New York, Florida Are Hot Spots For DFS
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Legal Sports Report

DFS State Watch: Monitoring Daily Fantasy Sports Action In State Government

DFS states
Last updated Sept. 8, 2016.

Daily fantasy sports is now an active topic for lawmakers, regulators, or law enforcement officials in almost two dozen states.

Below is a snapshot of the the status quo in the states with measurable potential for some type of action on DFS. For each state, we offer:

  • An outline of where things stand now for DFS
  • Links to key resources like bills or state code
  • Links to recent news coverage containing material developments

This article is updated periodically. Follow @LSPreport on Twitter for more frequent updates.

Also of note on the state front:

  • A look at state attorney general opinions here.
  • Where can you play DFS, state by state?
  • DFS legislative tracker here.

Alabama

While the state had been a relatively quiet one for DFS for a long time, that changed quickly when Attorney General Luther Strange issued cease and desist letters to FanDuel and DraftKings; both sites pulled out of the state by a May 1 deadline.

A bill that made early progress in the state hit a wall, and was not passed before the legislature adjourned.

Key links

Recent coverage

Arizona

A legislative effort to legalize fantasy sports recently popped up in one of the states where DFS is considered illegal. That bill was defeated in a committee vote, however.

This was not the first time Arizona has been down this road, and conflict with tribal interests has derailed efforts in the past. That appears to be the case again this time.

Key links

Recent coverage

California

California failed to pass a bill on DFS this year, even after action on it developed quickly. It passed a pair of committee votes and the full Assembly (vote of 62-1) in less than a month. The bill sat dormant in the Senate for months after the House action.

Tribal interests emerged as a legitimate foil to the legislative effort. Chatter is saying that the bill as written could be overhauled in the future in a way that is not as friendly to the industry. What is at question is if the tribes who have raised concerns with DFS legislation as constructed — and with its current legality — are behind the stalling of the bill.

A lawmaker has requested that Attorney General Kamala Harris explore the legality of DFS, and LSR understands that some sort of review is underway, although Harris’ office has had little comment on the matter.

Key links

  • AB 1437: Internet Fantasy Sports Game Protection Act
  • Letter from San Manuel Band of Mission Indians regarding daily fantasy sports bill to Assemblymember Adam Gray
  • Letter from Assemblymember Marc Levine to Attorney General Kamala Harris asking her to look into the legality of DFS
  • Penal code §337a, a law some believe can be applied to DFS.

Recent coverage

Colorado

An effort to regulate the fantasy sports industry cropped up late in March, and it quickly gained momentum. The legislature passed a bill, and the governor signed it into law in June — the fifth state to do so in 2016.

Key links

Recent coverage

Connecticut

A bill to give the authority to regulate the DFS industry to the Commissioner of Consumer Protection was introduced in February. The effort got a new wrinkle when it was added to a tax package for the state budget; the proposal would tax entry fees — not revenue.

The effort died after Attorney General George Jepsen said that the bill would jeopordize state revenue coming from tribal gaming. The legislature is now adjourned.

Key links

Recent coverage

Delaware

State Finance Secretary Thomas Cook said that he will have a recommendation for the legislature on how to proceed with DFS, but that hasn’t been made public if it happened. Delaware gaming regulators also have said they’re exploring the legality of DFS.

Recent coverage

Florida

A push to regulate the DFS industry quickly gained traction, as bills passed a trio of votes in January. But issues with the Seminole compact have slowed progress for DFS, and efforts to attach regulatory language to other bills has failed. With the legislature going out of session, it looks like regulation will have to wait, unless it is taken up in a special session.

Lurking in the background of that political battle is the question of DFS’ legality in Florida, and the ongoing probe by the US Attorney’s office in Tampa. Multiple operators have already exited Florida, likely in response to those forces. The state’s population and inherent legal ambiguity have made it a point of focus for the FSTA, FanDuel, and DraftKings.

Key links

News coverage

Georgia

The path for DFS in Georgia got turned on its head in a single day. A letter from the state attorney general’s office surfaced in which it offered the opinion that DFS constituted illegal gambling in the state. On the same day — in what appears to be not a coincidence — the Senate failed to take action on a DFS bill, effectively killing the effort for this year.

The state lottery has been the main opponent of DFS in the state, so far, as it sent a letter to DraftKings and FanDuel asking how they believed their contests were legal in the state. It also asked for the aforementioned AG opinion.

Key links

Recent coverage

Hawaii

Things escalated quickly in Hawaii, a state in which there is no legal gambling. The attorney general offered an opinion that DFS runs afoul of state gaming laws, at the behest of a lawmaker. Four different bills popped up on the same day, although it appears action on those is dead for 2016.

Most DFS operators — including DraftKings and FanDuel — left the state when a prosecutor issued cease-and-desist orders.

Key links

Recent coverage

Illinois

Illinois — one of the biggest battlegrounds for DFS — has seen what appears to be the end of a legislative effort for now.

