added to the price in connection with the gambling event and no drawing or lottery is held to determine the winner or winners.
(iv) Skill and not chance is clearly the predominant factor in the game and the odds of winning the game based upon chance cannot be altered, provided the game complies with any licensing or regulatory requirements by the jurisdiction in which it is operated, no benefit for a single win is given to the player or players other than a merchandise prize which has a wholesale fair market value of less than ten dollars or coupons which are redeemable only at the place of play and only for a merchandise prize which has a fair market value of less than ten dollars and, regardless of the number of wins, no aggregate of coupons may be redeemed for a merchandise prize with a wholesale fair market value of greater than five hundred fifty dollars.
2. "Conducted as a business" means gambling that is engaged in with the object of gain, benefit or advantage, either direct or indirect, realized or unrealized, but not when incidental to a bona fide social relationship.
3. "Crane game" means an amusement machine which is operated by player controlled buttons, control sticks or other means, or a combination of the buttons or controls, which is activated by coin insertion into the machine and where the player attempts to successfully retrieve prizes with a mechanical or electromechanical claw or device by positioning the claw or device over a prize.
4. “fantasy sports league competition” means any fantasy or simulated sports game or educational game or contest that involves a fantasy team that is not based on the current membership of an actual team that is a member of an amateur or professional sports organization and that meets the following conditions:
(a) all prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and the value of the prizes and awards is not determined by the number of participants or the amount of any fees paid by those participants.
(b) all winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals in multiple real world sporting or other events.
(c) a winning outcome is not based:
(i) on the score, point spread or performance of any single real world team or any combination of teams.
(ii) solely on any single performance of an individual athlete in any single real world sporting or other event.
4. 5. "Gambling" or "gamble" means one act of risking or giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill or a future contingent event but does not include fantasy sports league competitions or bona fide business transactions which are valid under the law of contracts including contracts for the purchase or sale at a future date of securities or commodities, contracts of indemnity or guarantee and life, health or accident insurance.
5. 6. "Player" means a natural person who participates in gambling.
6. 7. "Regulated gambling" means either:
(a) Gambling conducted in accordance with a tribal‑state gaming compact or otherwise in accordance with the requirements of the Indian gaming regulatory act of 1988 (P.L. 100-497; 102 Stat. 2467; 25 United States Code sections 2701 through 2721 and 18 United States Code sections 1166 through 1168); or
(b) Gambling to which all of the following apply:
(i) It is operated and controlled in accordance with a statute, rule or order of this state or of the United States.
(ii) All federal, state or local taxes, fees and charges in lieu of taxes have been paid by the authorized person or entity on any activity arising out of or in connection with the gambling.
(iii) If conducted by an organization which is exempt from taxation of income under section 43‑1201, the organization's records are open to public inspection.
(iv) Beginning on June 1, 2003, none of the players is under twenty‑one years of age.
7. 8. "Social gambling" means gambling that is not conducted as a business and that involves players who compete on equal terms with each other in a gamble if all of the following apply:
(a) No player receives, or becomes entitled to receive, any benefit, directly or indirectly, other than the player's winnings from the gamble.
(b) No other person receives or becomes entitled to receive any benefit, directly or indirectly, from the gambling activity, including benefits of proprietorship, management or unequal advantage or odds in a series of gambles.
(c) Until June 1, 2003, none of the players is below the age of majority. Beginning on June 1, 2003, none of the players is under twenty-one years of age.
(d) Players "compete on equal terms with each other in a gamble" when no player enjoys an advantage over any other player in the gamble under the conditions or rules of the game or contest.
Sec. 2. Section 13-3301, Arizona Revised Statutes, as amended by section 1 of this act, is amended to read:
13-3301. Definitions
In this chapter, unless the context otherwise requires:
1. "Amusement gambling" means gambling involving a device, game or contest which is played for entertainment if all of the following apply:
(a) The player or players actively participate in the game or contest or with the device.
(b) The outcome is not in the control to any material degree of any person other than the player or players.
(c) The prizes are not offered as a lure to separate the player or players from their money.
(d) Any of the following:
(i) No benefit is given to the player or players other than an immediate and unrecorded right to replay which is not exchangeable for value.
(ii) The gambling is an athletic event and no person other than the player or players derives a profit or chance of a profit from the money paid to gamble by the player or players.
(iii) The gambling is an intellectual contest or event, the money paid to gamble is part of an established purchase price for a product, no increment has been added to the price in connection with the gambling event and no drawing or lottery is held to determine the winner or winners.
(iv) Skill and not chance is clearly the predominant factor in the game and the odds of winning the game based upon chance cannot be altered, provided the game complies with any licensing or regulatory requirements by the jurisdiction in which it is operated, no benefit for a single win is given to the player or players other than a merchandise prize which has a wholesale fair market value of less than ten dollars or coupons which are redeemable only at the place of play and only for a merchandise prize which has a fair market value of less than ten dollars and, regardless of the number of wins, no aggregate of coupons may be redeemed for a merchandise prize with a wholesale fair market value of greater than five hundred fifty dollars.
2. "Conducted as a business" means gambling that is engaged in with the object of gain, benefit or advantage, either direct or indirect, realized or unrealized, but not when incidental to a bona fide social relationship.
3. "Crane game" means an amusement machine which is operated by player controlled buttons, control sticks or other means, or a combination of the buttons or controls, which is activated by coin insertion into the machine and where the player attempts to successfully retrieve prizes with a mechanical or electromechanical claw or device by positioning the claw or device over a prize.
