Pennsylvania is the latest state to get seriously involved in the potential legalization and regulation of the daily fantasy sports industry, with a new piece of legislation introduced on Thursday.
Things ramped up quickly on DFS in PA
Pennsylvania has largely stayed on the sidelines in the DFS debate over the first half of 2016, as a variety of states considered bills or passed them into law.
But momentum grew quickly in the wake of the Pennsylvania Gaming Control Board’s report on DFS.
That report was received by the House Gaming Oversight Committee this week, in which Rep. John Payne — the chair of that committee — indicated a DFS bill would see a vote next week.
Of course, the bill had not yet been introduced, but the legislation from Rep. George Dunbar was formally introduced today.
The same House gaming committee is also bullish on sports betting, as it passed a resolution asking for Congress to repeal PASPA.
A first look at the DFS bill
Dunbar originally started looking at DFS more than a year ago, with a bill designed to allow land-based casinos to offer DFS contests.
His new bill — H 2150 — seeks to oversee the entire DFS industry. Interestingly, the bill ignores the PGCB’s recommendation that “the play of fantasy sports in Pennsylvania be provided through the existing slot machine licensees as a gaming related amenity operated through the licensee’s web-site.”
The idea of tying DFS to current license holders has cropped up in Illinois and New York.
Here’s a look at the that the bill does, in broad terms:
Licensing and oversight
Here is how the state would handle DFS, under the bill:
- The PGCB is given fairly wide latitude in overseeing the industry, including promulgating regulations as it sees fit.
- The cost of a license is the lesser of $50,000 or 7.5 percent of net revenue generated by an operator from users in Pennsylvania.
- License renewal costs $5,000 annually.
- Operators are taxed an additional 5 percent of net revenue generated by an operator from users in PA.
- Operators that are licensed must undergo an annual third-party audit and must contract annually with a testing laboratory approved by the PGCB.
- Licensed gaming facilities in the state can apply for a license to offer DFS contests.
- A total of $1.75 million is approriated for regulation of DFS in Year 1.
Consumer protection
From Dunbar’s memo seeking co-sponsors and the bill itself, here are some of the consumer protections his bill would put in place:
- Prohibit the play of fantasy contests by minors (under 18 years of age);
- Require confidentiality of a player’s personal and financial information;
- Make operators segregate operational and player funds;
- Ensure employees do not participate in fantasy contests;
- Enforce a participant’s self-exclusion from fantasy contests;
- Require providers and their employees to be adequately trained to refer compulsive and problem fantasy contest participants to the appropriate treatment services.
Intersection with online gambling?
The arrival of DFS legislation comes at an interesting time for gaming in the commonwealth.
There is an ongoing effort to legalize online poker and gambling, as well, as part of a larger gambling expansion package.
It’s not clear whether the DFS bill will eventually be tied the rest of the gaming issues in the state, or if it will move forward independently. Either course of action seems tenable.
Pennsylvania is also attempting to agree on a budget for the next fiscal year, a process that was highly contentious and delayed for the better part of FY 2015-16.