Late in the legislative session, regulation proponents built momentum for a bill that passed the Senate. But it ran into trouble in the House, and the bill was shelved.

Things shifted suddenly in Illinois at the end of 2016, as Attorney General Lisa Madigan declared DFS illegal gambling under state law. DraftKings and FanDuel immediately sued the AG on Christmas Eve to have the courts find her opinion in error.

The focus in Illinois now shifts back to the courts and trial dates in June.

Key links

Recent coverage

Indiana

Indiana became the second state to officially regulate DFS in March, when Gov. Mike Pence signed a bill into law.

That progress comes after a 2015 bill did not gain any traction that would have allowed the state’s racinos to offer fantasy contests.

Interestingly, the legislation was amended to excluded contests based on college games. That came at the behest of the NCAA, which is headquartered in Indianapolis.

Key links

Recent coverage

Iowa

After a bill that would have legalized DFS made headway in 2015, a new effort was launched in a state where DFS is not legal, currently. After some initial progress, the effort in Iowa got sidelined again.

Key links

Recent coverage

Maryland

In January, Maryland’s attorney general’s office issued an opinion telling the legislature to revisit the issue of fantasy sports, since it was unclear if a 2012 law should have gone to a referendum.

That opinion created a legislative effort that would regulate the industry — including the need for a referendum for the bill to become law — in February. Two bills passed the Senate — one that would create a referendum on DFS regulation, one that would say DFS is illegal if the referendum doesn’t pass. The House took no action on the legislation before adjourning, however.

Maryland quickly turned into a hot spot after some initial chatter in the fall. The Washington Post reported that State Comptroller Peter Franchot, Attorney General Brian Frosh and staff for Gov. Larry Hogan met in December to talk about DFS. Frosh, interestingly, voted against a bill that intended to legalize fantasy sports in 2012.

Key links

Recent coverage

Massachusetts

Massachusetts is in many ways the epicenter of the DFS question, thanks in part to the fact that DraftKings is headquartered in Boston. That was confirmed when attorney general Maura Healey laid out regulations that will govern the DFS industry from a consumer protection standpoint, which she finalized in March.

In January, the state Gaming Commission produced a “white paper” regarding the issues surrounding regulation of daily fantasy sports, and the AG’s office held a public hearing about her proposed regulations.

It seems unlikely that Healey’s regulations will entirely stop a legislative effort, as key lawmakers have expressed interest in licensing and taxing DFS operators, things that Healey’s regulations do not do.

Massachusetts is also the scene of a court case in which DraftKings is suing payment processors to continue doing business with them while they accept customers in New York. The outcome of that hearing is apparently tied to the verdict in New York.

Key links

Recent coverage

Michigan

Another push-pull state, with a bill to exempt DFS from the state’s gambling laws sitting alongside an opinion from Michigan’s top gaming regulator that the games are illegal under current law.

There’s been little movement on the question since the controversy surrounding the inadvertent data leak at DraftKings. The bill’s outlook could also be complicated by the presence of the commercial casino lobby.

It appears a bill that would regulate online gambling in the state has more traction than DFS regulation.

Key links

  • SB 459, fantasy sports legalization bill

Recent coverage

Minnesota

State Rep. Joe Atkins announced plans for a DFS bill that would lightly regulate the activity in late October, and bills became reality in January. Action on the bills started picking up in the spring, one of which passed the House.

However, momentum appears to have stalled in the Senate, and the bill faces an uncertain future.

Key links

Recent coverage

Mississippi

Things ramped up over the winter in short order. First, Mississippi’s attorney general issued an opinion that DFS is illegal gambling in the state. Then, a legalization bill quickly popped up, and DraftKings and FanDuel left the state while the bill is being considered.

In the wake of all that, Mississippi’s legislature passed a bill formally legalizing DFS, and the governor signed it into law on May.

Key links

Recent coverage

Missouri

With little fanfare and no advance warning, a DFS regulatory bill popped up to end 2015. After some late movement, the bill was passed by the legislature and signed by the governor in June.

Gov. Jay Nixon is one of the few governors weighing in, but he has called DFS gambling on more than one occasion. His work ended up in the highest tax rate seen so far regarding DFS.

Key links

Recent coverage

Nebraska

After a public hearing was held to consider a DFS regulatory effort, the bill is dead for now.

Key links

News coverage

Nevada

Nevada had largely been off the radar since the AG’s office and the state gaming commission said DFS was gambling under state law — and would require a gaming license — prompting all operators to leave the state.

Then, in January, Gov. Brian Sandoval said he wanted the state’s Gaming Policy Committee to look at possible regulation of the industry.Not much progress was made toward a solution during a meeting in March, but it set the stage for future talks.

News coverage

New Jersey

A regulatory bill that would treat DFS much like online poker and gambling in the state was formally introduced in March, and it passed a committee hearing 5-0. DraftKings and FanDuel currently oppose the bill, as it calls DFS “gambling.”

