Indiana became the second state to put a law regulating fantasy sports on the books when Gov. Mike Pence signed legislation today.
The state joins Virginia, which passed a law overseeing the paid-entry fantasy sports earlier this month.
The news was first reported by the Indy Star. The bill shows as being signed on the governor’s website.
Pence signs the DFS bill
Pence waited until the deadline on the bill — S 339 — before signing it. The daily fantasy sports bill landed on his desk on March 17, and he took the full seven days allotted to him before signing it.
Had he not signed it, the bill also would have become law simply by his inaction. His only other option would have been to veto the bill, which was not a likely scenario given the overwhelming majorities by which it passed both chambers of the legislature.
Unlike some other states, Indiana’s governor does not have the power to line-item veto legislation.
The bill was sent to Pence’s desk earlier this month after passing a vote in the House.
The Indiana DFS law, at a glance
A few of the key points from the Indiana legislation:
- The bill has a $50,000 licensing fee for operators, with a $5,000 renewal. That fee could be increased to $75,000 in the future.
- Oversight of the industry is handled by the state gaming commission.
- Fantasy sports are designated as a game of skill.
- Operators may not offer contests based on amateur contests — that includes college football and basketball.
- The law sets a minimum age of 18 years to play and requires operators to verify players’ ages.
- The law creates consumer protections such as preventing employees of DFS operators and their close relatives from playing in contests; requiring sites to allow players to restrict themselves from playing; requiring sites to segregate players’ funds from operational funds.
- The law says that sites must undergo an annual third-party audit.
What’s next for DFS in Indiana
The law officially takes effect on July 1.
The law calls for the establishment of the “Paid Fantasy Sports Division” of the Indiana Gaming Commission, which does not yet exist. In addition to being formed, the division must also promulgate rules for administering the law.
All of this will take some time, so it would appear it will be months until the first applications are filed by operators in Indiana, and even longer until the first registrations are approved.
For now, it’s business as usual for fantasy sports companies in Indiana. According to the law, the state will “allow game operators who are operating in Indiana on March 31, 2016, to continue operating until they have received or have been denied a license.”
Who will register in Indiana?
A similar reaction from operators is expected in Indiana as was witnessed in Virginia. DraftKings (see statement below) and FanDuel will certainly register in the state.
Beyond that, it’s a waiting and a guessing game to see who will or won’t apply for licenses in either state. Some smaller operators earlier indicated they would not be registering in Virginia because of the $50,000 licensing fee.
The Fantasy Sports Trade Association earlier indicated that it was “deeply concerned” about Virginia’s registration fee, which is basically the same as the fee included in the law enacted in Indiana.
Yahoo, given its size and No. 3 position in the DFS market, is a possibility for a license. What other operators might apply is unknown, currently.
The law, in its synopsis, refers to “daily fantasy sports.” But as written, it appears to apply to any contest in which an entry fee is paid to a third party.
Reaction to the DFS law
Griffin Finan, Director of Public Affairs for DraftKings, issued this statement:
“Today, Indiana became yet another state to put in place a thoughtful and appropriate regulatory framework to protect the rights of fantasy players. We thank Governor Pence for his leadership and advocacy and are hopeful that other states across the country will follow Indiana’s lead.”
Statement from FanDuel:
“With Governor Pence signing fantasy sports legislation into law, Indiana has taken a sensible approach by clarifying the legal status of fantasy sports in the state and establishing some tough, but smart consumer protections to ensure games are fair and players know it. We want to thank Governor Pence and the members of the legislature, particularly bill sponsors Representative Morrison and Senator Ford, who listened to the legions of their constituents who love playing fantasy sports. Indiana is the second state to pass positive fantasy sports legislation this year, following Virginia, and more than 20 states are advancing similar legislation. We look forward to working with lawmakers in other states to continue the trend and ensure 50 million fantasy players can continue to play games they know and love.”
The FSTA released this statement:
“Today’s news out of Indiana marks another important step in the ongoing process of creating legal clarity for fantasy sports. Momentum continues to build across the country — with more and more states enacting legislation that will allow millions of fans to continue to enjoy all the fantasy sports games they love. Throughout this process, the FSTA will continue to advocate for registration fees that neither inhibit new business nor hurt smaller fantasy sports operators. The FSTA will continue to work toward these goals when Indiana examines its regulatory rules in a legislative study this summer.”