Current through Register Vol. 47, No. 5, March 10,
2024
BASIS AND PURPOSE FOR RULE 2
The purpose of Rule 2 is to enable applications and licensure
as related to fantasy contest providers, including to establish and provide the
specific information required on license applications, renewals, and license
fees for each type of license. The statutory basis for Rule 2 is found in
sections 24-4-105(11),
C.R.S., 44-30-203(2)(a.5), C.R.S., 44-30-1605, C.R.S., 44-30-1606, 44-30-1607,
C.R.S., and Part 16 of Article
30 of Title
44.
2.1
Categories.
(1) The Division has two categories of
fantasy contest operators based on the number of active patrons.
(a) Small fantasy contest operators.
(i) Small fantasy contest operators have
7,500 or fewer active patron accounts over the preceding 365 days.
(ii) Small fantasy contest operators are
required to apply for registration with the Division.
(b) Fantasy contest operators.
(i) Fantasy contest operators have more than
7,500 active patron accounts over the preceding 365 days.
(ii) Fantasy contest operators are required
to apply for licensure with the Division.
(2) Small fantasy contest operator
registrations and fantasy contest operator licenses will expire on July 31 and
not exceed a two-year period.
(3)
The fee for registration and licensure shall be the following:
(a) Small fantasy contest operator
registration:
(i) Initial application fee
$350.
(ii) Renewal fee
$350.
(b) Fantasy
contest operator license:
(i) Initial
application fee $15,000.
(ii)
Renewal fee $15,000.
2.2
Application for
registration.
(1) Registrant Name
(a) Registrants shall not operate as a small
fantasy contest operator using a name that has not been provided to the
Director.
(b) If a registrant
operates as a small fantasy contest operator under a trade name, such trade
name must be filed with the Colorado Secretary of State pursuant to section
7-71-101, C.R.S.
(c) All names under which a registrant
operates as a small fantasy contest operator (including business, assumed, or
trade names) shall be provided to the Director.
(2) A small fantasy contest operator must
apply for registration with the Division. An applicant for registration must:
(a) Submit a completed application for
registration on a form and in a manner approved by the Division.
(b) Submit with the application all fees
established by the Director.
(c)
Submit documentation validating the number of fantasy contest players in
Colorado with active patron accounts. The number of said patrons shall not
exceed 7,500, pursuant to section
44-30-1603(7),
C.R.S. The documentation shall comprise customer base data from the 365 days
preceding the date of application submission.
(d) Submit detailed information about the
nature and type of fantasy contests to be offered by the applicant and the
utilization of statistics with examples of all information and materials to be
provided to contestants.
(e) Submit
additional information as may be requested by the Division to evaluate the
applicant's qualification for registration. An application submitted without
the required fees and documentation will be considered incomplete.
(3) If a registered small fantasy
contest operator at any time exceeds 7,500 active patron accounts, the fantasy
contest operator must apply for licensure. The applicant must notify the
Division within twenty (20) days of exceeding 7,500 active patron accounts, and
shall have forty five (45) days from notifying the Division to submit an
application for licensure. If, after licensure, the fantasy contest operator
drops below 7,500 active patron accounts, the applicant may submit an
application for registration at the time of renewal instead of renewing
licensure.
2.3
Application for licensure.
(1)
Licensee Name
(a) Licensees shall not operate
as a fantasy contest operator using a name that has not been provided to the
Director.
(b) If a licensee
operates as a fantasy contest operator under a trade name, such trade name must
be filed with the Colorado Secretary of State pursuant to section
7-71-101, C.R.S.
(c) All names under which a licensee operates
as a fantasy contest operator (including business, assumed, or trade names)
shall be provided to the Director.
(2) A fantasy contest operator that has more
than 7,500 active patron accounts in Colorado, must apply for licensure with
the Division. An applicant for licensure must:
(a) Submit a completed application for
licensure on a form and in a manner approved by the Director;
(b) Submit with the application all fees
established by the Director;
(c)
Attest to the validity of the information listed on the application;
(d) Submit a written oath or affirmation on
the form and in the manner prescribed by the Director;
(e) Submit the information required by
section 44-30-1606(2)(c),
C.R.S.