The state’s ongoing court battle over sports betting takes priority over anything having to do with DFS, meaning a DFS bill could easily be delayed for months while that court battle resolves.

Key links

Recent coverage

New Mexico

Bills were introduced in the winter, but made no progress and are dead for the time being.

Key links

News coverage

New York

Daily fantasy sports is legal again in New York. That followed a legal battle in the courts, and a last-minute effort that saw a regulatory bill passed by the legislature in June. Gov. Andrew Cuomo later signed that bill into law.

That legislation was set up when DraftKings and FanDuel reached settlements with the New York attorney general, Eric Schneiderman. As part of that deal, DraftKings and FanDuel left the state until at least September, when an appeals case will be heard. The two DFS operators are hoping a legislative answer can be found in the meantime.

How did we get here? Schneiderman issued cease and desist orders to DraftKings and FanDuel in November. An emergency hearing was held to consider injunctions from the AG against FanDuel and DraftKings the same month. A Supreme Court judge found on the side of the NY AG on Dec. 11, but an appeals court put a stay on the preliminary injunction, reinstating the status quo, before DK and FD exited the state in March.

Key links

Recent coverage

Ohio

A legislative committee has indicated it will take up the issue of DFS and a issue a report before the end of 2015. That report — which glossed over DFS issues with a promise of a closer look in 2016 — will obviously shape what happens moving forward in Ohio.

Recent coverage

Oklahoma

After a regulatory effort has popped up early in 2016, the brakes went on when a coalition of tribes opposed legislation. That appears to mean that regulation is off the table in the short term.

Key links

News coverage

Pennsylvania

While Pennsylvania looked like it would act quickly on DFS in the fall of 2015, it slowed considerably since.

The state passed legislation that authorized a study by the gaming control board this spring. After that, a bill that would legalize DFS surfaced, and then was amended to include online gambling and several other gaming expansions in the state.

That bill passed the House, and could be taken up by the Senate this fall or early in 2017.

Key links

  • HB 1197 (bill possibly to be amended to cover DFS regulation)
  • HB 649 (bill possibly to be amended to cover DFS regulation)
  • HR 663 (bill to study DFS)

Recent coverage

Rhode Island

In February, Rhode Island’s attorney general offered an opinion that daily fantasy sports is legal in the state while calling on the legislature to regulate the industry.

Key links

News coverage

South Dakota

The state attorney general recently opined that daily fantasy sports is not legal in South Dakota, but indicated that he is waiting for guidance from the state’s Gaming Commission. Later, he said he would not pursue indictments, but would look at “civil remedies.”

Regulators considered daily fantasy sports in a meeting in November, but said it lacked the authority to regulate the industry. That seemingly leaves the ball in the court of the state AG and the legislature.

News coverage

Tennessee

A bill that would create a task force for fantasy sports and promulgate regulations cropped up in the legislature in January; and it passed the legislature in April. It awaits the signature of the governor.

That came before an attorney general opinion that DFS is illegal gambling under state law.

Key links

News coverage

Texas

The state’s attorney general declared that DFS would like be considered to be gambling if the issue came up in the courts. FanDuel reached a settlement to leave Texas in May with AG Ken Paxton, while DraftKings is fighting in court.

A legislative effort will have to wait, as the legislature will not be in session until 2017. A bill earlier in the year sought to regulate the industry, but it was never seriously considered.

Interestingly, the Texas Lottery was pursuing DFS one point, according to a report in January.

Key links

News coverage

Vermont

An official in the attorney general’s office has said publicly that DFS amounts to illegal gambling in the state. Just before that, a regulatory bill was introduced. That bill passed the Senate but was not passed before the legislature adjourned.

Key links

News coverage

Virginia

Virginia officially because the first state to regulate fantasy sports, when Gov. Terry McAuliffe signed a bill in March.

How many sites actually sign up for the regulatory scheme is an open question, however. The $50,000 registration fee might keep most operators other than DraftKings and FanDuel out of the market. And paid-entry seasonlong operators cried out against the bill before it became law.

Key links

News coverage

Washington

Washington state — where DFS is currently considered to be illegal — had multiple legislative initiatives in the works. Those are all dead for the time being because they didn’t make progress during a short legislative session.

Key links

News coverage

West Virginia

Momentum built quickly for a bill that legalizes fantasy sports, but the legislature. Introduced in February, a bill has already passed the full Senate; however, the legislature adjourned without taking it up in the House.

Key links

News coverage

Wisconsin

A bill was introduced and quickly discussed in a public hearing in January. The state Assembly has already adjourned for the session, meaning not much can happen in the short term.

News coverage

Dustin Gouker contributes to and updates this article.

Chris Grove
Chris Grove - Chris is the publisher of LegalSportsReport.com and OnlinePokerReport.com. Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.