While most of the country was getting ready to celebrate the Fourth of July, the daily fantasy sports industry was notching victories in several statehouses.
The legislatures in New Jersey and Delaware recently approved fantasy sports bills. Those states join New Hampshire as jurisdictions waiting for governors to sign the bills into law. Maine is very close to joining those states, as well.
Vermont became the 12th state to enact a fantasy sports law last month.
Bills in Pennsylvania and Illinois remain in flux but are in play.
New Jersey and DFS
Of the states to pass a DFS bill, New Jersey is the most interesting.
Both houses of the legislature have passed a bill (A 3532) legalizing and regulating fantasy sports in the state. The legislation passed the House in May; the Senate approved it last week, by a vote of 29-6.
All it needs to become law is the signature of Gov. Chris Christie. Handicapping what the mercurial and unpopular NJ governor might do is often a fool’s errand. But given the wide margins it passed both houses, it would seemingly be a bad idea for him to veto it.
Of course, the subject of daily fantasy sports famously came up at a 2015 presidential debate. Here’s what Christie said at the time about the possibility of regulating the industry:
Are we really talking about getting federal government involved in fantasy football? Wait a second – we have 19 trillion dollars in debt, we have people out of work, we have ISIS and Al Qaeda attacking us and we’re talking about fantasy football? Can this just stop? Seriously?
Also part of the backstory in the state:
- NJ gaming regulators had already said they believed DFS was already permitted under state law.
- The state is having its case to legalize sports betting heard by the US Supreme Court. Lawmakers had previously been tentative to advance a DFS bill while the NJ sports betting case was still active.
- At least one casino in Atlantic City — Resorts — is in the middle of rolling out a product that blurs the lines between daily fantasy and sports betting.
What’s in the NJ bill
The bill sets up basic consumer protections like laws that many other states have enacted. Also of note:
- The industry is put under the purview of the Division of Consumer Affairs in the Department of Law and Public Safety. The NJ Division of Gaming Enforcement is not in charge.
- Licensed companies pay a tax equal to 10.5 percent of gross revenue generated in the state. (The tax in the law is called an “operations fee.”)
- Fines for violation the bill’s provisions can reach up to $200,000.
- Operators must have at least one server located in Atlantic City.
Delaware and DFS
Delaware may be a small state, but a new law would nonetheless be the biggest victory out of these three examples.
DraftKings, FanDuel and other operators pulled out of the state after the attorney general sent cease and desist letters to their companies, as well as Yahoo. The new law would be the latest example of the DFS industry turning around a negative legal climate.
The final version of H 249 passed both the House (36-4) and Senate (13-7) on June 30. It still needs the signature of Gov. John Carney.
In the bill:
- The governor would choose which department regulation of the industry falls under.
- Whichever department oversees the industry appears to have wide authority to promulgate regulations.
- Operators shall “pay a fee equivalent to 15.5 percent or equivalent to highest rate adopted by another state, whichever is greater, of their interactive fantasy sports gross revenue generated within the state.”
- Establishes a number of consumer protections.
Maine and DFS
Maine’s bill isn’t quite to the governor yet, but all indications are the legislature will approve the bill, L 1320. It already passed the House and is waiting on concurrence in the Senate.
Even if that happens, however, a story out of the state cast some doubt on whether it will become law:
While the bill was passed with wide margins, it still may face difficulties. Gov. Paul LePage has not said what he thinks of the proposal, but has opposed gambling expansion through new casinos. If he chooses to veto the bill, supporters will need to pick up more support in the House in order to override it.
In the bill:
- The Department of Public Safety oversees the industry.
- Operators must pay a fee of $2,500 and pay 10 percent of their revenue in the state, if they have more than $100,000 in gross revenue in Maine.
- Establishes a number of consumer protections.
