A bill legalizing and regulating daily fantasy sports made it past its first committee hearing in New York, but it was also clear the legislation does not have across-the-board support.
Today and tomorrow for the NY DFS bill
On Wednesday, Sen. John Bonacic called his DFS bill that he introduced in February — S6793A — during a meeting of the Senate Racing, Gaming and Wagering Committee that he chairs.
The committee voted the bill onto its next stop — the Senate Finance Committee. That body met on Thursday, but DFS was not heard alongside a bill to legalize and regulate online poker in the state. An industry source says it is scheduled to be heard in committee next week.
Also tomorrow? A vote will occur in the Assembly’s gaming committee on the bill just introduced by Assemblymember Gary Pretlow.
The majority of the Senate committee voted “aye with reservations,” meaning those senators did not entirely agree with the bill as it came before the committee. (Two voted for the bill, four voted for the bill with reservations, and there was one “no” vote.)
The tentative support appears to be mostly related to the racinos and the New York Gaming Association, which ramped up opposition to the bill recently.
Time is of the essence in New York
The legislature is trying to legalize the DFS industry in advance of its adjournment on June 16.
New York’s legislative effort represents a high-stakes opportunity for the DFS industry.
DraftKings and FanDuel stopped operating in New York this spring as a part of a settlement with Attorney General Eric Schneiderman. The two industry leaders agreed to that settlement in the hopes of getting legislation passed.
FanDuel CEO Nigel Eccles offered the following statement after the day’s action:
“We’ve been working around the clock with lawmakers in our home state of New York to introduce a bill that will ensure fantasy sports are permitted in the state and provide consumer protections for players. FanDuel has been headquartered in New York for five years, employs more than 170 people here and is committed to bringing fantasy sports back to New Yorkers, who have made their voices heard over these last few months.
“Although there is still work to be done, a bill introduced in both chambers and now passing a key Senate committee is a major step towards our goal. On behalf of the legions of New Yorkers who love fantasy sports and the many sports tech companies who are proud to call New York home, we thank the bill sponsors for their leadership and hope the legislature will act to ensure fantasy sports are here to stay in New York.”
And DraftKings CEO Jason Robins:
“Today, a bill that would protect the rights of New Yorkers to play fantasy sports cleared an important Senate committee, bringing New Yorkers one step closer to being able to enjoy the games that they love. DraftKings and the millions of New Yorkers who enjoy playing fantasy sports with their friends, families and co-workers would like to thank the bill sponsors for their support of innovation, entrepreneurship, and the camaraderie of fantasy sports.”
What happened in the committee meeting
The meeting was the first look into what members of the legislature were thinking on DFS outside of Pretlow and Bonacic, since a hearing held in December.
It also gave us insight into Bonacic’s thinking behind the bill.
Bonacic touts his own bill
Bonacic was clearly still very bullish on getting the bill through the legislature, from his comments on Wednesday.
“First of all we believe that there is illegal activities going on now, and consumers are not protected,” Bonacic said during the meeting. “Under this particular legislation, there will be more strict monitoring, and there will be more consumer protection. And there will be money to pay for the monitoring and the consumer protection.”
The casino opposition
The NYGA opposition was apparent during the short meeting. Sen. George Latimer noted that Empire City Casino and Yonkers Raceway from his district had concerns about the bill and how DFS is handled.
Bonacic was dismissive of the casino industry’s recent interest in the DFS industry. Bonacic also noted that “they are putting pressure on every elected official that has a racino in the state of New York.”
“Fantasy sports has been in the state of New York for 10 years,” Bonacic said. “None of the racinos have ever made a peep about concerns with fantasy sports. There’s a full-court press by all the racinos to try to tie fantasy sports into brick-and-mortar, like we want to do with online poker, but it doesn’t really work.
“And I might as well get it out now. First of all the legislation that we’re doing says this is not illegal gambling,” Bonacic continued. “And we’re concerned with a U.S. attorney general, we’re concerned with the Wire Act, and if we’re going to put a daily (fantasy) sports operation in a racino, which is a gambling operation, it could be a violation of betting on sports activity and it would create serious problems.”
He had one major jab at the casino lobby:
“It’s just a power play by racinos being greedy, to get a piece of the action, but it doesn’t work,” Bonacic said.
Concurrence with the Assembly
One hurdle that needs to be cleared is the fact that the Senate and Assembly versions of the DFS bill are currently different.
“I don’t have a ‘same-as’ bill yet with the Assembly,” Bonacic said. “Basically the difference amounts to the fees, but we’re not far apart, I think it’s something that could be resolved quickly.”
The two pieces of legislation have different amounts of money required for licensure in the state.
No Schneiderman concerns?
Bonacic revealed that Schneiderman — the biggest opponent to DFS in the state as it exists currently — had reviewed the bill.
“I bounced the legislation off the attorney general, and he made one comment, a helpful suggestion, which we’re going to put in with an amendment,” Bonacic said. “Basically we said that this activity would not be considered illegal gambling and would not violate the constitution.
“So I think the AG would be satisfied with this legislation,” Bonacic added.
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