Kentucky Administrative Regulations › Title 809 - Public Protection Cabinet - Kentucky Horse Racing Commission › Chapter 10 - Technical Criteria › Section 809 KAR 10:001 - General provisions

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO: KRS Chapter 230
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				230.260(16) requires the
				commission to promulgate administrative regulations to establish standards for
				the conduct of sports wagering. This administrative regulation establishes
				definitions of various terms used throughout the commission's sports wagering
				administrative regulations.
Section 1.
			 Definitions.
(1) "Abnormal wagering activity"
			 means wagering activity exhibited by one (1) or more patrons and considered by
			 a licensee to be an indicator of suspicious or illegal wagering
			 activity.
(2) "Account holder"
			 means an individual for whom the licensee has opened a sports wagering
			 account.
(3) "Act" means 2023 Ky.
			 Acts Ch. 147, of the Kentucky Revised Statutes, the Kentucky Sports Wagering
			 Act of 2023.
(4) "Adjusted gross
			 revenue" is defined by
			 KRS
			 138.552.
(5) "Affiliate" means a person that, owns,
			 controls, manages, or is operationally interdependent with a
			 licensee.
(6) "Amateur youth
			 sporting event" is defined by
			 KRS
			 230.210.
(7) "Applicant" means a person that applies
			 with the racing commission to be an authorized licensee.
(8) "Cancelled wager" means a sports wager
			 that was valid at the time it was made but has since been invalidated in a
			 manner acceptable by the commission due to an event or action that prevents its
			 completion.
(9) "Card" means the
			 list of sporting events and types of wager from which a patron can make
			 selections for a given pool.
(10)
			 "Cash" means U.S. currency.
(11)
			 "Cash equivalent" means an asset convertible to cash for use in connection with
			 authorized sports wagering, as follows:
(a)
			 Traveler's checks;
(b) Foreign
			 currency and coin;
(c) Certified
			 checks, cashier's checks, and money orders;
(d) Personal checks and drafts;
(e) Digital, crypto, and virtual
			 currencies;
(f) Online and mobile
			 payment systems that support online money transfers; and
(g) Electronic devices with prepaid access,
			 as defined by 31 C.F.R.
			 Section
			 1010.100(ww).
(12) "Confidential information"
			 means:
(a) The amount of money credited to,
			 debited from, withdrawn from, or present in any particular sports wagering
			 account;
(b) The amount of money
			 wagered by a particular patron on any event or series of events;
(c) The unique sports wagering account ID or
			 username and authentication credentials that identify the particular account
			 holder;
(d) The identities of
			 particular sporting events or types of wagers on which the patron is wagering
			 or has wagered; and
(e) Unless
			 otherwise authorized by the patron, the name, address, and other information in
			 possession of the licensee that would identify the patron to anyone other than
			 the racing commission or the licensee.
(13) "Communications technology" means the
			 methods used and the components employed to facilitate the transmission of
			 information, such as electronic communications, and transmission and reception
			 systems based on wire, cable, radio, microwave, light, optics, or computer data
			 networks or any similar electronic agent, such as the internet and
			 intranets.
(14) "Critical employee"
			 means any employee whose duties directly impact the integrity of sports
			 wagering in the Commonwealth, including:
(a)
			 An individual who has the capability of affecting the outcome of sports
			 wagering through deployment of code to production for any critical components
			 of a sports wagering system;
(b) An
			 individual who can deploy code to production and directly supervises
			 individuals who have the capability of affecting the outcome of sports wagering
			 in Kentucky through deployment of code to production for other than read-only
			 or the equivalent access to any critical components of a sports wagering
			 system;
(c) An individual who
			 directly manages a licensee or who directly supervises an individual who
			 directly manages a licensee; or
(d)
			 An individual who has the capability to directly affect the outcome of a sports
			 wager or a payout to a patron.
(15) "Data source" means a supplier that
			 sells league or event data, participant, or team statistics necessary to enable
			 sports wagering.
(16) "Department"
			 means Department of Revenue.
(17)
			 "Electronic sports, e-sports, and competitive video game events" or "electronic
			 sporting events" means leagues, competitive circuits, tournaments, or similar
			 competitions where individuals or teams play video games, typically for
			 spectators, either in-person or online, for the purpose of prizes, money, or
			 entertainment.
(18) "Electronic
			 sporting event operator" means a person or entity which sanctions, regulates,
			 or organizes an electronic sporting event.
(19) "Geofence" is defined by
			 KRS
			 230.210.
