16-633-35 Me. Code R. § 1

Current through 2025-02, January 8, 2025

Section 633-35-1

An applicant for a license to act as a fantasy contest operator shall apply on forms specified by the director. In addition to the information required by 8 M.R.S. sections1103 - 1104, an applicant must provide the following information:

1. The physical address of the applicant's principal place of business and the designated contact person for the applicant including a telephone number, address and email address for that contact.

2. Disclosure of ownership interests. A disclosure of the true ownership interests of the fantasy contest operator as follows:

A. The names, addresses, phone numbers, email addresses and dates of birth of the applicant's directors and officers.

B. The percentages of shares of stock, if any, held by each person named in paragraph A above.

C. For limited liability companies (hereinafter, "LLC"), including professional LLCs, provide the full name, address, date of birth and telephone number of each member of the LLC having an ownership interest of five percent (5%) or more of the LLC. If the member is not a natural person, disclose the true ownership of the member (and successive levels of ownership, if necessary) until a natural person or another corporate entity is disclosed. If another corporate entity is disclosed, provide a complete disclosure of that corporate entity's ownership in accordance with the specific rules for that entity contained herein (and successive levels of ownership, if necessary).

D. For general, limited, or limited liability partnerships, provide the full name, address, date of birth and telephone number of each partner having an ownership interest of five percent (5%) or more of the partnership. If the partner is not a natural person, disclose the true ownership of the partner (and successive levels of ownership if necessary) until a natural person, or another corporate entity, is disclosed. If another corporate entity is disclosed, provide a complete disclosure of that corporate entity's ownership in accordance with the specific rules for that entity contained herein (and successive levels of ownership, if necessary).

E. For a corporation, provide the full name, address, date of birth and telephone number of any natural person or entity having an ownership interest of five percent (5%) or more of the outstanding shares of the corporation. If a corporate entity is disclosed, provide a complete disclosure of that corporate entity's ownership in accordance with the specific rules for that entity contained herein (and successive levels of ownership, if necessary).

F. The intent of this rule is to require, to the fullest extent that the individual or corporate structure of an applicant allows, disclosure of names of individual natural persons who have a significant ownership interest in a fantasy contest operator.

3. Copies of the applicant's audited financial statements for the preceding three (3) fiscal years and a copy of internally prepared financial statements for the current fiscal year as of the close of the most recent fiscal quarter;

4. A copy of the Certificate of Authority to do business in the State of Maine, if incorporated outside of Maine;

5. Copies of any trade name registrations filed by the applicant;

6. Completed notarized affirmation and consent and authorization to release information to complete a criminal background check on: the applicant; any officer or director of the applicant; and any partner or shareholder who has an ownership interest of five percent (5%) or more in the fantasy contest operator or who is involved in the day to day management of fantasy contests and operations;

7. A copy of the minimum internal controls adopted to verify the identity of individuals seeking to establish accounts;

8. The applicant's minimum internal controls related to protection of fantasy contestant deposits, including minimum internal controls related to the following:

A. Prevention of unauthorized withdrawals from fantasy contestant accounts by fantasy contest operators or others;

B. Reporting and responding to complaints by a fantasy contestant regarding the handling of the fantasy contestant account; and

C. Closure of fantasy contestant accounts.

9. The applicant's minimum internal controls related to account monitoring to prevent cheating, manipulation or misuse of accounts, including minimum internal controls related to the following:

A. Detection and prevention of misuse of proxy servers;

B. Location verification;

C. Prevention of the use of unauthorized 3^rd party scripts; and

D. Prevention of the use of pre-selected teams.

10. The applicant's minimum internal controls relating to fantasy contests for beginner fantasy contestants, including minimum internal controls related to the following:

A. Explanation of contest play;

B. Identification of highly experienced fantasy contestants, including symbols or other identification used;

C. Recommending beginner-fantasy-contestant-only contests and low-cost private contests;

D. Percentage of contests open only to beginner fantasy contestants and that exclude highly experienced fantasy contestants;

E. Prevention of access by highly experienced fantasy contestants to contests for beginner fantasy contestants directly or through a proxy; and

F. Suspension of accounts of highly experienced fantasy contestants who participate in contests for beginner fantasy contestants only.

11. The applicant's minimum internal controls relating to the locking of or making any changes to fantasy contests;

12. The applicant's minimum internal controls relating to ensuring that winning outcomes of fantasy contests reflect the relative knowledge and skill of the fantasy contestant and that winning outcomes of fantasy contests are determined primarily by accumulated statistical results of the performance of human competitors in sports events;

13. The applicant's minimum internal controls relating to not allowing the deposit of funds into an account that is derived from the extension of credit by affiliates or agents of the fantasy contest operator. For purposes of this subsection, credit shall not be deemed to have been extended where, although funds have been deposited into an account, the operator is awaiting actual receipt of such funds in the ordinary course of business;

14. The applicant's minimum internal controls that:

A. Make clear that the funds in the segregated account do not belong to the fantasy contest operator and are not available to creditors other than the fantasy contestant whose funds are being held;

B. Prevent commingling of funds in the segregated account with other funds including, without limitation, funds of the operator;

C. Disclose the number of entries that a fantasy contestant may submit to each fantasy contest and provide reasonable steps to prevent fantasy contestants from submitting more than the allowable number;

D. Prohibit fantasy contestants from submitting more than one entry in any fantasy contest involving 12 entries or fewer;

E. Prohibit fantasy contestants from submitting more than 2 entries in any fantasy contest involving more than 12 entries but fewer than 36 entries;

F. Prohibit fantasy contestants from submitting more than 3 entries in any fantasy contest involving 36 or more entries but fewer than 101 entries;

G. Prohibit, unless otherwise provided by M.R.S. Title 8, Chapter 33, fantasy contestants from submitting more than 3% of all entries in any fantasy contest involving more than 100 entries;

H. Permit unlimited entries in no more than 3% of all fantasy contests; the entry fee for such contests must be a minimum of $150;

I. Inform fantasy contestants of state and federal tax obligations on certain winnings;

J. Include policies and procedures relating to assistance available for compulsive behavior; and

K. Include policies and procedures relating to implementation and enforcement of self-limitations and self-exclusions requested by fantasy contestants.

16-633 C.M.R. ch. 35, § 1