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Paid Entry Contest Operator Charter

Compliance with UIGEA
The signatory company will seek legal advice to ensure all games offered by them are  compliant with the fantasy sports definition in the Unlawful Internet Gaming Enforcement Act 2006, namely:
Fantasy or simulation sports game or educational game or contest, in which (if the game or contest involves a team or teams) no fantasy or simulation team is based on the current membership of an actual team that is a member of an amateur or professional sports organization and meets the following conditions:

  1. All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by participants.
  2.  All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
  3. No winning outcome is based:
    1.  On the score, point spread, or any performance or performances of any single real-world team or any combination of such teams; or
    2. Solely on any single performance of an individual athlete in any single real-world sporting or other event.

Compliance with State Law
The signatory company has sought legal guidance that all of their games are compliant with the laws of the states within which they operate. Generally, industry participants take the position that most states that use a skill predominance test to assess whether a game is one of skill or chance will consider their fantasy sports game one of skill and thus take the position that paid entry fantasy sports games may be legally offered in those states. Companies that operate in these skill predominance states need to have confidence that all particular games they offer are indeed skill predominant.

Qui Tam States
The signatory company is aware of qui tam laws in the states it operates and endeavors to protect its players from being targeted by lawsuits relating to those laws.

Know Your Customer
The signatory companies will put measures in place to ensure that their paying customers:
• Reside only in states in which the signatory companies, after seeking legal advice, have chosen to take paid entrants for their games; and
• Are of the required minimum age for that state, province or country.

Coding, Fraud and Anti-Money Laundering
The signatory company will use an appropriate merchant category code for credit card processing and institute adequate fraud and anti-money laundering checks in handling player funds.

Taxation
The signatory company files 1099 tax forms with the IRS for all players who win in excess of the legal limit in a single calendar year.

Segregation of Player Funds
The signatory company will hold player funds (whether they are funds on deposit, or as entry fees in live games) separate from their operational funds. Player funds will not be used to fund the growth of their business and at no time are player funds at risk if the company were to cease doing business. Notwithstanding the above, signatory companies recognize that all prizes are paid from the general assets of the signatory companies, and the winners are not paid out of a pool consisting of funds received for any given contest. Stated another way, signatory companies recognize they must pay winners of a contest the announced prize irrespective of the amount of funds received from entrants in that particular contest. Further, it is recommended that each company has an annual audit performed, ensuring that the appropriate player funds are being segregated.

Use of Gambling Terms and PR
The signatory company will avoid the use of gambling terms in the promotion and marketing of their games. They will not market their games as fantasy sports gambling or fantasy betting. Gambling terms include (but are not limited to): gamble, gambling, betting, bet, wager, rake, rakeback, parlay, juice, vigorish, vig, line, pot, and spread.

Generally accepted terms in the industry are ‘entry fees’, ‘prizes’ and ‘commission’.

Furthermore, when briefing journalists, signatory companies will emphasize the skill nature of the game and maintain a clear divide between fantasy sports and sports betting.

Association with Illegal Gambling
The signatory company will not partner or associate with companies that offer illegal gambling.

Player Protection
The signatory company will ensure employees or other persons connected to the company with access to confidential player information (such as line-ups) will not:
• Play on their own games (apart from for testing purposes or in private leagues)
• Use confidential player information to gain an advantage playing against players on a different site
• Share confidential player information (such as win rate) to anyone outside of the company

Professional Athletes
The signatory company will ensure that current professional and amateur athletes will be restricted to not play paid entry games in the league they are a player in (e.g. current active NFL players may play paid entry MLB games, but not NFL games).

Support of the FSTA
The signatory company is committed to supporting the FSTA in its role in assisting the fantasy sports industry to demonstrate effective self-regulation. Furthermore, the signatory company supports the FSTA in taking action to remove the charter from any signatory company that repeatedly fails to conform its conduct to the above.

General Provisions
Conforming with the above should not be viewed as compliance with the law, and the FSTA is in no way certifying such compliance of member companies. Companies should procure and adhere to legal advice regarding their games from skilled, experienced counsel of their choice.

The FSTA is not undertaking to audit or regulate member companies. Rather, this code is designed to foster proper behavior and allow the FSTA to exercise discretion and take action if it so chooses should it learn that a member company is not adhering to the principles set forth above.