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What are we likely to see and hear on Wednesday when the House Subcommittee on Commerce, Manufacturing, and Trade meets?
First, here’s everything you need to know about the hearing:
That’s the million-dollar question, of course, but it’s not altogether clear we’ll know the answer, even after it’s over.
This is an informational hearing. These types of hearings happen in committees all the time, without any concrete action being taken by Congress.
It could simply be a chance for some members of Congress to become familiar with an industry that grew exponentially in recent years.
The initial impetus for the hearing came from Rep. Frank Pallone (D-NJ), the ranking Democrat on the overarching House Energy and Commerce Committee.
Last year, Pallone had been wondering aloud why daily fantasy sports were OK, legally, while sports betting was illegal across most of the country. It was clear he was trying to draw attention to New Jersey’s efforts to regulate sports betting.
How much of the sports betting vis a vis daily fantasy sports argument will come up is a variable; but Pallone, as an ex officio member, is all but certain to bring up this line of questioning if he sits in. And he likely isn’t the only one.
The background memo for the hearing gave us perhaps the best direction as to what exactly the committee may look at:
From the memo:
Those lines of questioning give us some clue as to what the subcommittee’s aims are.
Here are some of my best guesses as to what will come up on Wednesday and what will or won’t happen in the aftermath.
While the witness list for this hearing has a lot of credible experts, it’s missing some of the DFS industry’s major players.
The glaring absences from the witness list also include the major North American professional sports leagues — the NBA, the NFL, the NHL and Major League Baseball — who reportedly declined invitations. All have meaningful relationships with DraftKings and FanDuel.
One would expect some chiding from some of the members because these important parts of the DFS industry are not appearing.
At the same time, there seems to be little upside for DraftKings, FanDuel or the leagues to appear, since the possibility of meaningful federal action on DFS is fairly low.
Peter Schoenke of the Fantasy Sports Trade Association is the only person at the hearing representing the interests of the two biggest DFS sites.
The intersection of federal law with daily fantasy sports is probably one of the things that will most interest members of Congress in this hearing.
The background memo spends a lot of time giving the overview of the possible laws in play, including:
Legal expert Ryan Rodenberg is the witness who will tackle these issues.
The subcommittee holding the hearing is concerned mostly with consumer protection matters. It includes oversight of the Federal Trade Commission. It is not a committee that generally would consider gambling issues in the U.S. (more on this below).
So far, the FTC has been loathe to get involved, even when asked by members of this committee. If the role of the FTC and daily fantasy sports is not examined directly in the hearing, I’d expect that to become a possible avenue of inquiry moving forward.
There is currently a large gap in consumer protection as it relates to DFS in the U.S. Three states have passed legislation — Indiana, Virginia and Tennessee — while the attorney general in Massachusetts instituted consumer protections as well.
Everywhere else where DFS operators are currently active, the industry exists unregulated. And even in the states above, regulation is still in the process of being implemented. And sites have no obligation to be a part of ‘x’ state’s regulatory scheme.
If you’re expecting someone to propose a bill regarding regulation or explicit legalization of daily fantasy sports that will gain traction in Congress in the near future, I think you’re likely sorely mistaken.
Outside of the laws above, the federal government has shown little appetite for getting directly involved with any aspect of the gaming industry — especially as a positive force for change — as it is currently situated in the U.S.
There’s also the matter that this committee isn’t the one that usually considers gaming issues. UIGEA and PASPA, for instance, are the domain of the judiciary committees in both the House and Senate.
Expecting real momentum for either a repeal of PASPA or taking a fresh look at UIGEA would be good outcomes, but are also unlikely in the short term.