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In the past few months the collegiate sports organization has become one of the DFS industry’s main opponents, a trend that could manifest itself in the present and the future.
There has been a growing debate over DFS sites offering contests based on college sports, an effort largely spearheaded by the NCAA.
The industry would obviously like to continue offering college contests, but when trying to get regulation passed in a variety of states, it may have to pick its battles.
A regulatory effort in Indiana had been going smoothly in the early stages — an industry-friendly bill was introduced in both the House and Senate, with very low licensing fees and regulations that are not onerous.
A Senate committee hearing took place on Wednesday, and Sen. Jon Ford’s bill passed unanimously. The only caveat? The bill had been amended to exclude college contests from being offered by regulated sites.
From the Indianapolis Business Journal:
“We support Sen. Ford’s amendment,” said NCAA representative Mike McDaniel. “We think it is important for the integrity of the institutions.”
— Mark Alesia (@markalesia) January 27, 2016
More on the hearing from the Indy Star.
It’s the first DFS bill that has actually included such language, although Indianapolis also happens to be the home of the NCAA’s headquarters, giving it a different type of access to the legislative process.
The proposed DFS regulations from the Massachusetts attorney general, Maura Healey, also exclude college contests. It’s not clear if the NCAA had any role in that language, or if it was just a concept that Healey simply agreed with.
Back in August, the power conferences sent a letter to the top DFS operators, asking them to discontinue college DFS contests. Obviously, that did not result in DraftKings and FanDuel taking any action.
The New York Times later reported that the request came from the NCAA and all 10 top-level football conferences.
DFS sites have also been barred from advertising during the College Football Playoff and the men’s and women’s basketball tournaments.
The NCAA says publicly that it’s against gambling of any type. For example, the NCAA got Oregon to stop its Sports Action lottery in exchange for allowing the state to host NCAA tournament games in Portland.
Of course, betting on college football and office pools based on March Madness are two of the reasons why college sports are so popular.
Still, the NCAA has extended its anti-gambling view to daily fantasy sports. The NCAA bars collegiate athletes from playing fantasy sports for money.
Big 12 Conference Commissioner Bob Bowlsby said this last year to USA Today: “We’ve been wrestling with all the issues around DraftKings and FanDuel,” Bowlsby said, “which I don’t think anybody can suggest isn’t gambling.”
The NCAA is also a plaintiff in the ongoing New Jersey sports betting case, trying to prevent wagering from being authorized in the state. Which brings us to one other possible point of contention between the NCAA and DFS.
The NCAA seems to be content with DFS regulatory bills, as long as they exclude college contests, from the tenor of the NCAA’s involvement in Indiana.
If college contests aren’t barred in a state/DFS bill? All bets might be off.
That brings up a potential issue — a challenge to any DFS bills that are passed into law under the Professional And Amateur Sports Protection Act. That’s the law that bars nearly all states from legalizing sports wagering — and it’s at the heart of the aforementioned NJ sports betting case.
PASPA has never been applied to DFS in a court of law. But if states pass legislation that could be seen as authorizing daily fantasy sports, it has the potential to bring up a PASPA violation. Gaming attorney Daniel Wallach delved into that subject recently in a blog post.
The Massachusetts Gaming Commission, at least partially on the opinion of Wallach, agreed in its white paper on DFS:
Notably, the interests of the amateur sports organizations and the professional leagues are not always aligned as demonstrated by the NCAA’s request that DFS operators stop offering contests based on their college sports, thus leaving the NCAA as a potential wild card PASPA plaintiff.
PASPA concerns over DFS bills were also brought up in a piece of New York legislation.
Of course, the only bodies that can bring a PASPA challenge are professional and amateur sports organizations. The pro sports leagues, obviously, are on the side of the DFS operators and won’t sue.
The same could not be said of the NCAA, if they feel like picking a fight in states where a law is passed and DFS sites offer college contests. Whether they would have the appetite to do so is an unanswered question.