Print Blog Article

State Government Actions on Daily Fantasy Sports: A snapshot of where things stand for DFS ‘state by state’

Wed, Dec. 28, 2016 Posted: 01:02 PM

Started off as a recreational activity, Fantasy sports have now been changed by big market players into a mass money making activity which is an expansion of gambling... as stated by state governments.

Over two dozen states are showing slow progress into the regulation of DFS (Daily Fantasy Sports), while some states have already considered it illegal. There were also some victories for the legalization of DFS industry in different states in 2016.

Robert Tomlinson, the State Senator for Pennsylvania advised the members of state ‘House of Representatives’ earlier this month, “not to rush into the matter. The formal legalization of the activity needs careful consideration about whether and how to do it.”

The primary concern of Tomlinson about DFS is to identify whether the activity is completely based on chance or skill. They doubt the business models of the two leading commercial operators of the industry “DraftKings and FanDuel”, who appear to merge into one company (according to recent press reports). He also highlighted that, such market dynamics may further deform the market and potentially decrease the revenue to be garnered by Commonwealth.

Just same as in Pennsylvania, DFS is an active topic for many other state governments. Below is an outline of status quo of pending regulation process of DFS in different states.

Alabama government did not restrict the operation of DFS until the very next day after Tennessee won the DFS in March. Governor, Bill Haslam then issued the immediate cease and desist letters to both the primary operators of DFS “DraftKings and FanDuel”. This was in response to the review of Alabama’s gambling law that determined paid DFS contests as illegal gambling.

Paid-entry DFS was always considered illegal in Arizona. But repeat attempts have been made by government to rethink the decision. The latest governmental effort was made in March this year and this bill was also defeated in the committee vote. The main reason of this is their conflict with tribal interests ‘Arizona Indian Gaming .

In January, it appeared that DFS would get its first legislative victory via California as the bill sped through the state committee received just one negative vote in the Assembly. But ever since, the bill lies dormant.

The bill to regulate the DFS industry in the state was adjourned by legislature on the basis that the state revenue coming from tribal gaming would jeopardize.

Delaware state government and gaming regulators are still investigating the benefits and issues related to legality of DFS.

Florida has been one of the main battlegrounds for DFS industry, however not much action was seen until today. The bill of legislation was presented in November last year, but no decisions have been taken up until now.

A letter issued by the Attorney General’s Office in February 2016 stated DFS constitute illegal gambling activities. But, the Senate has failed in taking actions on these DFS bills effectively.

Hawaii is a state with no legal gambling and same applies to DFS. The attorney general of the state suggested that Fantasy Sports run afoul of their gaming laws. As a result four different bills popped up against it the same day, however there is no action on these. Almost all DFS operators have left the state ever when a prosecutor issued the cease-and-desist orders.

Earlier this year, in the legislative session, a momentum was built by the proponents and the bill passed the Senate. But later it faced troubles in the House, because of which the bill was shelved. And things shifted against the bill suddenly, as Attorney General Lisa Madigan declared that DFS is illegal gambling as per state law.

A bill passed in 2015 considered Daily Fantasy Sports for real money to be illegal. But repeat attempts have been made to consider the case again which has got sidelined for the time being.

The Maryland state legislature didn’t pass any legislation relating DFS on any of the two bills presented. And the legislature is not set to meet again until 2017, so it could take around a year or more to hear anything about DFS regulation in Maryland.

In January 2016, the Gaming Commission of state prepared a white paper with regards their issues surrounding the regulation of DFS for which a public hearing was also held at s, and the AG’s office. And it seems that some lawmakers are interested in licensing DFS operators, while Healey’s regulations do not want to.

Just like many other states, a bill supporting regulation of DFS remains pending with opinions from top gaming regulators that the DFS is illegal under current law. And there is very little movement in the matter as a bill that’s discussing the regulation of online gambling has more grip than regulation of DFS.

The state government had plans to legalize DFS by October 2015, as announced by the state representative, Joe Atkins. The bill did come to reality in January but no action seems to have taken place since then and the bill faces an uncertain future.

The state government considers DFS as gambling under the state law and therefore each operator needs to have a gaming license because of which all operators stopped operating in the state.

New Jersey
A regulatory bill treats DFS like online gambling to which the primary DFS operators complete oppose. The ongoing court case is delayed because of its preference to look at the sports betting issues first over anything else. So DFS bill is delayed for months and currently being considered illegal.

New Mexico
All DFS operators are active in the state, however there is no official regulation for DFS operation in the state.

After a governmental effort early in 2016 to regulate DFS in the state, the bill was defeated by a union of tribes that opposed the legislation. And from this it appears that DFS regulation is off the table for a long term.

As discussed earlier, the state government is yet to decide whether to legalize DFS or not. The bill is pending in the house and can be taken up early in 2017.

South Dakota
The state attorney general opined that DFS is illegal in South Dakota because the state lacked the authority to regulate the industry.

The state’s attorney general has already declared DFS as gambling for which FanDuel reached at a settlement to leave Texas while DraftKings is still fighting in court but meanwhile DraftKings continues to take customers from the state.

Vermont, Washington, West Virginia and Wisconsin
Repeat bills have been officially introduces in all these states but mostly these were adjourned by legislature without being taken up in the house. And not much seems to be happening here about the regulation of DFS in the near future.

Dylan Moran