Congress To Consider If There Is A ‘Federal Role To Play’ Regarding Daily Fantasy Sports

Written By

Updated on

Congress Daily Fantasy Sports

The House Subcommittee on Commerce, Manufacturing, and Trade officially announced a hearing that will look into daily fantasy sports next week.

Legal Sports Report originally confirmed the hearing last month, but its official agenda, time and location had not been divulged at that time.

The details of the DFS hearing

The subcommittee, chaired by Rep. Michael C. Burgess, M.D. (R-Texas) issued a press release about the hearing this week, with the following details:

More from the release:

Daily fantasy sports games have courted the national spotlight over the past year with major advertising campaigns bringing in nearly 60 million online users. The subcommittee will examine the inner working of this emerging industry, already estimated to be worth more than $25 billion, the fairness and integrity of the games, and what consumer protections are in place.

As multiple states look into daily fantasy sports, the subcommittee hopes to understand the current direction of the industry and consider whether there is a federal role to play. A patchwork of differing and contradictory policies by the states could have negative consequences for consumers, as well as further growth and innovation. 

“The issue of daily fantasy sports leagues has been at the forefront of the news over the last few years. The committee is providing a forum for all stakeholders to discuss the many aspects of this complicated issue,” said Burges.

Who will testify?

The witness list is still a mystery less than a week out, but the press release indicated that a witnesses and testimony would be available eventually.

Who will the subbcommittee call on as witnesses? Some educated guesses and suggestions were offered at LSR soon after the hearing became public knowledge.

It still seems very likely that DraftKings CEO Jason Robins and FanDuel CEO Nigel Eccles will be asked to testify in front of the subcommittee, as they represent the two largest DFS sites.

It also seems likely that representatives of the various professional leagues that own equity stakes in or have signed team sponsorships with DraftKings and FanDuel will be called upon. That could include commissioners of the leagues, such as the NBA’s Adam Silver and the NFL’s Roger Goodell.

How much sports betting and online gambling?

A source had earlier indicated to LSR that the hearing would include a broader discussion of online gambling and sports betting. However, there is no mention of either in the press release.

It’s unclear if the scope of the hearing has changed, or if these avenues of investigation had simply gone unnoted in the release.

Any discussion of daily fantasy sports, however, is likely to involve the two main federal laws in play — the Unlawful Internet Gambling Enforcement Act and the Professional and Amateur Sports Protection Act. The former carves out legality for paid-entry fantasy sports at the federal level, so long as operators abide by state laws. The latter prohibits sports wagering in most states outside of Nevada.

What is the ‘federal role’?

What might come out of the hearing, other than a chance to shine a light on the DFS industry as it is currently situated, is unclear. It seems unlikely that Congress or the federal government would be moved to any sort of immediate action as a result of this hearing. Federal oversight of DFS, in lieu of state-by-state regulation of the industry, is a highly unlikely scenario.

However, the release does mention that the subcommittee intends to “consider whether there is a federal role to play” in DFS. It appears we will have to wait until the hearing, or perhaps even beyond that, to see what kind of federal involvement could be on the horizon, if any.