WSOP
Legal Sports Report

Daily Fantasy Sports In California

California has emerged as one of the “hot spots” for daily fantasy sports, and could become the first state to pass a bill regulating daily fantasy sports.

History of DFS in in California

Like most states in the U.S., DFS operators have taken customers in the state throughout the industry’s short history (since the Unlawful Internet Gambling Enforcement Act was passed in 2006 with a carveout for fantasy sports).

California was one of the first states to propose regulation of DFS in September of 2015 — even before the DraftKings data leak that spurred governmental and media scrutiny.

Since then, there has been a lot of chatter, and action. Here’s a brief timeline of what has happened in the state:

The DFS bill in California

The regulatory measure in California is AB 1437 — full text and bill tracking here. It is called the “Internet Fantasy Sports Games Consumer Protection Act.”

What the bill does

The bill sets up a regulatory framework overseeing DFS. Here is a look at some of the provisions of the bill:

  • Operators would have to apply for licenses to operate DFS contests in California.
  • The licensing fee for operators is to be determined.
  • Players’ funds must be segregated from a site’s operating funds.
  • Players would have to be a minimum of 21 years old. (The current minimum age is generally 18 for DFS play.)
  • A number of other consumer protections are a part of the bill, including sites providing a means for players to self-exclude themselves and implementing data security protocols.
  • The bill allows the state to assess civil penalties for violations of the act.

Who could operate

Pretty much anyone who wants to run a DFS site in California is eligible to do so. That would mean that all existing gaming interests in the state — tribal casinos, tracks and cardrooms — could offer DFS or partner with an existing operator.

Operators must pay the licensing fee — which is to be determined. The Department of Justice will be charged with creating regulations about who is suitable for licensure.

Where bill is now and what needs to happen to become law

The bill is currently on the full Assembly floor, after passing a pair of committee votes.

The bill must pass by a two-thirds majority, because it is a revenue bill.

If and when it passes the Assembly, it will move to committee in the state Senate.