DFS Legislation Update
In the ongoing fight for legal clarification in daily fantasy sports, the state-by-state slog marches on, with more good news than bad in recent weeks.
Here’s a quick rundown:
OVERVIEW
States with bills signed into law: Indiana, Tennessee, Virginia, Mississippi
States with bills pending signature by governor: Missouri, Colorado
States where most DFS companies do not operate: Alabama, Arizona, Hawaii, Idaho, Iowa, Louisiana, Montana, Nevada, New York, Texas (DraftKings still active), Washington
STATE-BY-STATE UPDATES
NEW YORK
What happened: Nothing yet, but a buzz is growing that a bill from state Assemblymember John Pretlow could be introduced this week.
What it means: Good news, or at the very least, better than no news. There hasn’t been much coming out of New York in recent weeks, and the legislative session ends on June 16. Pretlow has said previously he planned to introduce a bill to regulate DFS, and his Committee on Racing and Wagering has already discussed the industry in a hearing in December, so this might be the bill New Yorkers have been waiting for.
What players need to know: If/when a bill picks up momentum in New York, it’ll be big news for players in the state and beyond. New York is one of, if not the single largest market in the DFS industry, and its absence is no doubt being felt by DraftKings and FanDuel, who ceased operating in the state in March.
MISSISSIPPI
What happened: SB 2541 has been signed into law by the governor.
What it means: Overruling a recent opinion by the attorney general that forced operators to flee, DFS will soon be live again in the Magnolia State.
What players need to know: There’s now a registration process operators must go through, and we’re waiting to hear back on precisely how long that might take, because players are chomping at the bit to get back in the game. The bill will repeal itself on July 1, 2017, so expect the state to take further action by then under the direction of the newly formed Fantasy Contests Task Force. As it stands, the minimum age is set at 18.
COLORADO
What happened: Last week Colorado became the fifth state this year to send a DFS regulation bill to the governor.
What it means: It’s another positive step in the DFS industry’s state-by-state battle for a clearly defined legal landscape. The governor has 30 days to sign or veto the bill from the time it arrives on his desk. Given the wide majorities with which it advanced in the state legislature, it would be surprising if Gov. John Hickenlooper opts to veto. If the bill is signed or if no action is taken by the governor, it will go into effect on Aug. 10.
What players need to know: The provisions set forth in the bill are similar to those seen elsewhere, with a ban on play by site employees, a three-percent cap on the maximum number of entries from a single player in a field, and a minimum age of 18.
MISSOURI
What happened: Soon after Colorado, Missouri’s legislature also passed a bill to legalize and regulate DFS.
What it means: The bill, which excludes DFS from state gambling law, is now awaiting the signature of Governor Jay Nixon. He previously called for the state to regulate and tax DFS, and his approval is expected. The bill includes a hefty taxes and fees, which were not popular with some smaller operators.
What players need to know: The minimum age will be set at 18 and college contests are off limits.
MINNESOTA
What happened: HF2530 stalled in a Senate committee hearing and has been tabled.
What it means: A setback here for Minnesotans. The bill had already passed through the state house with relative ease, but began to drag, taking on amendments in the Senate. It hit a wall in the Taxes Committee when committee chair Rod Skoe voiced opposition and bill author Sandy Pappas agreed to pull back for now.
What players need to know: There’s no immediate change in terms of DFS availability. Most operators continue to operate in Minnesota.
ILLINOIS
What happened: There’s been no news since a bill that would regulate DFS in the state passed out of committee in April.
What it means: With the legislative session concluding at the end of the month, the lack of updates is somewhat concerning, but industry sources say movement could come quickly if behind-the-scenes agreements are reached.
What players need to know: Next to New York, Illinois is the next biggest prize up for grabs in 2016. The state has been a key battleground since Attorney General Lisa Madigan issued an opinion in December calling DFS illegal gambling in the state. Most operators continue to do business in the state for the time being.
IDAHO
What happened: FanDuel and DraftKings ceased operations in Idaho on May 1 as part of an agreement with the state attorney general.
What it means: Idahoans are sidelined for now, as all major operators have pulled out.
What players need to know: The AG’s decision that DFS is illegal gambling in the state can be rendered moot if the state legislature moves to exclude it from the definition via new legislation. As of now, no such bill has been introduced in the state.
CONGRESSIONAL HEARING
What happened: Not much. That’s the short version. By most accounts, the hearing held last week was a platform for Rep. Frank Pallone of New Jersey to advocate for the legalization of sports betting. DraftKings and FanDuel declined to attend.
What it means: More hearings are possible, but federal action appears to be far away.
What players need to know: For now, the path toward legalization and regulation is the state-by-state approach the industry has been pursuing.