10 Del. Admin. Code § 301-3.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 301-3.0 - Application Requirements

3.1 Each person or entity desiring to register as an interactive fantasy sports registrant shall submit a registration application to the Commission on the form provided by the Commission. The registration application must include:

3.1.1 The full name, principal and address of the applicant.

3.1.2 Doing Business As/Trade As Name

3.1.3 Date enterprise established

3.1.4 Place enterprise established

3.1.5 Website address

3.1.6 The applicant must identify a person to be contacted regarding the application, and documentation designating such person as having the authority to act on the applicant's behalf if the applicant is a corporation or business entity.

3.1.7 If applicant is a corporation, the name of the state in which incorporated and the full names, date of birth, addresses and percentage of ownership of any partner, officer, director, shareholders holding a ten percent or more equity, and ultimate equitable owners, as well as:

3.1.7.1 A copy of a certificate of good standing issued by the state in which applicant is incorporated;

3.1.7.2 A copy of applicant's articles of incorporation;

3.1.7.3 A copy of applicant's by-laws or other documentation establishing the day to day operating rules of the applicant;

3.1.7.4 A copy of the organizational chart, including job titles and names of persons holding such jobs; and

3.1.7.5 A description of the nature, type, terms, conditions, rights and privileges of voting, non-voting, and other stock issued or to be issued by the applicant that exceed ten percent, including the number of shares of each class of stock authorized or to be authorized and the number of shares of each class of stock outstanding as of the date of the application. If the rights of holders of any class of stock may be modified other than by vote of a majority or more of the outstanding shares so affected, voting as a class, an explanation thereof.

3.1.8 If applicant is a business entity other than a corporation, the full names and addresses of the principals, partners, members, and other types of equity owners holding five percent or more equity, and ultimate equitable owners, as well as:

3.1.8.1 A copy of a certificate of good standing issued by the state in which applicant is operating;

3.1.8.2 A copy of documents establishing the existence of applicant as a business entity, such as a partnership agreement or trust agreement;

3.1.8.3 A copy of applicant's by-laws or other documentation establishing the day to day operating rules of the applicant; and

3.1.8.4 A copy of applicant's organizational chart, including job titles and names of persons holding such positions.

3.1.8.5 A description of the nature, type, terms, conditions, rights and privileges of voting, non-voting, and other ownership interests issued or to be issued by applicant that exceed ten percent.

3.1.9 Provide documentation verifying applicant completed and remitted to the Division of Revenue the State of Delaware Form CRA (Combined Registration Application for State of Delaware Business License and/or Withholding Agent). This form can be found at the following link:http://revenue.delaware.gov/services/current_bt/cra.pdf.

3.1.10 A statement indicating whether applicant files information and reports with the United States Securities and Exchange Commission as required by section thirteen ( 15 U.S.C. § 78 m) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a- 78qq, or whether the securities of applicant are regularly traded on an established securities market in the United States.

3.1.11 A statement of the type and estimated number of contests to be conducted by applicant annually. Also include a statement of the type and number of contests conducted by applicant for the previous three years.

3.1.12 Disclosure of every platform applicant will use.

3.1.13 List of all physical locations that are owned or leased by applicant and from which the applicant conducts business. For each location, please include the full corporate/subsidiary name, physical address, city state, zip code, country and a summary of what business is conducted at each of these locations.

3.1.14 Specify where applicant maintains its business and financial records.

3.1.15 Provide a list of all aliases/business names used by applicant to conduct business, provide time periods during which the aliases/business names were used by the enterprise and if applicable, the state of incorporation.

3.1.16 Provide the names and addresses of contractors and vendors used by applicant to conduct interactive fantasy sports contests.

3.1.17 Provide an explanation detailing the facts and circumstances if in the past ten years, applicant has been party to any material acquisition, reorganization, merger, consolidation, readjustment or succession of its business.

3.1.18 Identify applicant's designated agent in Delaware.

3.1.18.1 If no such agent is designated, the applicant shall be deemed to have designated the Director of the Delaware Division of Gaming Enforcement.

3.1.19 A statement of the assets and liabilities of applicant, including:

3.1.19.1 An audited financial statement that shall include an income statement, balance sheet, statement of cash flows, and all notes to such statements and related financial schedules for the fiscal year preceding the application.

3.1.19.1.1 If applicant does not normally have its financial statement audited, all unaudited financial statements prepared in the three years preceding the application.

3.1.19.2 Copies of all final reports submitted in the three years preceding the application by any independent auditor for applicant.

3.1.19.3 Copies of all of the applicant's financial statements prepared in the three years preceding the application, and any exceptions taken to such statements, and any management response thereto.

3.1.19.4 For each company in which the applicant holds stock, the name, address, type of stock held, purchase price per share, number of shares held, and whether the percentage of shares held constitutes 5% or more ownership in the company.

3.1.19.5 For those liabilities exceeding $100,000 the Director may, at his or her discretion, require applicant to provide the full names and addresses of the officers and directors of any creditor of the applicant, and of those stockholders, members, partners, or other equity holders who hold more than ten percent of the stock, interest, or equity of the creditor.

