Current through Register Vol. 50, No. 9, September 20, 2024
A.
Licensees shall comply with the provisions of
R.S.
27:308(D) and 310.
B. Licensees shall provide the following
information upon demand by the division. As appropriate, the information shall
include, at a minimum, month to date and year to date.
1. For each paid fantasy sports contest
offered, the following information:
a. the
date and time the fantasy sports contest started (began accepting entries) and
ended (results finalized);
b. the
contest identifier;
c. the prize
structure;
d. the players who
entered the fantasy sports contest;
e. the selections each player made for their
team;
f. the total number of points
earned by each players team;
g. the
total amount of entry fees paid;
h.
the results, including the points earned by the winning player or
players;
i. the total amount of
winnings to the players;
j. the
total amount of cash equivalents awarded to the players; and
k. the information used to determine the
location percentage.
2.
Overall reports providing the following information for all players associated
with the licensee:
a. total player deposits
for the requested period;
b. total
player withdrawals for the requested period;
c. total entry fees collected from
players;
d. total winnings paid to
players; and
e. the same
information in Subparagraph c and d of this Paragraph for Louisiana players
included in the calculation of the location percentage.
3. A time-stamped player log of the
following:
a. a unique player
identification;
b. all deposits to
the players account;
c. all
withdrawals to the player;
d. all
cash equivalents added to the players account; and
e. all manual adjustments or modifications to
the players account.
4.
The following player account information:
a.
a unique player identification;
b.
the players identity details including, but not limited to: participants legal
name; age; and address;
c. any
self-restrictions;
d. any previous
accounts; and
e. the date and IP
address from which the player account was registered or accessed.
C. Annual financial
statements shall be provided to the division not later than May 1 each year or
120 days after the end of the fiscal year if not December 31.
D. A licensee shall submit to the division
one copy of any report required to be filed with the Securities and Exchange
Commission or other domestic or foreign securities regulatory agency by the
licensee, and their holding company, intermediate company, or parent company.
These reports shall be delivered to the division within 15 days of the time of
filing with such commission or agency or within 15 days of the due date
prescribed by such commission or regulatory agency, whichever comes
first.
E. Each licensee shall
submit to the division annual audited financial statements reflecting all
financial activities of the licensee's fantasy sports contest operations
subjected to an examination conducted according to generally accepted auditing
standards by an independent Certified Public Accountant (CPA).
1. This shall include auditing total entry
fees, entry fees from players located in Louisiana, location percentage
calculations, winnings paid, net revenue, and taxes paid to Louisiana based on
net revenues. The auditor shall reconcile these audited amounts to similar
amounts on the annual audited financial statements and system
reports.
2. All audits and reports
required by this Section shall be prepared at the sole expense of the
licensee.
F. Annual
Review of Operations
1. Each licensee shall
require the independent CPA, engaged for purposes of examining the financial
statements, to submit to the licensee two signed copies of a written report
detailing the continuing effectiveness and adequacy of the internal
controls.
2. The auditor shall
include in this report any items discovered by the auditor or brought to the
auditors attention where the operator does not act in accordance with the
internal controls and procedures provided to the division. The report should
also include notification and explanation for all occasions when the operator
denies a players request to withdraw funds and all occasions when the operator
discovers the use of unauthorized scripts on its platform.
a. Denial of a withdrawal means the operator
or its agent issues the decision to deny a players request to withdraw. Issues
not controlled by the operator, such as banking system issues, incorrect
deposit account numbers, or other issues not controlled by the operator are not
included.
b. Reportable script
items includes unauthorized scripts discovered on the platform whether used or
not.
3. This report is
due no later than 30 days after the due date of the audited financial
statements required in Subsection C of this Section.
