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7 LONG TITLE
8 General Description:
9 This bill enacts the Skill-based Games Regulation Act.
10 Highlighted Provisions:
11 This bill:
12 ▸ defines terms;
13 ▸ enacts provisions related to skill-based games, including registration and
14 notification requirements;
15 ▸ requires the Division of Consumer Protection to:
16 • enforce the Skill-based Games Regulation Act;
17 • make rules under the Skill-based Games Regulation Act;
18 • contract with a third party to determine whether a game is a skill-based game
19 under the Skill-based Games Regulation Act; and
20 • establish and maintain a database related to skill-based games registered under
21 the Skill-based Games Regulation Act; and
22 ▸ establishes that a skill-based game is not "fringe gambling" or "gambling" under
23 Title 76, Chapter 10, Part 11, Gambling.
24 Money Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 None
28 Utah Code Sections Affected:
29 AMENDS:
30 13-2-1, as last amended by Laws of Utah 2020, Chapter 118
31 76-10-1101, as last amended by Laws of Utah 2020, Chapter 291
32 76-10-1110, as enacted by Laws of Utah 2020, Chapter 291
33 ENACTS:
34 13-58-101, Utah Code Annotated 1953
35 13-58-102, Utah Code Annotated 1953
36 13-58-201, Utah Code Annotated 1953
37 13-58-202, Utah Code Annotated 1953
38 13-58-301, Utah Code Annotated 1953
39 13-58-302, Utah Code Annotated 1953
40
41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 13-2-1 is amended to read:
43 13-2-1. Consumer protection division established -- Functions.
44 (1) There is established within the Department of Commerce the Division of Consumer
45 Protection.
46 (2) The division shall administer and enforce the following:
47 (a) Chapter 5, Unfair Practices Act;
48 (b) Chapter 10a, Music Licensing Practices Act;
49 (c) Chapter 11, Utah Consumer Sales Practices Act;
50 (d) Chapter 15, Business Opportunity Disclosure Act;
51 (e) Chapter 20, New Motor Vehicle Warranties Act;
52 (f) Chapter 21, Credit Services Organizations Act;
53 (g) Chapter 22, Charitable Solicitations Act;
54 (h) Chapter 23, Health Spa Services Protection Act;
55 (i) Chapter 25a, Telephone and Facsimile Solicitation Act;
56 (j) Chapter 26, Telephone Fraud Prevention Act;
57 (k) Chapter 28, Prize Notices Regulation Act;
58 (l) Chapter 32a, Pawnshop and Secondhand Merchandise Transaction Information Act;
59 (m) Chapter 34, Utah Postsecondary Proprietary School Act;
60 (n) Chapter 34a, Utah Postsecondary School State Authorization Act;
61 (o) Chapter 39, Child Protection Registry;
62 (p) Chapter 41, Price Controls During Emergencies Act;
63 (q) Chapter 42, Uniform Debt-Management Services Act;
64 (r) Chapter 49, Immigration Consultants Registration Act;
65 (s) Chapter 51, Transportation Network Company Registration Act;
66 (t) Chapter 52, Residential Solar Energy Disclosure Act;
67 (u) Chapter 53, Residential, Vocational and Life Skills Program Act;
68 (v) Chapter 54, Ticket Website Sales Act;
69 (w) Chapter 56, Ticket Transferability Act; [
70 (x) Chapter 57, Maintenance Funding Practices Act[
71 (y) Chapter 58, Skill-based Games Regulation Act.
72 Section 2. Section 13-58-101 is enacted to read:
73
74
75 13-58-101. Title.
76 This chapter is known as "Skill-based Games Regulation Act."
77 Section 3. Section 13-58-102 is enacted to read:
78 13-58-102. Definitions.
79 As used in this chapter:
80 (1) "Division" means the Division of Consumer Protection established in Section
81 13-2-1.
82 (2) "Prize" means the same as that term is defined in Section 76-10-1101.
