Louisiana — one of five states where most daily fantasy sports sites do not currently operate — is the latest jurisdiction seeking to legalize DFS contests, with a bill that was introduced in the state house on Friday.
Lawmaking in Louisiana
The legislation — House Bill No. 475 — is in the same vein as a bill introduced in Iowa earlier this year. The bill from Rep. Joseph Lopinto seeks to create a carveout in state law that differentiates playing fantasy sports from gambling.
Louisiana is actually one of the most liberal states in the union in terms of land-based gambling, but, like most jurisdictions, online gambling of any type is illegal.
The bill looks to alter Revised Statutes 14:90, the section of the code that deals with gambling. State code actually makes “gambling” in Louisiana illegal, but the code creates carveouts for licensed forms of wagering in the state, and places where licensed gaming may take place — including gaming activities that take place at land-based casinos, riverboat casinos, horse-racing facilities and pari-mutuel wagering facilities.
Language matters
The bill would add two new sections to the state code. First, to the section on “Gambling:”
D. Participation in any fantasy or simulation sports game, educational game, or contest as provided in R.S. 14:90.3(J) shall not be considered gambling for the purposes of this Section.
And then to the section dealing with “Gambling by computer“:
J. Participation in any fantasy or simulation sports game, educational game, or contest shall not be considered gambling by computer for the purposes of this Section, if all the following conditions are met:
The bill goes on to define fantasy sports — so that the law does not allow sports betting — with language similar to the carveout for fantasy in the federal law, the Unlawful Internet Gambling Enforcement Act.
All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest, and their value is not determined by the number of participants or the amount of any fees paid by those participants.
A Louisiana bill in 2010 that also sought to legalize DFS did not become a law.
The lay of the land in the states
It’s the latest example of states acting in instances where state law makes DFS illegal, or at least of questionable legality. DFS is generally not allowed in five states currently (Iowa, Louisiana, Montana, Washington and Arizona). Of those, only Arizona has not considered legislation this year; a bill failed there in 2014.
- Iowa. The bill there would simply legalize all types of fantasy sports, including DFS. The bill has passed the state Senate and is awaiting action in the House.
- Kansas. Although the state generally is not considered a “gray state” by DFS sites, there is reason to worry under state law for players and operators. This bill would legalize fantasy sports. It has passed out of committee and is awaiting floor debate and a vote in the legislature.
- Montana. A bill was introduced in December, but the latest action shows “Missed Deadline for General Bill Transmittal,” meaning it’s dead for now.
- Washington. A bill was introduced in January, but action has stalled. In addition to that, lawmakers had begun questioning whether or not DFS constitutes gambling, giving some pause about passing the bill as-is.
- Texas. A pair of companion bills were introduced last month to require licensing of “sports betting websites,” and DFS would fall under the proposed law’s purview. The bill has been referred to committee and is awaiting a hearing.
What’s next?
Clearly there is momentum for states to take some sort of stance with daily fantasy sports. But even though there have been a lot of bills, none of them have passed, yet. Iowa appears to be the closest to actually making a law that impacts DFS.
DFS has experienced huge growth in a short period of time. With that comes increased exposure and scrutiny, and it will be interesting to see how lawmakers continue to view and handle fantasy sports.
Will states follow along with the UIGEA carveout for fantasy sports — like in Iowa and Louisiana? Or will they start examining whether DFS resembles gambling more than a skill game — like in Texas and possibly Washington?
The added dimension for the legal landscape is the entrance of Amaya Gaming/PokerStars into the DFS industry later this year. DFS sites have been DFS-only, up to this point. The fact that a company that offers online poker and casino games wants to start providing DFS could be a red flag.
The battle to have DFS legalized in every state of the union will continue this year. The outcome of that battle is still far from determined.
Photo by Ken Lund used under license CC BY-SA 2.0.
