Block App-Store Gambling Ads in States Without Online Gambling

A BILL FOR AN ACT

RELATING TO UNAUTHORIZED SPORTS WAGERING ADVERTISING IN APP STORES; PROHIBITING
THE SALE, PURCHASE, AND DELIVERY OF PAID APP-STORE PLACEMENTS THAT PROMOTE OR
FACILITATE UNAUTHORIZED COVERED WAGERING PRODUCTS TO DEVICES LOCATED IN THIS
STATE; PROVIDING DEFINITIONS, NOTICE, SAFE HARBOR, ENFORCEMENT, PENALTIES,
RECORDKEEPING, AND RULEMAKING; AND PROVIDING AN EFFECTIVE DATE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF [STATE]:

SECTION 1. SHORT TITLE.
This Act may be cited as the "Block App-Store Gambling Ads in States Without Online Gambling".

SECTION 2. LEGISLATIVE FINDINGS AND PURPOSE.
  (1) Findings. The Legislature finds that:
      (A) paid promotional placements within app stores are a significant user-acquisition channel
          for real-money sports wagering products;
      (B) this State prohibits offering real-money sports wagering to persons located in this State
          except as expressly authorized by State law; and
      (C) products marketed as "event contracts," "prediction markets," or "sports outcome trading"
          may function as wagering on sporting outcomes and may be promoted through paid app-store placements.

  (2) Purpose. The purpose of this Act is to prohibit the sale, purchase, and delivery of paid
      app-store placements to devices located in this State that promote or facilitate unauthorized
      sports wagering products, while avoiding regulation of organic app listings and other non-paid
      app-store content.

SECTION 3. DEFINITIONS.
For purposes of this Act:
  (1) "App store" means a digital distribution platform, marketplace, or storefront that offers
      software applications for download or installation on consumer devices, including associated
      in-store search, browsing, recommendation, ranking, and advertising interfaces.

  (2) "Paid app-store placement" means any paid, sponsored, promoted, or otherwise compensated
      advertising unit, ranking, tile, banner, interstitial, "featured" placement, or sponsored
      search result displayed within an app store interface, including search results and browse pages,
      for which consideration is provided directly or indirectly to the app store, its advertising
      network, or any intermediary in exchange for distribution, targeting, or preferential visibility.
      "Paid app-store placement" does not include an app's non-paid listing, non-paid search result,
      ratings/reviews, or other organic content not provided preferentially in exchange for consideration.

  (3) "Device located in this State" means a device for which location at the time of impression is
      reasonably determined to be within this State using one or more signals, including GPS, Wi-Fi
      positioning, cell-site data, device location services, or IP-based geolocation.

  (4) "Sports wagering" means staking, risking, paying consideration for, or otherwise putting
      something of value at risk, directly or indirectly, on the outcome of a sporting event or the
      performance of one or more participants in a sporting event, including wagers commonly described
      as bets, parlays, props, in-play wagers, pools, or similar, where the opportunity to win or lose
      is predominantly contingent on the occurrence or non-occurrence of future sporting outcomes.

  (5) "Sports outcome contract" means any contract, agreement, instrument, token, position, or right,
      regardless of label, including an "event contract," "prediction contract," "binary contract,"
      "swap," "derivative," "futures," "option," or "contract for difference," under which a person
      pays, deposits, posts margin, pays a fee or spread, exchanges consideration, or otherwise commits
      something of value to enter, purchase, sell, trade, hold, or settle a position, and under which
      the person's profit, loss, payout, settlement amount, credit, or other thing of value is determined
      in whole or in part by:
        (A) the outcome, score, occurrence, or timing of a sporting event;
        (B) whether a sporting event occurs, is canceled, postponed, or otherwise modified; or
        (C) the performance, including statistics or achievements, of one or more participants or teams
            in a sporting event.
      In determining whether a product is a Sports outcome contract, the Attorney General and courts
      shall consider economic substance and consumer presentation, including whether the product is
      promoted or used by consumers primarily to express a view about, or profit from, a sporting
      outcome rather than to hedge a commercial exposure. A product may be a Sports outcome contract
      even if structured as a market, includes secondary trading, uses yes/no shares, is described as
      trading or investing, or is cleared or settled through a third party.
      "Sports outcome contract" does not include:
        (i) securities registered under federal securities laws;
        (ii) bona fide consumer or commercial insurance products regulated as insurance under State law; or
        (iii) reward programs or contests that do not require consideration and do not permit a participant
              to receive a payout or thing of value determined by a sporting outcome.

  (6) "Covered wagering product" means any app, service, or platform that, for persons located in this State:
        (A) offers, facilitates, enables, or accepts Sports wagering;
        (B) offers, facilitates, enables, lists, brokers, matches, clears, settles, or provides access
            to Sports outcome contracts; or
        (C) provides a user interface, funding pathway, or call-to-action that materially supports a
            person in entering, purchasing, selling, trading, or settling Sports outcome contracts.

  (7) "Unauthorized" means not expressly authorized to be offered to persons located in this State
      under the laws of this State, including licensing or registration requirements administered by
      [STATE GAMING REGULATOR], regardless of whether the product is also subject to federal regulation,
      except to the extent State law expressly recognizes such federal authorization as sufficient for
      offering the product to persons located in this State.

  (8) "Promote or facilitate" means to advertise, solicit, induce, market, encourage, or provide a
      direct call-to-action to download, install, open, fund, trade, wager, enter positions, or settle
      positions on a Covered wagering product, including by offering or advertising sign-up bonuses,
      deposit matches, fee rebates, risk-free offers, credits, enhanced odds/prices, referral incentives,
      or similar inducements.

