[toc]The daily fantasy sports industry got its best piece of news in a year, as Gov. Andrew Cuomo signed a bill that formally legalizes and regulates contests in New York.
The news was broken by Tom Precious of the Buffalo News.
The signing of the law should allow DraftKings, FanDuel and all other sites that had pulled out of the state to return to operation in New York in short order.
“It is a tremendous day for the industry and one that we hope to build on in the months ahead,” Orrick Public Policy Partner Jeremy Kudon, a lobbyist for DraftKings, FanDuel and the Fantasy Sports Trade Association told Legal Sports Report. “We’re not satisfied with passing 8 bills in 6 months. We won’t rest until we pass bills in all 50 states.”
New York becomes the seventh state to legalize and regulate the industry this year.
No more waiting for the governor
Gov. Andrew Cuomo officially requested that the fantasy sports bill that would regulate paid-entry fantasy sports in the state be sent to his desk on Tuesday. It only took him a day to decide what to do.
He had 10 days either to sign or veto the bill, or else it would become law automatically by his inaction, under legislative procedure in the state.
The signing came a month and a half after the legislature initially passed the fantasy sports bill back in June.
Reaction from NY government
“Daily fantasy sports have proven to be popular in New York, but until now have operated with no supervision and no protections for players,” Cuomo said in a press release. “This legislation strikes the right balance that allows this activity to continue with oversight from state regulators, new consumer protections, and more funding for education.”
The sponsors of the bill in the Senate and the Assembly also offered statements in the governor’s press release.
Senator John Bonacic:
“I am pleased that Governor Cuomo has signed the Daily Fantasy Sports legislation into law, allowing thousands of New Yorkers the opportunity to continue playing these games that they have been playing for over a decade. With strong consumer protections and economic benefits to the state, I believe this legislation can serve as a model for the rest of the country.”
Assemblyman Gary Pretlow:
“Fantasy sports are more than online games – they have the potential to generate millions of dollars in revenue for New York State. This bill will allow these companies to continue operating while ensuring fans have a safe environment to play in. I am proud Governor Cuomo has signed this legislation to keep fantasy sports in New York and I thank my partners in the legislature for their work in getting this legislation passed.”
Cuomo’s office estimated the law would result in $4 million in revenue for the state.
Backstory on the NY DFS bill
DraftKings, FanDuel and most other DFS sites had exited the state after the “big two” DFS sites signed a settlement with NY Attorney General Eric Schneiderman in March.
It brings to an end a legal saga dating back to last October, when Schneiderman started looking into the DFS industry. He issued cease-and-desist letters to DraftKings and FanDuel in November, saying that he believed they were illegal gambling operations under state law.
Schneiderman offered this statement after the governor signed the bill:
“As I’ve said from the start of my office’s investigation into daily fantasy sports, my job is to enforce the law and protect New Yorkers from illegal or unscrupulous conduct. Today, the Governor has signed a bill that amends the law in order to legalize daily fantasy sports contests, with consumer protections for New York players. I will enforce and defend the new law. Our false advertising and consumer fraud claims for past misconduct by Draft Kings and Fan Duel will continue to move forward.”
When will DFS be up and running in NY?
Sites wishing to be licensed in the state must register with the state. As part of that process, operators that had been in New York prior to November of last year will receive temporary permits to run contests.
Tt appears that DFS sites could resume operations almost immediately upon receiving a permit from the state from the New York State Gaming Commission. Those permits are likely to be issued this month:
The NYSGS quickly put up a web page that deals with DFS in the state:
Any entity operating in New York State before November 10, 2015 may resume operation in the state upon issuance of a TEMPORARY PERMIT from the Commission. The Commission must approve this temporary permit application before any operator may begin/resume operations in NYS.
The application for a temporary permit can be seen here. An application for a full permit is not yet available.
Fantasy industry statements
FanDuel CEO Nigel Eccles:
“On behalf of more than three million fantasy players across the state and our entire company, we want to sincerely thank Governor Cuomo and members of the state legislature — led by bill sponsors Senator John Bonacic, Assemblyman Gary Pretlow, Senate Majority Leader John Flanagan and Speaker Carl Heastie — for bringing fantasy sports back to New York.
DraftKings CEO Jason Robins:
“We are thrilled Governor Cuomo has signed the fantasy sports bill and we thank him for his support of this important legislation. We are excited to have our DraftKings contests return to New York and bring the fun and excitement of DFS back to our fans. We would like to thank our hundreds of thousands of New York supporters for their passion and loyalty over the past several months. Your hard work and efforts have made an incredible difference.
“We extend our sincere thanks to the members of the legislature who worked to make this happen, especially Senator John Bonacic and Assemblyman Gary Pretlow, who provided tireless leadership on this legislation. We also greatly appreciate the thoughtful leadership of Senate Majority Leader John Flanagan, Speaker Carl Heastie, and Governor Andrew Cuomo. It is because of their hard work and collaboration that fantasy sports are returning to New York this football season.
“On behalf of everyone at DraftKings, we look forward to welcoming New Yorkers back and are excited that fans in some of the greatest sports towns in the world will once again be playing the fantasy sports contests they love.”
Michael La Guardia, Head of Product for Yahoo Sports and Finance:
“We commend the state legislature and Governor Cuomo for enacting legislation that will bring daily fantasy sports back to New York fans. In addition to clarifying the legal status of daily offerings, the new law supports a competitive marketplace, innovation and a more level playing field among users.”
From the Fantasy Sports Trade Association:
Today Governor Andrew Cuomo signed into law a bill that ensures a strong future for the fantasy sports industry in New York and serves as a beacon to the rest of the nation. It clarifies fantasy sports are legal games of skill, thus ensuring millions of New Yorkers can continue to play the games they love.
Behind the leadership of Sen. John Bonacic, Assemblyman J. Gary Pretlow and, now, Governor Cuomo, New York passed a law with important consumer protections and took into consideration the needs of many different types of businesses in our industry. TheFSTA will continue working hard to convince other states to pass similar, common-sense legislation that protects consumers and supports all of our member businesses.
Other states with fantasy sports laws
New York joins a growing list of states that have passed bills dealing with DFS this year.
Massachusetts also passed a bill legalizing paid-entry fantasy sports for companies that abide by the attorney general’s regulations in the state. That bill still needs the signature of Gov. Charlie Baker.
The importance of NY to DFS
The law takes effect just in time for NFL season, which begins in a little more than a month.
Entering the NFL season without access to revenue from NY DFS players could have been potentially devastating to operators. Now, they have access to a revenue stream whose existence was in doubt as recently as June — or even until Cuomo formally signed the bill today.