California, New York, Illinois Loom As Wild-Card States For DFS
Legal Sports Report

How Many More States Could Legalize And Regulate Daily Fantasy Sports This Year?

states that might pass DFS bills
The daily fantasy sports industry has had a pretty good year legislatively.

Over the course of late 2015 and early 2016, the industry has seen legislation dealing with DFS introduced in more than 30 states. Much of that can be attributed to a robust and successful lobbying effort led by DraftKings, FanDuel and the Fantasy Sports Trade Association.

Two states have already passed laws regarding DFS —Indiana and Virginia. Two more — Mississippi and Tennessee — seem all but assured of doing the same.

How many more states can realistically join them?

The top-level look at the states and DFS

The current legislative map shows that are in fact active bills in a lot of states. (Green shows states that have passed bills legalizing DFS; gray indicates active legislation; red indicates legislation is dead or a legislature adjourned without passing an introduced bill):

However, some of those bills have seen little or no action aside from being introduced or are unlikely to be passed given upcoming deadlines. We can also assume that if a bill hasn’t been introduced yet in a state, there’s little likelihood that legislation will surface or be passed in 2016.

The pool of states that realistically have a chance of passing legislation before their respective statehouses adjourn is much smaller than the gray states in the map above.

The states with the best chance of passing DFS bills

Based on legislative momentum and time left on legislative calendars, here are the states where bills have the best prospects:

  • Minnesota: Legislation has already passed the House, and the governor has said he is amenable to the bill making its way through the legislature. The legislature is in session for about another month.
  • Missouri: There has been nearly constant action and chatter surrounding several DFS bills in the legislature, including one that has already passed the House. The timeframe to get the bill passed is getting short, however, as the legislature adjourns next month.
  • Colorado: Legislation has been moving at lightning speed of late, at least in terms of state legislative action. A bill has already been moved to the House. Colorado has even less time to get a bill passed than Missouri, with a looming May 11 adjournment deadline.

DFS bills could hit a snag in any of these states. But if you had to handicap their chances of heading to a governor’s desk, all three would have to be favorites over inaction.

The wild-cards for DFS bills

There have been good signs in some of these states, but also reasons to doubt the ability of the legislature to get something done this year:

  • New York: While Rep. Gary Pretlow has expressed optimism for a DFS legislative effort, we’re also still waiting for him to introduce a bill that he said would come by the end of April. (No action has been taken on Sen. John Bonacic’s bill.) There is lots of reason to believe New York can pass a bill before adjourning in June. But until any legislation actually passes any type of vote, it’s difficult to say a DFS bill is a favorite to pass.
  • New Jersey: A bill in NJ — which is not supported by much of the industry — has already passed a committee vote. But given the timing of the state’s sports betting case  and some lawmakers’ reluctance to tackle DFS while that case is still active — a DFS bill passing is not a certainty.
  • Pennsylvania: Pennsylvania doesn’t truly have an active bill in play, but the results of a report on daily fantasy sports are due in May. Pennsylvania appears to want to take action, but it’s not clear if that will happen this year.
  • California: When the state Assembly passed a bill with just one vote against it in January, some assumed the legislation would have smooth sailing on its way to becoming law. Three months later, though, the Senate has yet to consider DFS, and there’s been little chatter about DFS of late. The legislature is in session through the summer.
  • Illinois: A renewed effort on the DFS bill has passed a committee vote, but until the legislation gets past an entire chamber, it’s difficult to predict its chances of success. The legislature is scheduled to adjourn May 31.

Some of these states could definitely pass legislation this year, but there’s also a real chance that none of them do.

Conclusion: The range of DFS law possibilities

With two laws on the books, and two more a near-certainty, how many states will have legal, regulated DFS by the end of 2016? (The analysis below excludes Kansas, which passed legislation in 2015.)

  • Pessimistic outlook: 5 states. In this scenario, things go haywire in Minnesota, Missouri or Colorado, and all of the other “wild-card” states fail to take action.
  • Moderate outlook: 8-9 states. All or some out of Minnesota, Missouri or Colorado pass bills, and one or two of the wild-card states (New York, California, Illinois) also put laws on the books.
  • Optimistic outlook: 10-12 states. Nearly every state actively considering legislation right now passes a bill, including a possible wild-card not mentioned above (i.e. Vermont, South Carolina).

The bottom line? If you had said DFS would get legal clarity in five or more states six months ago, that would seem like a huge victory for the industry. And in reality, it is.

But with three of the most important DFS states in limbo — NY, California and Illinois — it’s difficult to claim a real win until one or all of those state legislatures deal with DFS. Failure to get a bill passed in New York is a possible disastrous scenario.

There’s also the question of whether DFS laws as constructed are really a victory for the whole industry, as legislation in some states furthers a DraftKings-FanDuel duopoly.

In any event, the states that have — and will — pass legislation are starting the DFS industry on the path to getting the legal clarity it desires.

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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.