OLYMPIA — Washington state began its 2016 foray into dealing with the daily fantasy sports industry, considering a bill in a public hearing that would make operating a DFS site a felony.
The House Commerce & Gaming Committee talked about HB 2370 — authored by committee chair Rep. Chris Hurst — and took public testimony on the legislation on Monday.
The hearing was held with the backdrop that Washington is already one of six states where no DFS operator allows users. There are also other bills active in the legislature that would seek to classify DFS as a game of skill and expressly legal in Washington.
Years ago, Washington passed a law making online poker a felony in the state.
Prior to the hearing
The Fantasy Sports Trade Association released this statement before Monday’s hearing.
“The FSTA urges everyone in the state of Washington to contact their representatives to vote against Rep. Hurst’s ridiculous, unseemly bill that would make criminals out of the millions of law-abiding, decent folks who have enjoyed playing fantasy sports for decades and appreciate the skill and camaraderie involved in playing the games.”
Hurst had already made his feelings on the subject of DFS abundantly known — namely that he feels that DFS is a form of illegal gambling that should not be authorized or encouraged in any way in the state.
Hurst’s feelings and rhetoric came via the bill’s language and a media blitz that included:
- An interview at ESPN.
- A radio interview in which he said “This is no different than El Chapo down in Mexico advertising heroin or methamphetamine on our airways a thousand times a day to get kids to try it.”
- An op-ed he penned in the Tacoma News-Tribune.
Whether Hurst can pass his bill remains to be seen, but it could simply be a signal to other legislators that a bill that is more friendly to the DFS industry is not likely to get through his committee.
At Monday’s hearing
Given that backdrop, it might have been fair to expect more fireworks at Monday’s hearing.
But it lacked for that. Hurst was relatively measured in his comments in bringing the bill before the committee, although some of his prior rhetoric crept in. And it was just a public hearing, meaning the bill was not up for debate or a vote.
Still, there was little sense from the committee where they stood; only one committee member had any questions during the hearing. No one had questions for Hurst when he opened the committee up to questioning his bill.
Hurst’s comments on the DFS bill
Hurst presented his bill for the hearing, saying he believes the state has rejected expansions of gaming — and particularly online gaming.
“I don’t have a problem with fantasy sports, fantasy sports has been around a long time,” Hurst opened his comments with.
“I don’t have a problem with people putting money into pools, for that matter. I think that’s perfectly fine,” Hurst continued, before getting into the fantasy sports carveout in the UIGEA. “But it changes with something we have seen recently, and the folks that proposed the legislation that DraftKings and FanDuel now uses have said they never intended and never expected that loophole for fantasy sports, that created the disaster that we have today.”
He went on to say that he believes the bill is no more than a reiteration of current Washington law, as fantasy sports for real money and online gambling are already illegal in Washington state.
Hurst also trotted out some of the arguments that online gaming opponents have been using for years:
- He asserted that problem gamblers are more at risk online than in physical locations, an idea that has been used against online poker in Washington, as well.
- He said it’s difficult if not impossible to stop minors from playing, or knowing exactly who your customer is. (This is a problem mainly with unregulated gaming sites; regulated gaming in Nevada, New Jersey and Delaware has not had problems with these issues. FanDuel and DraftKings, at least, have recently increased their KYC protocols.)
Those arguments, of course, can be used to advocate for regulation of the DFS industry as well; Washington residents could easily access offshore online gambling and poker sites if they wanted to where those issues are very real concerns.
Witnesses at the DFS hearing
Hurst said he was surprised that fewer people had asked to testify, although the room was full of people watching the proceedings. Testimony was provided by:
- The Washington State Gambling Commission talked about the impact of the bill on its operations and enforcement and fiscal concerns. The chairman of the commission, Chris Stearns, indicated that his organization had investigated reports of Washington residents playing fantasy sports, but that that play had occurred while not in the state. There is still an open and ongoing investigation regarding fantasy sports, however,
- Rob McKenna, the former state attorney general, testified on behalf of the fantasy sports industry as a lobbyist for the Fantasy Sports Trade Association. When asked by a committee member if the industry was open to regulation, McKenna pointed to Massachusetts’ proposed regulations and said companies in the FSTA were amenable to some regulation.
- A lobbyist for the nontribal cardrooms in the state said they were officially neutral on the bill.
- A lobbyist for the Washington State Association of Broadcasters said they had concerns about wording in the legislation that makes it a felony to advertise fantasy sports games for money. Hurst indicated that he would work with the group to clean up the language so broadcasters would not be liable.
Tribal interests did not testify in front of the committee.
The other legislative efforts
There are three different DFS efforts active in the legislature, besides Hurst’s:
- SB 6333 and HB 1301 are bills that specifically seek to legalize DFS. A Senate hearing will be held on Wednesday.
- SB 5284 was introduced and considered in a hearing last year, but gained no traction. It is still alive for the current session. It seeks to
There are legislative efforts going on across the country, but no other bill currently seeks to outlaw DFS. Attorneys general in Illinois and New York have stated their opinions that DFS is illegal gambling under state law.