(f) Submit detailed
information about the nature and type of fantasy contests to be conducted by
the applicant and the utilization of statistics with examples of all
information and materials to be provided to contestants.
(g) Submit additional information as may be
requested by the Director to evaluate the applicant's qualification for
licensure. An application submitted without the required fees and documentation
will be considered incomplete.
(3) If a fantasy contest operator drops below
7,500 active patron accounts in Colorado, the applicant may submit an
application for registration as a small fantasy contest operator instead of
renewing licensure.
2.4
Renewal and reinstatement of registration or licensure.
(1) Fantasy contest providers must submit
renewal applications for registration or licensure renewal to the Division at
least forty-five (45) days prior to the respective registration or license
expiration date.
(2) An applicant
for registration and license renewal must:
(a)
Submit a completed, signed application for registration or licensure renewal on
a form and in a manner approved by the Division;
(b) Submit the results of the annual
independent audit and/or internal controls review, conducted pursuant to
section 44-30-1607(2),
C.R.S.;
(i) The audit may be an annual
financial audit of the operator's previous fiscal year-end financial statements
by an independent certified public accountant; or
(ii) The audit may be an annual compliance
attestation completed by an independent certified public accountant or other
professional service provider authorized by the Director to verify compliance
with the part 16, article
30, title
44, C.R.S., and the Rules and
Regulations promulgated thereunder.
(c) Submit the aggregate amount of money paid
by Colorado patrons in entry fees to fantasy contests over the previous
calendar year; and,
(d) Submit all
fees established by the Director.
(3) If an applicant fails to submit their
completed renewal application when due, the applicant shall not be considered
to have made a timely and sufficient application for renewal, as such term is
used in section
24-4-104(7),
C.R.S., and the license or registration shall expire.
(a) The applicant shall cease operations
until their registration or license has been reinstated.
(b) The applicant may be subject to
administrative action.
(4) In order to reinstate an expired
registration or license, an applicant must:
(a) Submit a completed application for
reinstatement on a form and in a manner approved by the Director;
(b) Submit an independent audit to ensure
compliance with part 16 as required by 44-30-1607(2), C.R.S.;
(c) Submit all fees established by the
Director; and
(d) Adhere to any
administrative action imposed by the Director.
(5) If a fantasy contest provider chooses not
to renew their license or registration, the fantasy contest provider will not
be allowed to reapply for a license or registration for a period of one year
unless in addition to a new application, the requirements set forth in (2)(b)
and (2)(c) of this regulation 2.4 are met.
2.5
Untrue statements.
(1) An applicant for fantasy contest operator
license or small fantasy contest registration shall not make any false
statements or fail to disclose any facts requested in connection with an
application or any communication with the Division.
(2) The Director may refuse to grant a
license or registration to an applicant who makes deliberate misstatements,
deliberate omissions, misrepresentations, or untruths in any application or in
connection with the applicant's background investigation.
2.6
Approval with conditions or for a
limited period.
The Director may grant a registration or license with special
conditions or for a limited period, or both.
2.7
Requirements for non-renewal
years.
Per Rule 2.1(2), fantasy contest operator licenses and
registrations are valid for up to two years. In the off year in which a renewal
application is not required, fantasy contest providers must submit the results
of their annual independent audits and/or internal control reviews, conducted
pursuant to section
44-30-1607(2),
C.R.S., by July 31.
(1) The audit may
be an annual financial audit of the provider's fiscal year-end financial
statements by an independent certified public accountant; or
(2) The audit may be an annual compliance
attestation along with the results completed by an independent certified public
accountant to verify compliance with the part 16, article
30, title
44, C.R.S., and the Rules and
Regulations promulgated thereunder.
2.8
Petitions for declaratory
order.
