Mich. Admin. Code R. 432.511

Current through Vol. 24-15, September 1, 2024

Section R. 432.511 - Definitions

Rule 511. As used in these rules:

(a) "Act" means the fantasy contests consumer protection act, 2019 PA 157, MCL 432.501 to 432.516.

(b) "Advertisement" means any notice, communication, or other dissemination of information to the public or individuals, whether by broadcasting, digital or online media, a fantasy contest platform, social media, publication, or any other means of dissemination, by or on behalf of a fantasy contest operator or licensed management company that is intended or designed to promote the fantasy contest business of the fantasy contest operator or licensed management company or solicit or entice fantasy contest players to enter or participate in fantasy contests offered by the fantasy contest operator or licensed management company. An advertisement includes a promotion and any promotional giveaways, games, and other similar activities.

(c) "Affiliate" means any of the following:

(i) A person that is a holding company, as that term is defined in section 2 of the act, MCL 432.502.

(ii) A corporation, firm, partnership, limited partnership, limited liability company, trust, or other form of business organization that is not an individual and that directly or indirectly does either of the following:

(A) Holds an ownership interest of 5% or more, as determined by the board, in a licensed management company or an applicant.

(B) Holds voting rights with the power to vote 5% or more of the outstanding voting rights of a licensed management company or an applicant.

(d) "Affiliate marketer" means a person involved in promoting, marketing, and directing business to a fantasy contest operator's or licensed management company's fantasy contest site that is compensated by or on behalf of the fantasy contest operator or licensed management company based on any of the following:

(i) The volume of customer referrals to the fantasy contest site.

(ii) Customer activity, including, but not limited to, number of fantasy contest player account registrations, number of depositing fantasy contest player account registrations, or fantasy contest entry activity.

(iii) Any combination of the compensation methods described in paragraph (i) to (ii) of this subdivision.

(e) "Agent" means any individual who is employed by any agency of this state, other than the board, the state police, or attorney general, and who is assigned to perform fulltime services on behalf of or for the benefit of the board regardless of the title or position held by that individual.

(f)"Applicant" means any person that applies for any license under the act and these rules.

(g) "Application" means all materials and information submitted to the board, including, but not limited to, the instructions, forms, and other documents required by the board, comprising a person's request for issuance or renewal of a license, approval of a transfer of ownership interest, or any other board action for which an application is required under the act and these rules.

(h) "Authorized script" means a script that is made readily available to all fantasy contest players through a fantasy contest platform and is incorporated as a feature of fantasy contests.

(i) "Auto draft" means a selection method in which a fantasy contest platform automatically selects a fantasy contest team for a fantasy contest player.

(j) "Beginning player" means a fantasy contest player who meets all of the following conditions:

(i) The fantasy contest player has entered fewer than 51 fantasy contests offered by a fantasy contest operator or licensed management company.

(ii) The fantasy contest player does not meet the definition of a highly experienced player.

(iii) The fantasy contest player is not classified as a highly experienced player by a licensed management company under R 432.532a(1).

(k) "Chairperson" means the chairperson of the Michigan gaming control board designated under the Michigan Gaming Control and Revenue Act, 1996 IL 1, MCL 432.201 to 432.226.

(l) "Conflict of interest" means a situation, relationship, or association in which the private interest of employees, agents, and contractors of the board may influence the judgment of the employee, agent, or contractor in the performance of his or her public duty under the act.

(m) "Contractor" means any individual not employed by this state who performs services on behalf of or for the benefit of the board and requires unescorted access to board facilities.

(n) "Executive director" means the executive director of the Michigan gaming control board, appointed under section 4 of the Michigan Gaming Control and Revenue Act, 1996 IL 1, MCL 432.204.

(o) "Fantasy contest operations" means the conduct of authorized fantasy contests by a fantasy contest operator or licensed management company.