4. “Fantasy sports league competition” means any fantasy or simulated sports game or educational game or contest that involves a fantasy team that is not based on the current membership of an actual team that is a member of an amateur or professional sports organization and that meets the following conditions:
(a) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and the value of the prizes and awards is not determined by the number of participants or the amount of any fees paid by those participants.
(b) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals in multiple real world sporting or other events.
(c) A winning outcome is not based:
(i) On the score, point spread or performance of any single real world team or any combination of teams.
(ii) Solely on any single performance of an individual athlete in any single real world sporting or other event.
5. 4. "Gambling" or "gamble" means one act of risking or giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill or a future contingent event but does not include fantasy sports league competitions or bona fide business transactions which are valid under the law of contracts including contracts for the purchase or sale at a future date of securities or commodities, contracts of indemnity or guarantee and life, health or accident insurance.
6. 5. "Player" means a natural person who participates in gambling.
7. 6. "Regulated gambling" means either:
(a) Gambling conducted in accordance with a tribal‑state gaming compact or otherwise in accordance with the requirements of the Indian gaming regulatory act of 1988 (P.L. 100-497; 102 Stat. 2467; 25 United States Code sections 2701 through 2721 and 18 United States Code sections 1166 through 1168); or
(b) Gambling to which all of the following apply:
(i) It is operated and controlled in accordance with a statute, rule or order of this state or of the United States.
(ii) All federal, state or local taxes, fees and charges in lieu of taxes have been paid by the authorized person or entity on any activity arising out of or in connection with the gambling.
(iii) If conducted by an organization which is exempt from taxation of income under section 43‑1201, the organization's records are open to public inspection.
(iv) Beginning on June 1, 2003, none of the players is under twenty‑one years of age.
8. 7. "Social gambling" means gambling that is not conducted as a business and that involves players who compete on equal terms with each other in a gamble if all of the following apply:
(a) No player receives, or becomes entitled to receive, any benefit, directly or indirectly, other than the player's winnings from the gamble.
(b) No other person receives or becomes entitled to receive any benefit, directly or indirectly, from the gambling activity, including benefits of proprietorship, management or unequal advantage or odds in a series of gambles.
(c) Until June 1, 2003, none of the players is below the age of majority. Beginning on June 1, 2003, none of the players is under twenty-one years of age.
(d) Players "compete on equal terms with each other in a gamble" when no player enjoys an advantage over any other player in the gamble under the conditions or rules of the game or contest.
Sec. 3. Legislative findings
The legislature finds and declares that:
1. A fantasy sports league competition is any fantasy or simulated sports game or educational game or contest that involves a fantasy team that is not based on the current membership of an actual team that is a member of an amateur or professional sports organization and that meets the following conditions:
(a) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and the value of the prizes and awards is not determined by the number of participants or the amount of any fees paid by those participants.
(b) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals in multiple real world sporting or other events.
(c) A winning outcome is not based:
(i) On the score, point spread or performance of any single real world team or any combination of teams.
(ii) Solely on any single performance of an individual athlete in any single real world sporting or other event.
2. Under the unlawful internet gambling enforcement act of 2006, 31 United States Code section 5362(1)(E)(ix), a fantasy sports league competition is expressly exempt from the definition of “bet of wager”.
3. A fantasy sports league competition is legal in nearly every state. Millions of Americans compete in fantasy sports league competitions.
4. Fantasy sports league competitions have operated in this state since the 1990s, providing business and fan opportunities. The legislature has never considered fantasy sports league competitions to be a form of gambling. Were fantasy sports league competitions a form of gambling, they would be subject to significant regulation.
5. Confusion has surrounded the legal status of fantasy sports league competitions in this state, causing fantasy sports league competitions in this state to operate in a legal gray zone or not at all, depriving residents of this state of opportunities to compete for prizes in fantasy sports league competitions that are available to individuals in nearly every other state, and depriving this state of business opportunities, business investment and tax revenue.
6. In 1998, an advisory opinion by the attorney general, Ariz. Att’y Gen. Op. I98-002, concluded that a fantasy sports league competition is not a form of amusement gambling, which created legal uncertainty. An attorney general opinion does not have the force of the law, and in this case, did not reflect the intent of the legislature that a fantasy sports league competition is not a form of gambling.
7. Fantasy sports league competitions have never been subject to gambling restrictions in this state. Fantasy sports league competitions and individuals participating in them should not be subject to legal uncertainty. Rather, the leagues should operate within an appropriate consumer protection regulatory framework.
Sec. 4. Mandatory dispute resolution; arbitration
If this state receives a notice pursuant to compact section 3 (i) of section 5-601.02, Arizona Revised Statutes, that alleges section 13-3301, Arizona Revised Statutes, as amended by section 1 of this act, constitutes a change in state law that permits a gambling activity that was not authorized by law before May 1, 2002, this state shall submit the dispute to dispute resolution and request arbitration under compact section 15 of section 5-601.02, Arizona Revised Statutes.
Sec. 5. Conditional enactment; notice
A. Section 13-3301, Arizona Revised Statutes, as amended by section 2 of this act, does not become effective unless on or before December 31, 2026, a court of competent jurisdiction or an arbitrator who is authorized pursuant to section 15 of section 5-601.02, Arizona Revised Statutes, finds that section 13-3301, Arizona Revised Statutes, as amended by section 1 of this act, constitutes a change in state law that permits a gambling activity that was not authorized by law before May 1, 2002.
B. The attorney general shall notify in writing the director of the Arizona legislative council on or before January 15, 2027 either:
1. Of the date on which the condition was met.
2. That the condition was not met.”
Amend title to conform