3.1.19.6 Copies of all 1120 forms (U.S. Corporate Income Tax Return), 1120S forms (U.S. Income Tax Return for an S Corporation) or all 1065 forms (U.S. Partnership Return) for the three years preceding the application, including copies of all Schedules and Attachments.

3.1.19.7 The Director may request additional financial information and/or additional financial documentation, within his or her discretion.

3.1.20 A statement of every other jurisdiction in which applicant is or has been licensed or registered to conduct interactive fantasy sports contests. For each jurisdiction in which applicant is currently licensed by an organization, a certificate of good standing or other such documentation from the jurisdiction verifying applicant's status must be included in the application.

3.1.20.1 If applicant has been denied a license to conduct interactive fantasy sports contests or suspended from conducting interactive fantasy sports contests or otherwise sanctioned for the operating of interactive fantasy sports contests in any jurisdiction, state which jurisdiction and provide explanation.

3.1.20.2 Applicant must execute a notarized release permitting any government agency who regulates interactive fantasy sports contests to release information to the Commission.

3.1.21 Disclosure of whether applicant has ever been delinquent in the payment of any debt or tax owed to a government agency in the past 10 years and if so, an explanation.

3.1.22 Disclosure of any judgment, order, consent decree, or consent order pertaining to any violation or alleged violation of the federal anti-trust, trade regulations, or securities law, or similar law of any state, province, or country, entered against applicant.

3.1.23 Disclosure of any civil lawsuits, excluding divorce or child custody proceedings, to which applicant or any person identified in the response to the information required by subsections 3.1 .2 or 3.1.3 has been a defendant within the 10 years preceding the application, including the name and address of the court involved, the date, and disposition of such lawsuit.

3.1.24 Disclosure of any petition filed by applicant or any person identified in the response to the information required by subsections 3.1 .2 or 3.1.3, or whether an applicant or any person identified in the response to the information required by subsections 3.1 .2 or 3.1.3 has sought relief under, any provision of the federal Bankruptcy Act, or under any state insolvency law, filed by or against the applicant in the ten year period preceding the application.

3.1.25 Disclosure of any receiver, fiscal agent, trustee, reorganization trustee, or similar officer appointed by any court in the ten year period preceding the application for applicant or its parent, holding, intermediary, or subsidiary companies.

3.1.26 Applicant shall provide the following information and documents concerning operational compliance:

3.1.26.1 Applicant's policies for limiting each player to one continuous and active account.

3.1.26.2 Information regarding verification of identity. A copy of the policies adopted to verify the identity of players seeking to establish accounts.

3.1.26.3 Policies related to the prevention of minor participation in interactive fantasy sports contests.

3.1.26.4 Policies related to advertisements, including applicant's policies and procedures related to accurate representations concerning chances of winning and the number of persons winning.

3.1.26.5 Policies related to assistance available to those authorized players that exhibit compulsive play behavior.

3.1.26.6 Policies relating to implementation and enforcement of self-exclusions requested by authorized players.

3.1.26.7 Policies related to protection of authorized players' deposits, including the following:

3.1.26.7.1 Prevention of unauthorized withdrawals from player accounts by registrant;

3.1.26.7.2 Reporting and responding to complaints by an authorized player regarding the handling of the authorized player's account; and

3.1.26.7.3 Closure of authorized player accounts.

3.1.26.8 Policies related to account monitoring to prevent misuse of accounts, including policies related to the following:

3.1.26.8.1 Detection and prevention of misuse of proxy servers;

3.1.26.8.2 Location verification; and

3.1.26.8.3 Prevention of third-party scripts or scripting programs.

3.1.26.9 Policies related to the prevention of unauthorized play by prohibited players.

3.1.26.10 Information and documentation regarding either the current trust holding authorized players' funds or the current special purpose segregated account required by subsection 9.5.1.

3.1.26.11 Policies related to cybersecurity.

3.1.27 The application shall be signed by an officer or director, member, or partner, as applicable in accordance with the fantasy sports operator's business structure and must include an affirmation that the information submitted on this application is true and correct.

3.2 The Director may, at his or her discretion, waive the production of any documents required in Section 3.0 as long as it does not pose a threat to the effective regulation of interactive fantasy sports contests.

3.3 Application Review

3.3.1 An application may be denied, if the Director determines, after a hearing:

3.3.1.1 That an applicant has knowingly made a false statement of material fact or has deliberately failed to disclose any information required;

3.3.1.2 That an applicant had a registration or license to offer or conduct contests denied, suspended, or revoked in any other state or country for just cause;

3.3.1.3 That an applicant has legally defaulted in the payment of any obligation or debt due to any federal, state or municipality;

3.3.1.4 That an applicant knowingly fails to comply with any requirement of 29 Del.C.Ch. 48, Subchapter III, these regulations, or any other requirements of the Director; or

3.3.1.5 That the granting of such application would be inconsistent with the public trust or with the integrity of interactive fantasy sports generally.

10 Del. Admin. Code § 301-3.0

21 DE Reg. 499 (12/1/2017) (Final)