Georgia, Alabama and Oregon Loom Large For DFS This Week
Legal Sports Report

For DraftKings And FanDuel, Focus Is On States Where Daily Fantasy Sports Is Illegal, Or Might Be

Fantasy sports legal focus
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Last year, the daily fantasy sports industry was all about racking up wins anywhere it could on the legislative front. That approach from industry leaders DraftKings and FanDuel led to eight states legalizing and regulating paid-entry fantasy sports.

The carpet-bombing approach is still in effect, with fantasy sports legislation appearing in about half of the states in 2017 so far. But for the short term, the focus appears to be on states where:

  • DFS is illegal;
  • The legality of DFS is in question;
  • A bill exists that could make DFS illegal.

Of course, the states that check off any of those boxes is a long one. Here is a look at some of those states, and where things stand:

Georgia and DFS

State No. 1A right now for DFS is Georgia. Why?

First, DFS takes place in a gray area there. DraftKings, FanDuel and other operators generally serve the state despite a privately issued memo from the state’s attorney general saying DFS is likely illegal gambling in the state. That differs from AG opinions on DFS in other states, where formal opinions were issued publicly.

Second, the state has just two days on its legislative calendar: Tuesday and Thursday. The urgency was apparent last week. Lobbying for the fantasy sports industry got serious when former Atlanta Braves pitcher Tom Glavine was brought into push the bill.

One bill — H 118 — already made it through the House and is awaiting a vote in the Senate. Fantasy sports language was also tacked onto an existing bill that is also in the House, currently. More on that second bill here.

Georgia is the key state this week. But others loom.

Alabama and DFS

If time in Georgia weren’t so short, Alabama might be No. 1 in immediacy terms.

A bill — H 354 — is in front of the full House, with a vote possibly on the agenda next week.

The legality situation in Alabama is even worse than in Georgia, as pretty much all operators left the state after the AG asked DraftKings and FanDuel to leave.

More on the micro-political dynamic from AL.com:

Said Alabama House Speaker Mac McCutcheon, R-Monrovia, “I’ve heard from many folks across the state that would like for us to address this issue. Whether or not this type of activity is gambling is a debate I expect the Legislature will have.”

Once Georgia wraps up, look for Alabama to take center stage.

Oregon and DFS

Oregon is not a place where the DFS debate has been had at all, up until now. That’s set to change this week, as two bills are scheduled for a hearing in a House Business and Labor Committee on Wednesday.

Oregon might not move the needle for some, but there are several reasons why it should:

  • One of the two bills would label DFS a “contest of chance,” a designation the industry has fought tooth and nail to avoid.
  • Outside of the lottery, the state’s tribes conduct most of the gambling. The DFS industry has run up against pushback — sometimes resulting in scuttled bills — from tribes in a variety of states.
  • The state has a unique position in the sports betting landscape, as one of four states excluded from the federal sports betting ban — PASPA — at least partially. The state lottery once offered sports betting parlays via its Sports Action product, but it was discontinued as part of an agreement with the NCAA. Whether this dynamic surfaces in terms of the DFS debate will be interesting to watch.

Regardless, the DFS industry would like to head off any attempts to add another state to the list of gray or black markets.

Texas and Florida

The sheer size of both of these states makes them worthwhile targets for gaining legal clarity.

Texas daily fantasy sports features the higher stakes of the two:

  • FanDuel does not operate there but DraftKings does after a negative AG opinion. The two companies are planning to merge this year.
  • If Texas does not pass a law this year, the legislature doesn’t convene again until 2019.

Florida is just as big of a prize without the same proximate concerns on legality (although they do linger in the background). A hearing will be held this week on a standalone bill. DFS has gotten caught up in the middle of a larger discussion regarding gambling and the Seminole Tribe.

But Florida remains a focus for the industry in the short term.

Waiting in the wings on DFS

There are plenty of other states where DFS is a high priority for the industry. (The following is not meant to be an all-inclusive list.)

Iowa

Iowa is one of five states where DFS has always been considered illegal under existing state law. Turning any of these five states to the positive category — no matter its size — would be seen as a big win for the indsutry.

A bill to legalize DFS cleared a House committee and could be up for a vote as soon as this week.

Vermont

Vermont is another state with a negative AG opinion on the books. A bill in the Senate recently started making progress.

Ohio

Like Oregon, there hasn’t been a ton of DFS debate in Ohio. But an industry lobbyist said the state was likely to pass a bill this year.

Also like Oregon, legislation has surfaced that would make DFS illegal.

Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.
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