| 3 | 2 | | *ANS057* 03-08-2023 09:18:58 ANS057 |
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| 4 | 3 | | |
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| 5 | 4 | | State of Arkansas As Engrossed: H2/15/23 S3/1/23 S3/6/23 S3/8/23 1 |
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| 6 | 5 | | 94th General Assembly A Bill 2 |
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| 7 | 6 | | Regular Session, 2023 HOUSE BILL 1349 3 |
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| 8 | 7 | | 4 |
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| 9 | 8 | | By: Representatives Ray, V. Flowers 5 |
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| 10 | 9 | | By: Senator J. Dotson 6 |
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| 11 | 10 | | 7 |
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| 12 | 11 | | For An Act To Be Entitled 8 |
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| 13 | 12 | | AN ACT CONCERNING PA ID ESPORTS TOURNAMEN TS; AND FOR 9 |
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| 14 | 13 | | OTHER PURPOSES. 10 |
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| 15 | 14 | | 11 |
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| 16 | 15 | | 12 |
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| 17 | 16 | | Subtitle 13 |
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| 18 | 17 | | CONCERNING PAID ESPORTS TOURNAMENTS. 14 |
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| 19 | 18 | | 15 |
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| 20 | 19 | | 16 |
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| 21 | 20 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 17 |
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| 22 | 21 | | 18 |
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| 23 | 22 | | SECTION 1. Arkansas Code Title 23, is amended to add an additional 19 |
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| 24 | 23 | | chapter to read as follows: 20 |
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| 25 | 24 | | CHAPTER 118 21 |
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| 26 | 25 | | PAID ESPORTS TOURNAMENTS 22 |
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| 27 | 26 | | 23 |
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| 28 | 27 | | 23-118-101. Legislative findings. 24 |
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| 29 | 28 | | (a) The General Assembly finds that a paid esports tournament 25 |
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| 30 | 29 | | conducted in compliance with this chapter does not constitute gambling for 26 |
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| 31 | 30 | | any purpose. 27 |
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| 32 | 31 | | (b) Paid and nonpaid esports tournaments conducted in compliance with 28 |
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| 33 | 32 | | this chapter are exempt from § 5-66-101 et seq. 29 |
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| 34 | 33 | | (c) Income earned by esports tournament competitors or esports 30 |
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| 35 | 34 | | tournament organizers as a result of a paid esports tournament is taxable 31 |
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| 36 | 35 | | under the Income Tax Act of 1929, § 26-51-101 et seq. 32 |
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| 37 | 36 | | 33 |
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| 38 | 37 | | 23-118-102. Definitions. 34 |
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| 39 | 38 | | As used in this chapter: 35 |
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| 40 | 39 | | (1)(A) "Esports" means any form of multiplayer competition in 36 As Engrossed: H2/15/23 S3/1/23 S3/6/23 S3/8/23 HB1349 |
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| 41 | 40 | | |
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| 42 | 41 | | 2 03-08-2023 09:18:58 ANS057 |
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| 43 | 42 | | |
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| 44 | 43 | | |
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| 45 | 44 | | which competitors compete against each other using video gaming consoles, 1 |
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| 46 | 45 | | computers, or other electronic devices. 2 |
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| 47 | 46 | | (B) "Esports" includes the ability to compete or perform 3 |
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| 48 | 47 | | in front of an audience, and through an online platform, broadcast on 4 |
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| 49 | 48 | | television, or at an in -person event. 5 |
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| 50 | 49 | | (C) "Esports" does not include : 6 |
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| 51 | 50 | | (i) A house-banked game in which participants 7 |
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| 52 | 51 | | compete or play against the house, including without limitation an operator, 8 |
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| 53 | 52 | | rather than other participants; 9 |
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| 54 | 53 | | (ii) A casino-style gambling game or other gambling 10 |
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| 55 | 54 | | game customarily offered at a casino; 11 |
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| 56 | 55 | | (iii) A game based on or otherwise involving horse 12 |
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| 57 | 56 | | racing or dog racing; or 13 |
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| 58 | 57 | | (iv) Any electronic pull -tab game or similar 14 |
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| 59 | 58 | | traditional gambling game; 15 |
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| 60 | 59 | | (2) "Esports tournament organizer" means a person that: 16 |
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| 61 | 60 | | (A) Is engaged in the business of professionally 17 |
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| 62 | 61 | | conducting paid esports tournaments for cash prizes for esports tournament 18 |
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| 63 | 62 | | competitors; and 19 |
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| 64 | 63 | | (B) Requires cash or cash equivalent as an entry fee to be 20 |
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| 65 | 64 | | paid by a member of the general public who competes in a paid esports 21 |
