While the aim of the daily fantasy sports industry is to gain legal clarity everywhere it can, some bills are more important others.
The new legislative effort in Georgia falls into the “more important” category because of the backstory in the state.
Why Georgia is important for DFS
One of the priorities of the DFS industry is to roll back states with a legal environment that is less than friendly. The industry succeeded in New York, Mississippi and Tennessee. In those three states, government enacted industry-friendly laws after state attorneys general issued negative opinions about DFS vis a vis state gambling law.
One of the states where a negative climate was not rolled back was Georgia. The AG there, Wright Banks Jr., did not issue a formal opinion. But in responding to an inquiry from the Georgia Lottery, he did say that his office believed DFS contests are not authorized in the state.
That letter was a private document that became public. No government entity in Georgia has made a public statement on DFS legality, nor has the state taken any action directed at the companies. (The state lottery did ask DraftKings and FanDuel how they believed their products are legal in Georgia, however.) Almost all operators accept real-money entries in the state.
Almost immediately after the AG letter came out, a DFS bill died in the legislature. And that brings us to today.
The Georgia DFS bill
Five representatives in the state House introduced H 118 on Tuesday. The bill seeks to “provide for the licensing, registration, regulation, and taxation of fantasy contest operators.”
It is in the mold of many bills that state lawmakers have enacted and introduced over the past year and a half. It seeks to institute consumer protections while creating a relatively low barrier to entry for paid-entry fantasy sports operators.
Among the provisions:
- The Department of the Secretary of State handles oversight.
- Sites must register with the state.
- A sliding scale of registration fees — from $50,000 down to $10,000 — would apply to fantasy contest operators.
- The state taxes gross revenues at a rate of six percent.
- The bill includes consumer protection measures — such as preventing employee play, play by minors and segregation of a site’s operational fund and player funds.
A spokesperson for DraftKings and FanDuel offered the following statement on the legislation:
“The bill takes the right approach by installing the consumer protections that have now been proven to work in many other states, while tailoring the correct specific touches for the state of Georgia. It updates older state laws to reflect changes in technology and the evolution of fantasy sports, and provides a path for the industry to generate revenue for the state as the fantasy sports industry continues to grow.”
Momentum building early in 2017 for DFS legislation
The DFS industry lobby has been busy to start the year, will bills popping up around the country again, much like in 2016.
Some of those are states that did not really consider DFS last year, such as Oregon and New Hampshire. Others, like Florida and Nebraska, are taking a second crack at legislation this year.
The bill in Georgia might be fast-tracked; it is scheduled for a committee hearing on Wednesday, just a day after being introduced. Getting a new law on the books in Georgia would be a good way to start 2017 for DFS proponents.