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Can I obtain a fantasy sports license in New Jersey? What are the requirements?

To obtain a fantasy sports license in New Jersey, you must apply to the Division of Consumer Affairs in the Department of Law and Public Safety. The division will investigate your application and oversee the conduct of activities. You must pay a permit fee and a quarterly operations fee. The division has the authority to inspect your facilities to ensure the integrity of fantasy sports activities. If you were offering fantasy sports activities in New Jersey on August 24, 2017, you are permitted to continue to provide fantasy sports activities until April 7, 2018. If you qualify for this exemption and apply for a permit prior to April 7, 2018, you can continue to offer fantasy sports activities while your application is pending with the Division [2.1]. Your equipment used to conduct fantasy sports activities must be physically located within the boundaries of the municipality specified in section 20 of P.L. 2013, c. 27 (N.J.S.A. 5:12-95.22) [2.3]. You must conduct fantasy sports activities so that the outcome is determined by statistics generated based on the performance of actual individuals participating in real competitions or athletic events. The outcome of fantasy sports activities shall not be based solely on the performance of an individual athlete or on the score, point spread, or any performance of a single real team or combination of real teams. Prizes offered to participants shall be established and disclosed in advance to all participants. The value of a prize shall not be determined by the number of participants or the amount of entry fees paid by participants [2.4]. You must adopt procedures to ensure that prohibited participants and participants under the age of 18 years do not participate in fantasy sports activities. You must 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. You must 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. You must 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 [2.5]. If you are a racetrack permit holder, you may file a letter with the Racing Commission applying for a transactional waiver to immediately commence sports wagering. Upon a showing that the applicant currently holds a permit to conduct live racing in the State of New Jersey, the Racing Commission shall immediately issue a sports wagering license to the permit holder allowing for the immediate commencement of sports wagering subject to the condition that the permit holder comply with the Act, this chapter, and the rules of the Division promulgated pursuant to the Act, by March 8, 2019 (270 days from the effective date of the Act) [3.1].

Source(s):
Jurisdiction

New Jersey