became the 16th state to formally legalize daily fantasy sports
, as Gov. Chris Christie
signed a bill into law.
New Jersey and DFS
New Jersey’s legislature had passed a bill that regulated and legalized paid-entry fantasy sports in the state in early July. Since then, however, it had sat idle on Christie’s desk.
Christie finally decided to enact the legislation — A 3532 — this week.
The law doesn’t change much at the top line, as almost all DFS providers already served the state. State gaming regulators had already said DFS was legal under existing state law. That led to the rise of a fantasy sports product called FastPick being rolled out by Resorts in Atlantic City this summer.
One of the primary sponsors of the bill, Sen. Jim Whelan, passed away this week.
DraftKings and FanDuel reaction
Marc La Vorgna, acting as a spokesperson for both DraftKings and FanDuel, offered this statement:
“Today, Governor Christie signed into law a bill establishing a comprehensive, lasting regulatory framework for fantasy sports in New Jersey. By taking this action, New Jersey is now the sixteenth state to enact a law protecting fantasy sports fans and guaranteeing their right to play the games they love, while establishing rules to protect consumers as the industry grows and ensure the continued integrity of fantasy sports contests.
“The law establishes multiple layers of oversight, placing New Jersey at the forefront of consumer protection nationally, and creating a new source of tax revenue with major potential for growth in the state. On behalf of nearly 1.5 million fantasy sports fans in New Jersey, we want to thank Governor Christie and the legislature – especially Senators Sarlo, Stack and Sweeney and Assemblymen Caputo, Mazzeo, Burzichelli and Brown – for coming together on this bipartisan legislation.
And we would like to give a special thanks to the bill’s champion, Senator Jim Whelan, who tragically passed away this week and was a true and tireless champion for the communities he served faithfully for decades.”
Whats in the NJ DFS bill?
The fantasy sports law is similar to ones that many other states have passed in the past two years:
- The law declares paid-entry fantasy sports legal in the state and a game of skill, and not under the umbrella of gaming statutes.
- Oversight of the industry is handled by the Division of Consumer Affairs in the Department of Law and Public Safety. NJ, of course, has regulation for casino gaming — the Department of Gaming Enforcement — but that department will not be involved.
- Operators must apply for a permit in the state. During the permitting process, any operator that was already serving the state may continue to do so.
- Operators are taxed at a rate of 10.5 percent of gross revenue generated within the state. A permit fee is also prescribed, but the amount is left up to regulators.
- For any DFS operator that wants to serve the state, “at least one server used to conduct fantasy sports activities shall be physically located” in Atlantic City.
- It sets a minimum age of 18 for players.
- The law institutes a number of consumer protections, such as banning play by employees of DFS operators, putting in place responsible gaming protocols, and forcing operators to segregate player funds from operational funds.
Interestingly, the bill does not ban fantasy sports based on college games. Most states with laws have banned such contests.
Legislative progress is nothing short of amazing for DFS
New Jersey is the sixth state this year and 16th overall to enact a fantasy sports law. The list (2017 states in bold):
- New Hampshire
- New York
Many of the legislative victories this year have been in small states — half in New England — but are victories nonetheless. DFS companies will be returning to action in Delaware on Friday after a new law passed there last month.
The fact that only two states had DFS laws prior to 2016 and 14 states have joined them is quite the legislative accomplishment at the state level. It’s almost entirely because of lobbying efforts from the top two companies in DFS, FanDuel and DraftKings. You could now drive from Maine to Colorado in states that have passed such laws.
As for some of the rest of the country:
- The status of DFS legislation in bigger states — like Pennsylvania and Illinois — remains in flux.
- Connecticut and Ohio remain real possibilities to pass DFS bills this year as well.
- The industry suffered legislative setbacks in important big states like Texas and Florida.