New York joined the growing number of states taking a closer look at the daily fantasy sports, with a new piece of legislation that seeks to regulate the industry.
What’s happening in New York with DFS
A bill was introduced into the New York State Assembly on Oct. 30, sponsored by Rep. Felix Ortiz. The bill (AO8554; tracking and bill text here), as written, is a short, simple piece of legislation.
All the bill does is add the phrase “fantasy sports gaming” to the state gambling code, and then defines “fantasy sports.” The bill’s purpose, as outlined in a memo before it was introduced, is to give the state’s gaming commission jurisdiction over DFS.
The bill’s apparent intent is to allow the gaming commission the authority to regulate the industry as it sees fit. More from that memo:
In light of this exemption and the recent questions raised about the transparency, fairness and security of the fantasy sports companies’ data about their rosters, it is appropriate to put added consumer protections in place by giving the state’s gaming commission regulatory authority over this type of gaming. The gaming commission has authority over any form of legal gaming in the state, including pari-mutuel wagering, both on-track and off-track (betting), bingo and charitable games of chance and the state lottery for education. Adding fantasy sports to that list is both reasonable and justified given existing authority over similar types of gambling and it would help prevent unfair practices in this booming multimillion dollar industry.
The memo also references the finding of Nevada’s gaming commission that DFS is gambling, under state law, and operators require a license to offer contests in state.
The bill has been referred to the racing and wagering committee.
No college sports in DFS bill?
Interestingly, the definition of “fantasy sports” in the bill mentions only “professional sports,” which means that there would be no DFS based on amateur events, like college football and basketball contests.
That might be a provision aimed at keeping the NCAA from challenging the legality of DFS under the Professional and Amateur Sports Protection Act. The NCAA is one of the original plaintiffs in blocking New Jersey from instituting a sports betting law.
Some legal experts believe PASPA could also be used to block DFS regulation at the state level. While the major pro sports leagues — the NFL, NBA, NHL and MLB — have no desire to hinder the DFS industry, the NCAA likely would, based on recent actions.
Also in New York
Gambling Compliance noted that the state gaming commission is preparing a report on DFS ahead of a meeting to be held on Nov. 23 (story here; paywall). State Sen. Bonacic, who has introduced online poker legislation in the state, is also interested in DFS regulation, GC reported.
“They make a lot of representations. They have very aggressive advertising campaigns,” he said. “We’re looking at the representations that were made to the customers. We want to see if all these deals that they’re promising — the odds they’re claiming and the special bonuses and discounts and things like that — are true.”
There was no word of the responses that FanDuel and DraftKings has been asked to provide to a series of questions that were due to the AG’s office in the middle of last month.
Joining other states looking into DFS
Other states that have introduced legislation include:
- Pennsylvania, which plans to hold a hearing regarding daily fantasy sports next week.
- Illinois, which introduced an industry-friendly bill last week.
- California, which introduced a bill in September.
Pennsylvania is the only state that seems determined to act quickly on legislation, out of that trio.
Massachusetts has not yet introduced a bill, that seems to be almost a certainty in the wake of a gaming commission hearing last week.