(20) "GLI-CMP Guide" means the Gaming
			 Laboratories International, GLI-CMP: Change Management Program Guide, Version
			 1.0, Published May 6, 2020.
(21)
			 "GLI-33 Standards" means the Gaming Laboratories International, GLI-33:
			 Standards for Event Wagering Systems, Version. 1.1, and its appendices, Revised
			 May 14, 2019.
(22) "Integrity
			 monitoring" means the monitoring of sports wagering to identify abnormal or
			 suspicious wagering activities from a match-fixing and sporting corruption
			 standpoint.
(23) "Internal
			 controls," "minimum internal control standards," or "control standards" means a
			 system of internal procedures, as well as administrative and accounting
			 controls related to the integrity of sports wagering. This type of system shall
			 include wagering rules and shall be required by the racing commission as a
			 condition to sports wagering, pursuant to the license conditions issued by the
			 racing commission pursuant to
			 KRS
			 230.290(3).
(24) "Layoff wager" means a wager placed by a
			 licensee with another licensee for the purpose of offsetting sports
			 wagers.
(25) "Licensed premises" is
			 defined in KRS
			 230.210.
(26) "Licensed facility for sports wagering"
			 is defined in KRS
			 230.210
(27) "Licensee" means the holder of a sports
			 wagering operator's license or a service provider license, as
			 applicable.
(28) "License holder"
			 means any person who holds a sports wagering operator's license, a service
			 provider license, or an occupational license.
(29) "Mobile sports wagering" means the
			 conduct of sports wagering through or by means of Web sites, mobile
			 applications, or other off-site technology approved by the
			 commission.
(30) "Multi-factor
			 authentication" means a type of authentication which uses two (2) or more of
			 the following to verify a person's identity:
(a) Information known only to the person
			 (e.g., a password, pattern or answers to challenge questions);
(b) An item possessed by a person (e.g., an
			 electronic token, physical token or an identification card); or
(c) A person's biometric data (e.g.,
			 fingerprints, facial or voice recognition).
(31) "Operator licensee" or "sports wagering
			 operator" or means a Kentucky racing association licensed to conduct sports
			 wagering pursuant to KRS 230.805.
(32) "Person" is defined by
			 KRS
			 230.210.
(33) "Personal identifying information" means
			 any sensitive information that could potentially be used to identify a
			 particular patron, such as a legal name, date of birth, place of birth, social
			 security number (or equivalent government identification number), driver's
			 license number, passport number, residential address, phone number, email
			 address, debit instrument number, credit card number, or bank account
			 number.
(34) "Patron" means a
			 person who wagers on sporting events.
(35) "Pool" means an offering where patrons
			 may make selections of outcomes on a set number of sporting events and types of
			 wager on a card in order to enter for a chance to win all or a portion of the
			 prize pool.
(36) "Prize pool" means
			 the prizing available for an individual tournament, contest, or pool.
(37) "Prohibited patron" means:
(a) Any underage person;
(b) Any individual wagering while not in the
			 authorized geographic boundaries within the Commonwealth of Kentucky;
(c) Any individual wagering on behalf of
			 another;
(d) Any restricted patron
			 wagering in violation of their restrictions;
(e) Any voluntarily or involuntarily excluded
			 person; or
(f) Any individual
			 wagering in violation of commonwealth, local, or federal law.
(38) "Race and sports book" means
			 the area designated by the licensee and approved by the commission that is
			 utilized as the primary location for displaying sporting events and offering
			 sports wagering on the licensed premises.
(39) "Racing commission" is defined by
			 KRS
			 230.210.
(40) "Rake" means the fee that is deducted by
			 a licensee from entry fees paid by patrons who participate in a tournament,
			 contest, or pool.
(41) "Rake
			 adjustment" means an adjustment made by a licensee to account for any shortfall
			 in connection with a tournament, contest, or pool.
(42) "Restricted patron" means any patron
			 restricted by KRS
			 230.820 or
			 230.823 and close family members
			 of the persons included in
			 KRS
			 230.823, who are defined as parents,
			 children, grandparents, and siblings.
(43) "Self-exclusion list" means a list of
			 individuals who voluntarily excluded themselves from establishing or
			 maintaining a sports wagering account with a licensee.
(44) "Sensitive information" means personal
			 identifying information, transactional wagering data, authentication
			 credentials, and other data that shall be handled in a secure manner such as
			 PINs and passwords, and secure seeds and keys used in encryption.
(45) "Service provider" is defined by
			 KRS
			 230.210.
