Daily Fantasy Sports Regulation, Taxation Grabs Attention Of National Conference Of State Legislatures

Written By Dustin Gouker on November 30, 2015
daily fantasy sports legislative attention

[toc]The daily fantasy sports industry has grabbed the attention of the National Conference of State Legislatures, raising the possibility of a more widespread and uniform approach to DFS.

The attention is coming in several different ways:

What exactly all of that might mean for the DFS industry in the long term is up for interpretation, but it’s clear that DFS is becoming an issue that more states will at least take a closer look at.

NCSL task force looking at taxation

The Executive Committee Task Force on State and Local Taxation touched on the topic of DFS in a meeting last week, as reported by MultiState Insider.

In the meeting held Nov. 20-21 in Miami, the task force “raised for the first time the tax treatment of fantasy sports,” according to the Insider:

The issue arose this morning in a roundtable session with legislators from approximately 20 states, where they shared tax policy issues they expect to be big in their states in 2016. The legislative and regulatory environment surrounding fantasy sports in several states was discussed and legislators cited recent activity that could serve as potential legislative models.

The story also indicated the subject of DFS will be addressed again in a meeting in January.

DFS on the Capitol Forum agenda

Daily fantasy sports will also be the subject of its own session at next week’s NCSL Capitol Forum, which helps to set the “States’ Agenda” for the organization. Here is how the session is described in the event’s agenda:

Out of Bounds? A Legal Analysis of Pay-to-Play Fantasy Sports: People have been playing traditional fantasy sports for decades, but daily fantasy sport sites have become big business in the U.S. Recently, DraftKings and FanDuel have been accused of “insider trading” and both companies have been named in a new class action lawsuit alleging negligence, fraud and false advertising. Learn more about fantasy sports’ legal standing, the validity of these accusations, and what states can do to regulate this new industry.

Speakers include:

  • Minnesota state Representative Joe Atkins, who has said he intends to introduce regulatory legislation.
  • Nevada Assemblymember Maggie Carlton, whose state earlier this year classified DFS as gambling and required operators to become licensed.
  • Fantasy Sports Trade Association lobbyist Jeremy Kudon, of Orrick, Herrington & Sutcliffe.

The moderator of the session is Utah State Senator Curtis Bramble, a state where nearly all DFS sites currently operate; Bramble has no known position on DFS.

What’s all that mean for DFS?

The possible bottom line is twofold:

  • Not every state has seen legislators take on the issue of DFS; legislation dealing with the industry has cropped up in about a third of states this year, and only a handful in the past few months. The issue being discussed at an overarching level among state legislators could turn into more bills, and more action at the state level.
  • A body like the NCSL considering the topic of DFS could result in a more uniform approach to the DFS industry. Currently, there are several types of bills and potential approaches to DFS operators, from treating them like online gambling sites to instituting basic consumer protections.

The fact that the NCSL is looking into the DFS industry is not a guarantee that DFS will be impacted directly, but it may start shaping how legislators consider and deal with the industry moving forward.

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Dustin Gouker

Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.

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