[toc]The New Jersey Assembly passed a bill that would legalize and regulate paid-entry fantasy sports — including DraftKings and FanDuel — in a vote on Monday.
The bill now heads to the state Senate.
DFS moves ahead in New Jersey
The bill that would oversee the daily fantasy sports industry — A 3532 — passed easily, by a margin of 56-15.
The bill, as currently written, is much like regulatory bills introduced and passed in a number of states. Some key points:
- Gives regulatory authority to the Division of Consumer Affairs in the Department of Law and Public Safety.
- Creates a tax on revenue of 10.5 percent of a fantasy sports operator’s gross revenue from inside the state.
- Sets up a number of consumer protections that operators must comply with.
Legislation surfaced in 2015 related to fantasy sports but never gained serious traction.
Intersection with NJ sports betting case
The advancement of the legislation comes at a crucial point in the ongoing New Jersey sports betting case in the federal court system. (Sports betting is illegal in much of the US because of a federal law, PASPA.)
In that case, the state has tried to legalize sports betting. But the major US professional sports leagues and the NCAA have blocked that effort via the courts.
A brief from the US Solicitor General — as requested by the Supreme Court — could come this month. SCOTUS would likely announce its intention to hear the appeal or not by this summer.
Back in 2015, the Assembly had been tepid on passing fantasy sports legislation:
Assemblymember Ronald Dancer said he did not want to do anything to “place the sports betting case in jeopardy,” an assessment that Chairman Ralph Caputo concurred with.
It appears that attitude may have changed, or the legislature is simply getting ready to act once the case is finally resolved.
New Jersey might be more aggressive with fantasy sports
Many states are taking a passive approach to DFS — regulating and then letting the current industry to its own devices. But New Jersey may be different in that regard.
A fantasy sports product is already in the works for Resorts Atlantic City, independent of the bill. Meanwhile, casinos and racetracks in the states that have explicitly legalized DFS have mostly stayed out of the vertical.
Using a fantasy sports law to offer something that is more like sports betting than DFS would present New Jersey with a new way to challenge the federal ban.
But, first things first. New Jersey’s Senate still has to approve the bill and send it to the desk of Gov. Chris Christie.
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