The introduction of the DFS bill points to the idea that real progress has been made toward legalization of the industry just three weeks before the adjournment of the legislature.
When asked in an interview of the bill’s chances to pass through the legislature after a lot of front-end work had been done by him and his office, Pretlow was optimistic.
“I am pretty sure it will have smooth sailing,” Pretlow told Legal Sports Report.
New York is the biggest legal battleground for the embattled DFS industry. DraftKings and FanDuel stopped operating in New York this spring as a part of a settlement with Attorney General Eric Schneiderman. That settlement was based on the idea that the legislature would attempt to formally legalize DFS.
The NY DFS bill has arrived
The bill was officially introduced late in the day on Friday. The bill will likely be heard next week in the Committee on Racing, Gaming and Wagering which Pretlow chairs.
The bill has been long-awaited in the Empire State, as Pretlow has told various media outlets and constituents this spring that he has been working on a bill to regulate and legalize DFS. Indications had pointed to the bill being introduced last week, but that effort was delayed as the legislation was being finalized.
The late arrival of the bill has resulted in some hand-wringing as the statehouse faces a June 16 deadline to pass legislation. GamblingCompliance (paywall) recently reported that Pretlow scrapped a plan to wait for feedback from Schneiderman on his bill.
What is in the Pretlow bill
The final version of the bill — A10473 — can be seen here. Among the major provisions of the bill:
- Oversight of the industry is given to the New York State Gaming Commission, which will license DFS sites and promulgate regulations.
- Operators that were serving New York before Schneiderman’s cease and desist orders can serve the state after application for a license and before licensure. This will allow DFS sites to return to operation more quickly.
- There will be a tiered licensure system that should allow smaller operators — i.e. not DraftKings and FanDuel — to operate in the state. ($100,000 fee if in-state revenue exceeds $200,000; $25K fee for revenue between $100K and $200K; $5K if revenue is under $100K; licenses are good for three years.)
- There will be a 15% tax on gross revenue generated by New York state players.
- Operators must provide evidence of a surety bond in the amount of $1 million.
- Fantasy contests based on amateur sporting events — including college sports — and horse racing are prohibited.
- A minimum age of 18 is set for DFS players.
A number of consumer protections are in the bill, including:
- Having sites take steps to prevent minors from playing and provide access to parental controls;
- Sites must depict chances of winning in all advertisements and upon contest entry;
- Sites must allow players to self exclude themselves and provide resources for compulsive play;
- Sites must identify “highly experienced players’;
- Sites must segregate player and operational funds.
“I am very confident in the bill [from a consumer protection standpoint,” Pretlow told LSR.
There are differences from Bonacic’s amended bill, but not so drastic that they cannot be worked out. Bonacic sounded optimistic about conforming his bill and Pretlow’s in a New York Daily News story.
The casino lobby vs. DFS
Pretlow dismissed the idea that the casino lobby would get its way in having DFS treated like other forms of regulated gambling in the state.
The New York Gaming Association made its feelings known this week, and it appears it will be opposed to the Pretlow bill. How the NYGA’s opposition will manifest itself in votes in the House or Senate is unknown, but it has emerged as a stumbling block in Illinois.
Also of note: Pretlow was pessimistic on the chances of passage of an online poker bill this session.
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