83 (3) "Skill-based game" means a game:
84 (a) a player plays:
85 (i) on a machine or device; and
86 (ii) in exchange for money or other thing of value;
87 (b) the outcome of which is based wholly or predominantly on the skill of the player;
88 (c) that does not:
89 (i) generate an automatic winner;
90 (ii) award a prize without the application of the player's skill; or
91 (iii) appear to be a game described in Subsections 76-10-1101(16)(e)(v)(A) through
92 (H); and
93 (d) in which:
94 (i) the number or ratio of previous players' wins or losses does not impact a player's
95 ability to succeed at the game;
96 (ii) a player is able to win more than the cost of play each time the player employs the
97 skill required to win the game;
98 (iii) the occurrence of a chance event that a player cannot alter does not determine the
99 success of the player or the outcome of the game; and
100 (iv) the output of a random number generator does not determine the success of the
101 player or the outcome of the game.
102 Section 4. Section 13-58-201 is enacted to read:
103
104 13-58-201. Registration of skill-based games -- Notification to division.
105 (1) The owner of a skill-based game may not derive an economic benefit from the
106 operation of the game in this state without registering the game with the division.
107 (2) To register a skill-based game, the owner of the game shall submit to the division
108 an application for registration:
109 (a) in a manner the division determines; and
110 (b) that includes:
111 (i) an application fee in an amount:
112 (A) determined by the division in accordance with Sections 13-1-2 and 63J-1-504; and
113 (B) that includes the cost of determining whether the game is a skill-based game under
114 this chapter;
115 (ii) the trade name of the game;
116 (iii) the location of each game terminal in which the public has access to the game; and
117 (iv) anything else the division requires as established in rule made in accordance with
118 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
119 (3) Each year, the owner of a registered skill-based game shall renew the game's
120 registration by submitting to the division an application for registration renewal:
121 (a) in a manner the division determines; and
122 (b) that includes:
123 (i) a registration renewal fee in an amount:
124 (A) determined by the division in accordance with Sections 13-1-2 and 63J-1-504; and
125 (B) that includes the cost of determining whether the game is a skill-based game under
126 this chapter; and
127 (ii) anything else the division requires as established in rule made in accordance with
128 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
129 Section 5. Section 13-58-202 is enacted to read:
130 13-58-202. Required notification -- Fees.
131 (1) The owner of a skill-based game registered in accordance with this chapter shall
132 notify the division within 30 days after the day on which any of the following occurs:
133 (a) the game undergoes a hardware or software upgrade;
134 (b) the trade name of the game changes;
135 (c) the location of a game terminal in which the public has access to the game changes;
136 or
137 (d) the game is added to a terminal in which the public has access to the game.
138 (2) If a skill-based game registered in accordance with this section undergoes a
139 hardware or software upgrade, in addition to notifying the division as described in Subsection
140 (1) the owner of the game shall pay the division a fee in an amount:
141 (a) determined by the division in accordance with Sections 13-1-2 and 63J-1-504; and
142 (b) that includes the cost of determining whether the game is a skill-based game under
143 this chapter.
144 Section 6. Section 13-58-301 is enacted to read:
145
146 13-58-301. Enforcement.
147 In addition to the division's enforcement powers under Chapter 2, Division of
148 Consumer Protection, the division may impose an administrative fine of up to $500 for each
149 violation of this chapter.
150 Section 7. Section 13-58-302 is enacted to read:
151 13-58-302. Rulemaking -- Determination of skill-based games -- Database.
152 (1) The division shall make rules in accordance with Title 63G, Chapter 3, Utah
153 Administrative Rulemaking Act, to:
154 (a) establish an application process for an owner of a skill-based game to register and
155 renew registration of the skill-based game with the division, in accordance with Section
156 13-58-201;
157 (b) establish a process through which an owner may notify the division as required
158 under Section 13-58-202; and
159 (c) carry out the provisions of this chapter.