(46) "Shared liquidity pool" means a
			 tournament, contest, or pool offering in Kentucky and at least one other
			 jurisdiction where patrons may make selections of outcomes on a set number of
			 sporting events and types of wager on a card in order to enter for a chance to
			 win all or a portion of the prize pool.
(47) "Sporting event" is defined by
			 KRS
			 230.210.
(48) "Sports governing body" is defined by
			 KRS
			 230.210.
(49) "Sports wagering" is defined by
			 KRS
			 230.210.
(50) "Sports wagering account" or "account"
			 means an account established by an account holder for use in sports wagering
			 with a specific identifiable record of deposits, wagers, and
			 withdrawals.
(51) "Sports wagering
			 device" is defined by
			 KRS
			 230.210.
(52) "Sports wagering kiosk" means a sports
			 wagering device within a licensed facility for sports wagering that, at a
			 minimum, may be used for the submission of wagers placed by a patron directly
			 and may be used for redemption of applicable awards or prizes.
(53) "Sports wagering service provider" or
			 "service provider" is defined by
			 KRS
			 230.210.
(54) "Sports wagering system" means the
			 hardware, software, firmware, communications technology, other equipment, as
			 well as procedures implemented in order to allow patron participation in sports
			 wagering, and, if supported, the corresponding equipment related to the display
			 of the wager outcomes, and other similar information necessary to facilitate
			 patron participation.
(55) "Sports
			 wagering ticket" or "ticket" means a printed record, or digital representation
			 thereof, issued by a sports wagering system that contains information
			 pertaining to a sports wager.
(56)
			 "Sports wagering voucher" or "voucher" means a printed record, or digital
			 representation thereof, issued by a sports wagering system that may be used to
			 fund a sports wager or may be redeemable for cash.
(57) "Sufficient clarity" means the capacity
			 of a surveillance system to record images at a minimum of twenty (20) frames
			 per second or equivalent recording speed, or other recording speed approved by
			 the commission, and at a resolution determined by the racing commission to
			 clearly identify the intended activity, person, object, or location.
(58) "Surveillance operation room(s)" means
			 the secured area(s) where surveillance takes place or where active surveillance
			 equipment is located.
(59)
			 "Surveillance system" means a system of video cameras, monitors, recorders,
			 video printers, switches, selectors, and other equipment used for
			 surveillance.
(60) "Suspicious or
			 illegal wagering activity" means abnormal wagering activity that cannot be
			 explained and is indicative of any prohibited activity or conduct that may
			 corrupt the outcome of an event, including the following:
(a) Match-fixing;
(b) The manipulation of an event;
(c) Misuse of inside information;
(d) A potential breach of a sports governing
			 body's or equivalent's internal rules or code of conduct pertaining to sports
			 wagering; or
(e) Any other conduct
			 that corrupts the outcome of an event.
(61) "Supplier" means a person who provides
			 services, goods, software, or other components necessary for the creation of
			 sports wagering markets and determination of sports wager outcomes, to any
			 licensee involved in the acceptance of sports wagers, such as: providers of
			 data feeds and odds services, internet platform providers, risk management
			 providers, integrity monitoring providers.
(62) "Ticket writer station" means a sports
			 wagering device that at a minimum will be used by a ticket writer for the
			 execution or formalization of wagers placed on behalf of a patron.
(63) "Type of wager" means the form of a
			 wager offered by a licensee, such as single game bets, teaser bets, parlays,
			 over-under bets, money line bets, pools, in-game wagering, in-play bets,
			 proposition bets, and straight bets.
(64) "Underage person" means any person under
			 eighteen (18) years of age.
(65)
			 "Void wager" or "voided wager" means a sports wager that was not valid at the
			 time it was placed or a sports wager that was valid at the time it was placed
			 but has since become invalid as defined in
			 809 KAR 10:002, Section
			 8.
(66) "Voluntarily excluded
			 person" means any individual whose name is included, at their own request, on a
			 self-exclusion list.
(67) "Wager"
			 or "sports wager" means a sum of money or representation of value that is
			 risked on a sporting event for which the outcome is uncertain.
(68) "Wagering windows" means teller windows
			 dedicated to the receipt and processing of sports wagers and pari-mutuel wagers
			 on horse racing in the race and sports book location of a licensed facility for
			 sports wagering.
(69) "Website or
			 mobile application" means a website or application on a mobile phone or other
			 device through which an individual is able to place a sports wager.
(70) "Winnings" means the total cash value of
			 all property or sums, such as the currency or instruments of monetary value
			 paid to a patron by a licensee as a direct result of a winning sports
			 wager.