G. Each licensee shall engage an independent
Certified Public Accountant (CPA). The CPA shall examine the statements in
accordance with generally accepted auditing standards. The CPA is prohibited
from providing internal audit services. Should the CPA previously engaged as
the principal accountant to audit the licensee's financial statements resign or
be dismissed as the principal accountant, or if another CPA is engaged as
principal accountant, the licensee shall file a report with the division within
10 days following the end of the month in which the event occurs, setting forth
the following:
1. The date of the resignation,
dismissal, or engagement;
2. Any
disagreements with a former accountant, in connection with the audits of the
two most recent years, on any matter of accounting principles, or practices,
financial statement disclosure, auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of the former accountant,
would have caused him to make reference in connection with his report to the
subject matter of the disagreement; including a description of each such
disagreement; whether resolved or unresolved;
3. Whether the principal accountant's report
on the financial statements for any of the past two years contained an adverse
opinion or a disclaimer of opinion or was qualified. The nature of such adverse
opinion, disclaimer of opinion, or qualification shall be described;
and
4. A letter from the former
accountant furnished to the licensee and addressed to the division stating
whether the CPA agrees with the statements made by the licensee in response to
this Section.
H. Unless
the division approves otherwise in writing, the statements required must be
presented on a comparative basis. Consolidated financial statements may be
filed by commonly owned or operated operations, but theconsolidated statements
must include consolidating financial information or consolidated schedules
presenting separate financial statements for each licensee. The CPA shall
express an opinion on the consolidated financial statements as a whole and
shall subject the accompanying consolidating financial information to the
auditing procedures applied in the examination of the consolidated financial
statements.
I. Each licensee shall
submit to the division two originally signed copies of its audited financial
statements and the applicable CPA's letter of engagement not later than May 1
or 120 days after the last day of the licensee's business year if not December
31.
J. If a licensee changes its
fiscal year, the licensee shall prepare and submit to the division audited
financial statements covering the period from the end of the previous business
year to the beginning of the new business year not later than 120 days after
the end of the period.
K. Each
licensee shall submit a quarterly financial report including gross fantasy
sports contests revenues, net revenues, location percentage calculations, and
taxes paid on net revenues. The report shall be forwarded to the division not
later than 30 days after the last day of the applicable quarter.
L. The division may request additional
information and documents from either the licensee or their CPA, regarding the
financial statements or the services performed by the C PA. The division may
review any and all work papers of the CPA at a time and place determined by the
division. These requirements shall be included in agreements between the
licensee or its affiliates and the CPA.
M. The licensee shall submit to the division,
postmarked by the United States Postal Service or deposited for delivery with a
private or commercial interstate carrier, or in another manner approved by the
division, any audit report prepared by the Internal Revenue Service (IRS) and
issued to the licensee. The report is due within 30 days of receipt from the
IRS.
N. Impairments to the
independence of a CPA to perform a financial audit include, but are not limited
to:
1. during the period of professional
engagement to perform an audit, or at the time the opinion was issued, the
auditing person:
a. had or was committed to
acquire any direct or indirect financial interest in the licensee;
b. was a trustee of any trust or executor or
administrator of any estate if the trust or estate had or was committed to
acquire any direct or indirect financial interest in the licensee;
c. had any joint closely held business
investment with the licensee or any key person or owner thereof that was
material in relation to the auditing person or the auditing persons firms net
worth; or
d. had any loan to or
from the licensee or any key person or owner thereof, when made under normal
lending procedures, terms, and requirements, except:
i. loans that are not material to the net
worth of the borrower;
ii. home
mortgages; or
iii. other secured
loans, except loans guaranteed by the auditing persons firm that are otherwise
unsecured.
2.
during the period covered by the licensees financial statements, during the
period of the professional engagement to perform an audit, or at the time the
opinion is issued, the auditing person was:
a.
connected with the licensee as a promoter, underwriter, voting trustee, key
employee, or in any capacity equivalent to that of a key employee; or
b. a trustee for any pension or
profit-sharing trust of the licensee;
3. functioning as if a key employee of the
licensee;
4. performing an audit of
the independent CPA or independent CPAs firms own work;
5. advocacy for the licensee; or
6. having any other role with the licensee or
its affiliates other than as independent auditor.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
27:15, 24, and
304.