160 (2) The division shall:
161 (a) contract, in accordance with Title 63G, Chapter 6a, Utah Procurement Code, with a
162 third party to determine whether a game is a skill-based game under this chapter; and
163 (b) have the contracted third party described in Subsection (2)(a) determine whether a
164 game is a skill-based game under this chapter upon the division's receipt of:
165 (i) an application for registration described in Subsection 13-58-201(2);
166 (ii) an application for registration renewal described in Subsection 13-58-201(3); or
167 (iii) a notification described in Subsection 13-58-202(1)(a).
168 (3) (a) The division shall establish and maintain a database of all skill-based games
169 registered in accordance with this chapter.
170 (b) The database described in Subsection (3)(a) shall include the location of each game
171 terminal in which the public has access to the skill-based game.
172 Section 8. Section 76-10-1101 is amended to read:
173 76-10-1101. Definitions.
174 As used in this part:
175 (1) (a) "Amusement device" means a game that:
176 (i) is activated by a coin, token, or other object of consideration or value; and
177 (ii) does not provide the opportunity to:
178 (A) enter into a sweepstakes, lottery, or other gambling event; or
179 (B) receive any form of consideration or value, except an appropriate reward.
180 (b) "Amusement device" includes:
181 (i) a video game;
182 (ii) a driving simulator;
183 (iii) an electronic game;
184 (iv) a claw machine;
185 (v) a bowling game;
186 (vi) a shuffleboard game;
187 (vii) a skee-ball game;
188 (viii) a pool table;
189 (ix) a pinball machine;
190 (x) a target machine; and
191 (xi) a baseball machine.
192 (2) "Amusement facility" means a facility that:
193 (a) is operated primarily for the purpose of providing amusement or entertainment to
194 customers;
195 (b) is located on property that is open to customers for the purpose of providing
196 customers with an opportunity to use an amusement device;
197 (c) receives a substantial amount of the facility's revenue from the operation of
198 amusement devices; and
199 (d) does not provide an opportunity for, or a machine or device that enables, gambling
200 or fringe gambling.
201 (3) (a) "Appropriate reward" means a reward that:
202 (i) an individual receives as a result of the individual's participation in or use of an
203 amusement device; and
204 (ii) provides:
205 (A) full and adequate return for money, a token, or other consideration or value
206 invested into the amusement device;
207 (B) an immediate and unrecorded ability to replay a game featured on an amusement
208 device that is not exchangeable for value;
209 (C) a toy, novelty, or other non-monetary prize with a value of less than $100 as a
210 reward for playing; or
211 (D) tickets or credits that are redeemable for a toy, novelty, or non-monetary prize at an
212 amusement facility, or at any franchise or chain of the amusement facility, where the
213 amusement device is located.
214 (b) "Appropriate reward" does not include money, a gift certificate, a gift card, credit to
215 be used in a retail store, or other form of monetary compensation or reward.
216 (4) "Consumer" means the same as that term is defined in Section 76-10-1230.
217 (5) "Enter or entry" means an act or process by which an individual becomes eligible to
218 receive a prize offered for participation in any form of sweepstakes, game, or contest.
219 (6) (a) "Fringe gambling" means any de facto form of gambling, lottery, fringe gaming
220 device, or video gaming device that is given, conducted, or offered for use or sale by a business
221 in exchange for anything of value or incident to the purchase of another good or service.
222 (b) "Fringe gambling" does not include:
223 (i) a promotional activity that is clearly ancillary to the primary activity of a business;
224 [
225 (ii) use of an amusement device or vending machine[
226 (iii) a skill-based game registered in accordance with Title 13, Chapter 58, Skill-based
227 Games Regulation Act.
228 (7) (a) "Fringe gaming device" means a mechanically, electrically, or electronically
229 operated machine or device that:
230 (i) is not an amusement device or a vending machine;
231 (ii) is capable of displaying or otherwise presenting information on a screen or through
232 any other mechanism; and
233 (iii) provides the user with a card, token, credit, gift certificate, product, or opportunity
234 to participate in a contest, game, gaming scheme, or sweepstakes with a potential return of
235 money or other prize.
