In Mississippi, daily fantasy sports operators became subject to new laws in July 2017. Senate Bill 2541 created the Fantasy Contest Act and was set to expire on July 1, 2017. State lawmakers were expected to pass permanent legislation before that date—which they did on March 13, 2017, when Gov. Bryant signed House Bill 967 into law. Among other things, the law requires a surety bond from DFS operators in the state.
Comparing SB 2541 and HB 967: Fantasy Sports Regulation Insights
SB 2541 appointed a task force to create a legal framework for daily fantasy sports to operate in the state of Mississippi. The industry is regulated by the Mississippi Gaming Commission (MGC). This bill allowed DFS companies to operating legally until regulations were put in place for the industry.
Those permanent regulations were implemented with HB 967’s passage and July 1, 2017 effective date. This bill created procedures for the registration and taxation of daily fantasy sports in Mississippi.�DFS operator applicants�need to register with the MGC and provide information that includes the following:
- Business name and contact information (phone numbers, physical and mailing addresses, etc.)
- Tax ID number
- Business type (partnership, LLC, etc.)
- Names and addresses of all partners, owners, directors, and stockholders
- List of executive employees with their addresses and job titles
- DFS contest operator’s personal information, including among other things, name, date of birth, social security number, home address, and distinguishing marks or tattoos
- Recent photograph of operator applicant
- Surety bond to protect players’ funds
Daily fantasy sports operator applicants must disclose their finances in depth when registering�including listing all assets�bank accounts, business investments, real estate holdings, stocks and bonds�belonging to the operator and their spouse and dependents (if applicable). Applicants must also list all debts owed to them and/or their spouse and dependents, as well as all debts owed by any of those individuals.
Along with a completed application, DFS operators pay a nonrefundable $5,000 fee to the MGC for their three-year license term. Applicants must submit their registration application through the mail addressed to the Mississippi Gaming Commission, Attn: Paul Waldorp. If you’re submitting with USPS, use this address:
P.O. Box 23577 Jackson, MS 39225
Those submitting with FedEx or UPS should use a different address:
620 North St., Suite 200 Jackson, MS 39202
DFS surety bond
Both SB 2541 and HB 967 stipulate that financial assurance is required of daily fantasy sports operators to secure players’ funds. Bond coverage amount will vary depending on the applicant, since it needs to cover the total account balances of all players. For DFS companies with a large number of users, like DraftKings or FanDuel, this can mean a big surety bond.
The bond is in place so that players don’t lose the money in their accounts on the sites. Should the company go under and a player lose the money in their account, the player can file a claim against the surety bond to recover that money. DFS companies are motivated to prevent that from happening, since they have to repay the surety for any claims that are paid out.
Daily fantasy sports operators have the option of maintaining a combination of surety bonds, cash or cash equivalents, an irrevocable letter of credit, and payment processor reserves and receivables as proof of financial security.
Ready to get a surety bond in Mississippi? Get started with Single Source Insurance!��