(p) "Fantasy contest operator license" means a license issued by the board to a person to operate, carry on, conduct, maintain, expose, or offer for play fantasy contests and award prizes of value.

(q) "Fantasy contest player account" means an electronic ledger in which all of the following types of transactions relative to a fantasy contest player are recorded:

(i) Deposits and credits.

(ii) Withdrawals.

(iii)Entry fees.

(iv) Monetary value of prizes and awards.

(v) Service and other transaction-related charges authorized by the fantasy contest player, if any.

(vi) Adjustments to the account.

(r) "Fantasy contest player funds" means cash or cash equivalents owned by or owed to fantasy contest players, including all of the following except as otherwise provided in paragraph (iv) of this subdivision:

(i) Amounts held by a fantasy contest operator or licensed management company in fantasy contest player accounts, including pending withdrawals, but not including funds that have been withdrawn successfully by fantasy contest players.

(ii) Amounts accepted by a fantasy contest operator or licensed management company as entry fees for fantasy contests whose outcomes have not yet been determined.

(iii) Amounts owed to fantasy contest players but not yet paid by a fantasy contest operator or licensed management company as prizes or awards through the period established by the fantasy contest operator or licensed management company for honoring winning fantasy contest entries.

(iv) Fantasy contest player funds do not include amounts available to fantasy contest players for entry into fantasy contests that are not redeemable for cash.

(s)"Fantasy contest player session" means the period of time that a fantasy contest player is logged on to a fantasy contest platform.

(t) "Geolocation" means the identification of the real-world geographic location of a fantasy contest player.

(u) "In-state participant" means a participant located in this state at the time of paying an entry fee or otherwise entering a fantasy contest.

(v) "Institutional investor" means a person that is any of the following:

(i) A retirement fund administered by a public agency for the exclusive benefit of federal, state, or local public employees.

(ii) An employee benefit plan or pension fund that is subject to the employee retirement income security act of 1974, Public Law 93-406.

(iii) An investment company registered under the investment company act of 1940, 15 USC 80a-1 to 80a-64.

(iv) A collective investment trust organized by a bank under 12 CFR part 9.

(v) A closed end investment trust.

(vi) A chartered or licensed life insurance company or property and casualty insurance company.

(vii) A chartered or licensed financial institution.

(viii) An investment advisor registered under the investment advisers act of 1940, 15 USC 80b-1 to 80b-21.

(ix) Any other person that the board determines should be considered an institutional investor for reasons consistent with the act and these rules.

(w) "Key person" means any of the following:

(i) An individual who holds a 5% or greater ownership interest in an applicant or licensee or in shares of an applicant or licensee.

(ii) An individual who holds voting rights with the power to vote 5% or more of the outstanding voting rights of an applicant or licensee.

(iii) A director of an applicant or licensee.

(iv) A managerial employee of an applicant or licensee who performs the function of principal executive officer, principal operations officer, principal accounting officer, or an equivalent officer.

(v) An affiliate of an applicant or licensee.

(vi) A director of an affiliate of an applicant or licensee.

(vii) A managerial employee of an affiliate of an applicant or licensee who performs the function of principal executive officer, principal operations officer, principal accounting officer, or an equivalent officer.

(x) "Licensed management company" means a management company that is licensed by the board under the act and these rules.

(y) "Licensee" means a person that holds a fantasy contest operator license or management company license under the act and these rules. Licensee does not include a fantasy contest operator that is exempt from licensure pursuant to section 3(4) of the act, MCL 432.503.

(z) "Management company license" means a license issued by the board to a person to manage the day-to-day fantasy contest operations of a fantasy contest operator.

(aa) "Member" means a board member of the Michigan gaming control board appointed under the Michigan Gaming Control and Revenue Act, 1996 IL 1, MCL 432.201 to 432.226.

(bb) "Official" means any individual who officiates an athletic event and is responsible for enforcing the rules of the athletic event, including, but not limited to, a referee, umpire, or judge.

