N.J. Admin. Code § 13:45A-36.9

Current through Register Vol. 56, No. 21, November 4, 2024

Section 13:45A-36.9 - Administration of fantasy sports activities

(a) 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.

(b) 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.

(c) 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.

(d) Fantasy sports operators shall either segregate participants' funds from operational funds or 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 participant' accounts, which the fantasy sports operator has no interest in, or title to, and which is:

1. At least equal to the sum of all funds held in participants' accounts and all prizes owed or which will be owed for fantasy sports activities;

2. Protected from claims of the fantasy sports operator's creditors other than participants for whose benefit the reserve is established; and

3. 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.

(e) For the purposes of compliance with (d) 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.

N.J. Admin. Code § 13:45A-36.9

Adopted by 51 N.J.R. 1764(a), effective 12/2/2019