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| 66 | 65 | | tournament; 22 |
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| 67 | 66 | | (3) "Esports tournament competitor" means an individual or group 23 |
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| 68 | 67 | | of individuals who function as a team that competes in a paid or nonpaid 24 |
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| 69 | 68 | | esports tournament offered by an esports tournament organizer; 25 |
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| 70 | 69 | | (4) "Nonpaid esports tournament” means any: 26 |
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| 71 | 70 | | (A) Esports event organized by an educational institution, 27 |
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| 72 | 71 | | charity, nonprofit, or other institution that awards non monetary prizes to 28 |
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| 73 | 72 | | esports tournament competitors; or 29 |
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| 74 | 73 | | (B) Event that does not require an entry or venue fee to 30 |
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| 75 | 74 | | competes in esports; 31 |
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| 76 | 75 | | (5)(A) "Paid esports tournament" means, and is limited to, any 32 |
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| 77 | 76 | | esports event facilitated by an esports tournament org anizer for a cash prize 33 |
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| 78 | 77 | | or other monetary compensation if an esports tournament competitor is 34 |
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| 79 | 78 | | required to pay an entry or venue fee to compete. 35 |
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| 80 | 79 | | (B) "Paid esports tournament" includes any esports 36 As Engrossed: H2/15/23 S3/1/23 S3/6/23 S3/8/23 HB1349 |
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| 81 | 80 | | |
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| 82 | 81 | | 3 03-08-2023 09:18:58 ANS057 |
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| 83 | 82 | | |
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| 84 | 83 | | |
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| 85 | 84 | | tournament or contest that meets the following conditions: 1 |
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| 86 | 85 | | (i) The values of all prizes and awards offered to 2 |
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| 87 | 86 | | winning esports tournament competitors in public contests, and the method 3 |
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| 88 | 87 | | through which prizing is determined, are established and made known to the 4 |
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| 89 | 88 | | esports tournament competitors in advance of the tournament or contest; 5 |
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| 90 | 89 | | (ii) All winning outcomes reflect the relative 6 |
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| 91 | 90 | | knowledge and skill of the esports tournament competitors and are determined 7 |
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| 92 | 91 | | by the results of the performance of esports tournament competitors; 8 |
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| 93 | 92 | | (iii) A winning outc ome is determined by the results 9 |
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| 94 | 93 | | of fully completed contests or events and not merely a portion of a contest 10 |
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| 95 | 94 | | or event, except that an esports tournament competitor may be credited for 11 |
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| 96 | 95 | | results in a suspended or shortened contest or event that has been suspe nded 12 |
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| 97 | 96 | | or shortened by a decision of the esports tournament organizer on account of 13 |
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| 98 | 97 | | weather or other natural or unforeseen events; and 14 |
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| 99 | 98 | | (iv)(a) Each paid esports tournament competitor is 15 |
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| 100 | 99 | | required to pay an entry fee to compete. 16 |
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| 101 | 100 | | (b) Each nonpaid esp orts tournament competitor 17 |
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| 102 | 101 | | is exempted from the requirement to pay an entry fee to compete. 18 |
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| 103 | 102 | | (c) Payment under subdivision (5)(B)(iv)(a) of 19 |
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| 104 | 103 | | this section shall be with cash or a cash equivalent and is not gambling for 20 |
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| 105 | 104 | | the purposes of § 5-66-101 et seq.; and 21 |
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| 106 | 105 | | (6) "Person" means any association, corporation, limited 22 |
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| 107 | 106 | | liability company, fiduciary, individual, joint stock company, joint venture, 23 |
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| 108 | 107 | | partnership, sole proprietorship, or other private legal entity. 24 |
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| 109 | 108 | | 25 |
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| 110 | 109 | | 23-118-103. Paid esports tournaments authori zed. 26 |
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| 111 | 110 | | (a) An esports tournament organizer is authorized to conduct a paid 27 |
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| 112 | 111 | | esports tournament through one (1) or more websites, local area networks, 28 |
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| 113 | 112 | | video gaming platforms, or other similar gaming platforms maintained and 29 |
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| 114 | 113 | | operated by the esports tournament organizer under this chapter. 30 |
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| 115 | 114 | | (b) Wagering on the outcome of an esports tournament is not authorized 31 |
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| 116 | 115 | | under this chapter. 32 |
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| 117 | 116 | | 33 |
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| 118 | 117 | | /s/Ray 34 |
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