  (9) "Person" includes an individual, corporation, partnership, association, trust, limited liability
      company, or any other legal entity.

  (10) "Sporting event" means any professional, collegiate, amateur, or Olympic athletic competition,
       race, match, game, tournament, or similar contest, including esports if conducted as a competition
       with outcomes determined by performance.

SECTION 4. PROHIBITED ACTS.
  (1) Sale and delivery. An app store, advertising network, or any person acting on its behalf shall not
      sell, provide, deliver, or cause to be delivered a Paid app-store placement that Promotes or
      facilitates an Unauthorized Covered wagering product to a Device located in this State.

  (2) Purchase. No operator, advertiser, affiliate, marketing agency, or other person shall purchase,
      procure, pay for, or cause to be purchased a Paid app-store placement that Promotes or facilitates
      an Unauthorized Covered wagering product to a Device located in this State.

  (3) Aiding and abetting. No person shall knowingly aid, abet, conspire, or coordinate with another to
      violate this Section, including by providing creative, targeting parameters, tracking links,
      conversion optimization, or campaign management services for prohibited placements.

SECTION 5. KNOWLEDGE STANDARD; NOTICE; SAFE HARBOR.
  (1) Knowledge standard. For civil enforcement under this Act, a person acts knowingly if the person:
        (A) has actual knowledge;
        (B) has received written notice under subsection (2) and failed to take reasonable steps to comply; or
        (C) recklessly disregards facts indicating that the placement promotes or facilitates an Unauthorized
            Covered wagering product delivered to devices in this State.

  (2) Notice list and cure. The Attorney General may issue written notices identifying specific apps,
      package identifiers, developer accounts, domains, advertiser accounts, creative, or products that the
      Attorney General reasonably believes constitute Unauthorized Covered wagering products under State law.
        (A) Within 10 business days of receipt, a recipient app store, advertising network, or other recipient
            shall either:
              (i) cease delivery of prohibited placements to devices in this State; or
              (ii) provide a written explanation with supporting documentation that the product is Authorized.
        (B) Compliance with this mechanism may be considered evidence of reasonableness under subsection (3).

  (3) Safe harbor for app stores and ad networks (first violation). An app store or advertising network
      shall not be liable for a first violation of Section 4(1) if it demonstrates by a preponderance of
      the evidence that it:
        (A) maintains and enforces a policy requiring gambling-related advertisers to comply with applicable
            State laws and to implement age and location targeting;
        (B) deploys reasonable technical measures to avoid delivering prohibited placements to devices located
            in this State; and
        (C) promptly investigates and remediates upon receiving notice under subsection (2).

  (4) No safe harbor for purchasers after notice. The safe harbor in subsection (3) does not apply to
      advertisers, operators, affiliates, or agencies that purchase prohibited placements after receiving
      notice under subsection (2), or after receiving written notice from the app store or advertising network
      based on such notice.

SECTION 6. ENFORCEMENT; REMEDIES; PENALTIES.
  (1) Public enforcement only. This Act shall be enforced exclusively by the Attorney General. Nothing in
      this Act creates a private right of action.

  (2) Civil penalties. A person who violates Section 4 is subject to:
        (A) a civil penalty not exceeding $10,000 per day per campaign for prohibited placements delivered to
            devices located in this State, or $250,000 per campaign, whichever is greater; and
        (B) disgorgement of amounts paid for prohibited placements (for purchasers) or received from prohibited
            placements (for sellers).

  (3) Injunctive relief. The Attorney General may seek temporary, preliminary, and permanent injunctive
      relief to prevent and restrain violations.

  (4) Penalty factors. In determining the penalty amount, a court shall consider:
        (A) duration of the violation;
        (B) number of impressions delivered to devices in this State, if reasonably ascertainable;
        (C) whether the conduct continued after notice;
        (D) degree of targeting to this State;
        (E) presence of inducements such as bonuses, deposit matches, or fee rebates; and
        (F) compliance controls and remediation efforts.

SECTION 7. RECORDKEEPING.
  (1) Retention. Any app store, advertising network, and any purchaser of Paid app-store placements shall
      retain for 24 months records sufficient to demonstrate compliance, including:
        (A) campaign identifiers;
        (B) targeting parameters used for location;
        (C) dates and jurisdictions of delivery, as maintained in ordinary course; and
        (D) the creative shown.

  (2) Production. Records shall be produced to the Attorney General upon reasonable request, subject to
      protections for trade secrets and confidential business information under State law.

SECTION 8. RULEMAKING.
The Attorney General may promulgate regulations necessary to implement this Act, including:
  (1) further specification of what constitutes a Paid app-store placement in emerging formats;
  (2) standards for reasonable technical measures for in-state geotargeting; and
  (3) procedures for notice and response under Section 5(2).

SECTION 9. CONSTRUCTION; SCOPE; SEVERABILITY.
  (1) Scope limited to paid placements. This Act regulates only paid app-store placements delivered to
      devices located in this State. Nothing in this Act shall be construed to require removal or suppression
      of any non-paid app listing or organic search result.

  (2) No regulation of news or commentary. Nothing in this Act shall be construed to regulate or prohibit
      truthful non-promotional news, commentary, academic content, or other speech not constituting a Paid
      app-store placement.

  (3) Severability. If any provision of this Act or its application is held invalid, the invalidity does
      not affect other provisions or applications that can be given effect without the invalid provision or
      application.

SECTION 10. EFFECTIVE DATE.
This Act takes effect 90 days after enactment.