236 (b) "Fringe gaming device" includes a machine or device similar to a machine or
237 device described in Subsection (7)(a) that seeks to avoid application or circumvent this part or
238 Article VI, Section 27, of the Utah Constitution.
239 (8) (a) "Gambling" means risking anything of value for a return or risking anything of
240 value upon the outcome of a contest, game, gaming scheme, or gaming device when the return
241 or outcome:
242 (i) is based on an element of chance, regardless of:
243 (A) the existence of a preview or pre-reveal feature in the device, contest, or game; or
244 (B) whether the preview or pre-reveal feature described in Subsection (8)(a)(i)(A)
245 allows users to see individual or successive outcomes; and
246 (ii) is in accord with an agreement or understanding that someone will receive anything
247 of value in the event of a certain outcome.
248 (b) "Gambling" includes a lottery.
249 (c) "Gambling" does not include:
250 (i) a lawful business transaction; [
251 (ii) use of an amusement device[
252 (iii) a skill-based game registered in accordance with Title 13, Chapter 58, Skill-based
253 Games Regulation Act.
254 (9) "Gambling bet" means money, checks, credit, or any other representation of value.
255 (10) "Gambling device or record" means anything specifically designed for use in
256 gambling or fringe gambling or used primarily for gambling or fringe gambling.
257 (11) "Gambling proceeds" means anything of value used in gambling or fringe
258 gambling.
259 (12) "Internet gambling" or "online gambling" means gambling, fringe gambling, or
260 gaming by use of:
261 (a) the Internet; or
262 (b) any mobile electronic device that allows access to data and information.
263 (13) "Internet service provider" means a person engaged in the business of providing
264 Internet access service, with the intent of making a profit, to consumers in Utah.
265 (14) "Lottery" means any scheme for the disposal or distribution of property by chance
266 among persons who have paid or promised to pay any valuable consideration for the chance of
267 obtaining property, or portion of it, or for any share or any interest in property, upon any
268 agreement, understanding, or expectation that it is to be distributed or disposed of by lot or
269 chance, whether called a lottery, raffle, or gift enterprise, or by whatever name it is known.
270 (15) "Prize" means a gift, award, gratuity, good, service, credit, or anything else of
271 value that may be or is transferred to an individual or placed on an account or other record with
272 the intent to be transferred to an individual.
273 (16) "Promotional activity that is clearly ancillary to the primary activity of a business"
274 means a promotional activity that:
275 (a) continues for a limited period of time;
276 (b) is related to a good or service ordinarily provided by a business or the marketing or
277 advertisement of a good or service ordinarily provided by the business;
278 (c) does not require a person to purchase a good or service from the business in
279 consideration for participation or an advantage in the promotional activity or any other contest,
280 game, gaming scheme, sweepstakes, or promotional activity;
281 (d) promotes a good or service described in Subsection (16)(b) on terms that are
282 commercially reasonable; and
283 (e) does not, through use of a machine or device:
284 (i) simulate a gambling environment;
285 (ii) require the purchase of something of value to participate in the promotional activity
286 that is not regularly used, purchased, or redeemed by users of the machine or device;
287 (iii) provide a good or service described in Subsection (16)(b):
288 (A) in a manner in which the person acquiring the good or service is unable to
289 immediately acquire, redeem, or otherwise use the good or service after the time of purchase;
290 or
291 (B) at a value less than the full value of the good or service;
292 (iv) appear or operate in a manner similar to a machine or device that is normally found
293 in a casino for the purpose of gambling;
294 (v) provide an entertaining display, designed to appeal to an individual's senses, that
295 promotes actual or simulated game play that is similar in appearance or function to gambling,
296 including:
297 (A) a video playing card game, including a video poker game;
298 (B) a video bingo game;
299 (C) a video craps game;
300 (D) a video keno game;
301 (E) a video lotto game;
302 (F) an 8-liner machine;
303 (G) a Pot O' Gold game;
304 (H) a video game involving a random or chance matching of pictures, words, numbers,
305 or symbols; or
306 (I) a video game that reveals a prize as the game is played; or
307 (vi) otherwise create a pretextual transaction to facilitate a contest, game, gaming
308 scheme, or sweepstakes in an attempt to circumvent the requirements of this part or Article VI,
