Legislation Update: Big News In NY
After nearly eight months on the defensive, the DFS industry is celebrating today thanks to a crucial—and arguably essential—legislative victory in the wee hours of Saturday morning.
Fittingly, the win came in New York, the state that became the flashpoint of an unfurling nationwide legal battle after Attorney General Eric Schneiderman issued an opinion laced with pointed rhetoric, stating that DFS was illegal gambling according to state laws.
Pending Governor Andrew Cuomo’s signature, the bill passed this weekend will render that opinion moot and set the stage for the return of DFS after most operators fled the state in recent months.
Read on for details in New York and for an update on the push for legislation in Pennsylvania.
Overview
States with bills signed into law: Indiana, Tennessee, Virginia, Mississippi, Colorado, Missouri
States with bills pending signature by governor: New York
States where most DFS companies do not operate: Alabama, Arizona, Hawaii, Idaho, Iowa, Louisiana, Montana, Nevada, New York, Texas (DraftKings still active), Washington
Updates
NEW YORK
What happened: It passed! A little before 3 a.m. Eastern on Saturday morning, about 36 hours after the originally scheduled session adjournment, the New York State Senate passed S8153, which will legalize DFS and enact a series of regulations on the industry, similar to those seen in other states where bills have recently been signed into law. The State Assembly had passed an identical version of the bill earlier in the day, and it now heads to Cuomo’s office to await his signature before becoming law.
What it means: The return of New York to the marketplace could be a pivotal moment in the history of DFS. If Cuomo signs as expected, New York will become the seventh state make DFS clearly legal in 2016; it is also the largest and perhaps most influential. Whether other states will view the action taken in New York as a guidepost is a matter of speculation, but this much seems inarguable: It can’t hurt. With the win in New York, the recent setback in Illinois is buffered significantly and momentum is on the side of the industry. It also means a significant boost to operators’ bottom lines. Some estimates put the percentage of the total DFS player population based in New York at higher than 10 percent, and their entry fees have certainly been missed.
What players need to know: Once the bill is officially delivered to Cuomo, he’ll have 10 days to sign or veto it. If he takes no action, the bill automatically becomes law. Cuomo was involved to some degree in helping craft the bill, and the wide margins by which the bill passed (91-22 in the Assembly, 45-17 in the Senate) would seem to make a veto unlikely. Once the bill becomes law, operators will need a permit from the New York State Gaming Commission before accepting customers in the state again. It took a few weeks for sites to clear a similar process in Mississippi earlier this year, so it’s not immediately apparent precisely when New York-based players may have access to games again.
PENNSYLVANIA
What happened: The bill introduced last week that would legalize and regulate DFS in the state while instituting fees, taxes and consumer protection measures advanced through its first committee with unanimous approval.
What it means: We’re still very early in the process for this bill, but so far, so good.
What players need to know: Regardless of the outcome for this particular bill, lawmakers in the state have said that DFS companies will be able to continue operating in the state. At question is whether they’ll be operating in a regulated or an unregulated environment. That’s another bit of welcome news. As written, the bill eschews a recommendation from the state’s gaming commission that would’ve required operators to partner with existing gambling license holders in Pennsylvania.