A New York state senator has introduced a bill that seeks to clarify that daily fantasy sports are games of skill, rather than a game of chance, under state law.
What we know about the NY bill
State Senator Michael Ranzenhofer introduced the bill — S06092 (tracking here). The language of the bill is not filed on the NY legislature’s website, but Legal Sports Report obtained a copy of the bill that can be viewed here.
A press release from the senator’s office indicated that the new legislation was triggered by recent actions by the New York attorney general’s office, which issued cease-and-desist orders to FanDuel and DraftKings last week. Both DraftKings and FanDuel filed temporary restraining orders against the AG taking action on Monday, as well. (The DraftKings TRO van be viewed here.)
From the presser:
“Time and time again, New York has stood in the way, whether by over-regulation or outright banning, of activities that are legal and enjoyed in most states across the country,” said Ranzenhofer. “This bill further protects the rights of businesses and individuals who wish to engage in this type of commerce in the state of New York.”
According to the release, the bill “adopts existing language used in Federal law regulating internet gaming with certain criteria to designate a game of skill.” The bill does not appear to be a regulatory bill in any shape or form, as written.
The bill cannot move terribly quickly, as the state legislature does not reconvene until Jan. 6, 2016.
A closer look at the new NY DFS bill
The bill appears to be much like ones that have been passed in Maryland and Kansas, which simply sought to legalize, and not regulate, DFS.
The bill seeks to amend Section 225 of New York penal code, which defines both “gambling” and “contests of chance.” It largely mimics the language in the federal Unlawful Internet Gambling Enforcement Act.
It would amend that code to say that the definition of a contest of chance “shall not include participation in any fantasy or simulation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organizations…”
Like the UIGEA, the bill states that:
- “Prizes and awards” must be known in advance and not determined by “any fees paid by those participants.”
- “All winning outcomes reflect the relative knowledge and skill of the participants…”
- Outcomes are not “based on the score, point-spread or any performance” of teams or on a single athlete.
Possible issues because of UIGEA language?
In some ways, the same issue that exists under state law in New York — i.e. how much skill vs. chance exists in DFS — may still be at play in the bill as constructed. When the bill says defines a “contest of chance,” it says the definition will not include fantasy contests when they meet “the following conditions.”
Among those conditions is the aforementioned “winning outcomes reflect the relative knowledge and skill” phrase. A reading of the UIGEA does not expressly says that fantasy sports are a skill game; or, more simply, UIGEA speaks to the matter of “if” DFS contests involve skill, not “because” they involve skill.
There are also a wide variety of products that say they fall under the umbrella of daily fantasy sports that arguably and likely take varying amounts of skill to play.
The bill could clearly be an improvement on the current law and “contest of chance” definition, though, in that DFS is not expressly mentioned currently.
Not the only DFS bill in New York
Another DFS bill was introduced in October — before the NY AG’s recent actions. That bill was a relatively simple piece of legislation as well, but it sought to add DFS to the state’s gambling code, not exempt it.
That bill, from Rep. Felix Ortiz, didn’t prescribe specific regulatory items but rather would put DFS under the oversight of the state’s gaming commission.