(cc) "Prohibited athletic event" means any of the following:

(i) Any event that is not a real-world professional, collegiate, or nationally recognized sports game, contest, or competition.

(ii) Any event that is or involves any of the following:

(A) A high school or youth sporting event.

(B) A randomized or historical event.

(C) A racing event involving animals.

(D) A game or contest ordinarily offered by a horse track or casino for money, credit, or any representative of value, including any races, games, or contests involving horses or that are played with cards or dice.

(E) A slot machine or other mechanical, electromechanical, or electronic device, equipment, or machine, including computers and other cashless wagering systems.

(F) Poker, blackjack, faro, monte, keno, bingo, fan tan, twenty one, seven and a half, Klondike, craps, chuck a luck, Chinese chuck a luck, Wheel of Fortune, Chemin de Fer, Baccarat, Pai Gow, Beat the Banker, Panguingui, roulette, or other banking or percentage games.

(G) Any other game or device authorized by the board under the Michigan Gaming Control and Revenue Act, 1996 IL 1, MCL 432.201 to 432.226.

(iii) Any event that does not involve the physical exertion and skill of the participating individual athletes.

(iv) Any event in which any participating individual athlete is not physically present at the location at which the event occurs.

(v) Any event in which the outcome of the event is not directly dependent on the performance of the participating individual athletes.

(vi) Other prohibited athletic events as determined by the board.

(dd) "Prohibited person" means any of the following:

(i) An individual who is less than 18 years of age.

(ii) A self-restricted individual.

(iii) An individual the board has determined must be excluded from participation in fantasy contests under R 432.532c.

(iv) Except as otherwise provided in R 432.513a(9) and R 432.532b(12), a member, the executive director, a board employee, or an agent.

(v) Other prohibited persons as determined by the board.

(ee) "Proposition selection" means a fantasy contest player choosing whether an identified instance or statistical achievement will occur, will be achieved, or will be surpassed.

(ff) "Proxy server" means a computer server or other technology that allows a person to disguise the geolocation of his or her computer or other device when accessing a fantasy contest platform.

(gg) "Publicly traded corporation" means any corporation or other legal entity regulated by the U.S. Securities and Exchange Commission under the securities exchange act of 1934, 15 USC 78a to 78qq, or securities act of 1933, 15 USC 77a to 77aa.

(hh) "Representative" means an individual who acts on behalf of a fantasy contest operator, licensed management company, applicant, or affiliate.

(ii) "Self-restricted individual" means an individual who is subject to an active self-restriction under R 432.532d.

(jj) "Sports governing body" means an organization that prescribes final rules and enforces codes of conduct for an athletic event and the participants in the athletic event.

(kk) "Strong authentication" means a method that effectively provides higher security than a username and password alone.

(ll) "Suspended account" means a fantasy contest player account that has been temporarily disabled from entering or participating in fantasy contests.

(mm) "Targeted advertisement" means an advertisement disseminated by or on behalf of a fantasy contest operator or licensed management company, or a promotional offer made by or on behalf of a fantasy contest operator or licensed management company, which is directed to an individual on the basis of specific criteria, such as being a member or former member of a rewards club or a participant in social games. Targeted advertisement does not include any of the following:

(i) Mass communication, including mailings or emails, made to an entire area or zip code or targeted list.

(ii) An advertisement that arrives in a packet of 5 or more non-gaming advertisements if the packet of advertisements is addressed to "resident," "occupant," or some similar wording and not to a specific individual.

(iii) Any "pop-up" advertisement that appears on an individual's computer or mobile device on the basis of his or her Internet Protocol (IP) Address.

(nn) "Third-party provider" means a person, other than a licensed management company, that provides fantasy contest operators or licensed management companies goods or services that directly affect the conduct of fantasy contests under the act.

Mich. Admin. Code R. 432.511

2023 MR 20, Eff. 10/11/2023