309 Section 27, of the Utah Constitution.
310 [
311
312
313 [
314 other promotion:
315 (a) that an individual may enter with or without payment of any consideration;
316 (b) that qualifies the person to win a prize; and
317 (c) the result of which is based on chance.
318 [
319 (a) that dispenses merchandise in exchange for money or any other item of value;
320 (b) that provides full and adequate return of the value deposited;
321 (c) through which the return of value is not conditioned on an element of chance or
322 skill; and
323 (d) (i) does not include a promotional activity; or
324 (ii) includes a promotional activity that is clearly ancillary to the primary activity of a
325 business.
326 [
327 (a) a video display and computer mechanism for playing a game;
328 (b) the length of play of any single game is not substantially affected by the skill,
329 knowledge, or dexterity of the player;
330 (c) a meter, tracking, or recording mechanism that records or tracks any money, tokens,
331 games, or credits accumulated or remaining;
332 (d) a play option that permits a player to spend or risk varying amounts of money,
333 tokens, or credits during a single game, in which the spending or risking of a greater amount of
334 money, tokens, or credits:
335 (i) does not significantly extend the length of play time of any single game; and
336 (ii) provides for a chance of greater return of credits, games, or money; and
337 (e) an operating mechanism that, in order to function, requires inserting money, tokens,
338 or other valuable consideration other than entering the user's name, birthdate, or contact
339 information.
340 Section 9. Section 76-10-1110 is amended to read:
341 76-10-1110. Fringe gaming devices.
342 (1) Notwithstanding any other provision in Title 76, Chapter 10, Offenses Against
343 Public Health, Safety, Welfare, and Morals, it is unlawful for any person to derive or intend to
344 derive an economic benefit from a fringe gaming device by:
345 (a) permitting a fringe gaming device to be located on or in any real or personal
346 property owned, rented, or under the control of the person;
347 (b) allowing individual or public access or use of a fringe gaming device as part of any
348 business owned or operated by the person;
349 (c) inducing or aiding a person to use a fringe gaming device;
350 (d) investing in, financing, owning, controlling, or otherwise managing a fringe gaming
351 device; or
352 (e) possessing a fringe gaming device with the intent to use or allow another to use the
353 fringe gaming device.
354 (2) Subsection (1) applies regardless of whether the fringe gaming device:
355 (a) is server-based;
356 (b) uses a simulated game terminal as a representation of a prize associated with the
357 results of a sweepstakes entry;
358 (c) uses a simulated game to influence or determine the result of the simulated game or
359 the value of a prize;
360 (d) selects the winner of a prize from a predetermined or finite pool of entries;
361 (e) includes a pre-reveal feature;
362 (f) predetermines a prize and reveals the prize at the time a sweepstakes entry result is
363 revealed;
364 (g) requires deposit of any money, coin, token, or gift certificate, or the use of a credit
365 card, debit card, prepaid card, or any other method of payment to activate the device;
366 (h) requires direct payment into the machine or device or remote activation of the
367 device;
368 (i) requires a purchase of a related product regardless of whether the product has
369 legitimate value; or
370 (j) reveals the prize incrementally, regardless of whether a prize is awarded[
371 [
372 (3) Each violation of this section is a separate offense.
373 (4) A person who violates this section is guilty of:
374 (a) a class A misdemeanor for the first offense; or
375 (b) a third degree felony for a subsequent offense.