(1) Any person may petition the
Director for a declaratory order to terminate controversies or to remove
uncertainties as to the applicability to the petitioner of any provision of
Article 30 of Title
44, C.R.S., or of any rule or order of
the Director.
(2) The Director
will determine, in his or her discretion and without notice to petitioner,
whether to rule upon any such a petition. The Director shall promptly notify
the petitioner of his or her action and state the reasons for such
action.
(3) In determining whether
to rule upon a petition filed pursuant to this Rule, the Director will consider
the following matters, among others:
(a)
Whether a ruling on the petition will terminate a controversy or remove
uncertainties.
(b) Whether the
petition involves any subject, question or issue which is the subject of a
formal or informal matter or investigation currently pending before the
Director or a court involving one or more of the petitioners.
(c) Whether the petition involves any
subject, question or issue which is the subject of a formal or informal matter
or investigation currently pending before the Director or a court but not
involving any petitioner.
(d)
Whether the petition seeks a ruling on a moot or hypothetical question or will
result in an advisory ruling or opinion.
(e) Whether the petitioner has some other
adequate legal remedy, other than an action for declaratory relief pursuant to
Rule 57, Colorado Rules of Civil Procedure, which will terminate the
controversy or remove any uncertainty as to the applicability to the petitioner
of the statute, rule, or order in question.
(4) Any petition filed pursuant to this Rule
shall set forth the following:
(a) The name
and address of the petitioner and whether the petitioner is registered or
licensed pursuant to sections
44-30-1605 or
44-30-1606, C.R.S.
(b) The statute, rule, or order to which the
petition relates.
(c) A concise
statement of all of the facts necessary to show the nature of the controversy
or uncertainty and the manner in which the statute, rule or order in question
applies or potentially applies to the petitioner.
(5) If the Director determines that he or she
will rule on the petition, the following procedure shall apply:
(a) The Director may rule upon the petition
based solely upon the facts presented in the petition. In such a case:
(i) Any ruling of the Director will apply
only to the extent of the facts presented in the petition and any amendment to
the petition.
(ii) The Director may
order the petitioner to file a written brief, memorandum, or statement of
position.
(iii) The Director may
set the petition, upon due notice to petitioner, for a non-evidentiary
hearing.
(iv) The Director may
dispose of the petition on the sole basis of the matters set forth in the
petition.
(v) The Director may
request the petitioner to submit additional facts in writing. In such event,
such additional facts will be considered as an amendment to the
petition.
(vi) The Director may
take administrative notice of facts pursuant to the State Administrative
Procedure Act and may utilize available experience, technical competence and
specialized knowledge in the disposition of the petition.
(vii) If the Director rules upon the petition
without a hearing, the Director shall promptly notify the petitioner of the
decision.
(b) The
Director may, in his or her sole discretion, set the petition for hearing, upon
due notice to petitioner, for the purpose of obtaining additional facts or
information or to determine the truth of any facts set forth in the petition or
to hear oral argument on the petition. The notice to the petitioner setting
such hearing shall set forth, to the extent known, the factual or other matters
into which the Director intends to inquire. For the purpose of such a hearing,
to the extent necessary, the petitioner shall have the burden of proving all of
the facts stated in the petition, all of the facts necessary to show the nature
of the controversy or uncertainty and the manner in which the statute, rule or
order in question applies or potentially applies to the petitioner and any
other facts the petitioner desires the Director to consider.
(6) The parties to any proceeding
pursuant to this Rule shall be the Director and the petitioner. Any other
person may seek leave of the Director to intervene in such a proceeding and
leave to intervene will be granted at the sole discretion of the Director. A
petition to intervene shall set forth the same matters as required by Rule
2.8(3)(D). Any reference to a "petitioner" in this Rule also refers to any
person who has been granted leave to intervene by the Director.
(7) Any declaratory order or other order
disposing of a petition pursuant to this Rule shall constitute final agency
action subject to judicial review pursuant to section
24-4-106, C.R.S.