Category: DFS

FTC to block DFS company merger

A proposed merger between DraftKings, Inc. and FanDuel, Inc. will be challenged by the Federal Trade Commission.  The FTC claims that the merger would create a company that controls more than 90 percent of the market.

In the past rivals, the companies decided to join forces in November 2016 as each fought state regulators to get Daily Fantasy Sports legalized.  According to data from Eilers and Krejcik Gaming, the two companies have 95 percent of daily fantasy sports.

The FTC will file a lawsuit requesting a preliminary injunction to prevent the companies from closing the deal while it proceeds with an internal review to determine if the merger is legal under antitrust law.

College baseball players ruled ineligible for participating in fantasy football

ESPN reports that 5 Richmond University baseball players have been ruled ineligible by the NCAA due to their involvement in fantasy sports.

The university, through the athletic department, decline to offer further comment.

Per ESPN, the NCAA considers fantasy sports contests with an entry fee to be a form of sports wagering and therefore off-limits to student-athletes, regardless of sports.

In the state of Virginia fantasy sports, including Daily Fantasy Sports, are legal.

According to the original report from the Richmond Times Dispatch, the players were involved in Fantasy Football.  However, there is no detail as to whether it was Daily Fantasy Sports are a regular weekly fantasy football league.

While the amounts that the players were playing for were not disclosed, the overarching issue was the players involved in fantasy sports.

Kentucky Bill to legalize DFS falls by 1 vote

A bill to legalize Daily Fantasy Sports in the state of Kentucky has failed in the state’s General Assembly.

Similar to other DFS bills across the country, the bill would define DFS as a game requiring skill rather than luck.  It would also require a DFS operator to register with the state.

The bill fell on the House floor by just one vote, 37-36

H/t: Sara Friedman

Oregon bill would define DFS as “contest of chance”

House Bill 2761 was introduced in the State of Oregon which defines daily fantasy sports as a “contest of chance” for purposes of gambling and gaming laws.

The bill would effectively ban daily fantasy sports in the state.

The regulation of Daily Fantasy Sports varies from state to state with many looking to define it as a “game of skill” which would preclude it from certain gambling laws.

The bill was first introduced on Monday, February 6, 2017 so the road for this piece of legislation has a way to go.

New Jersey advances DFS bill in state Assembly

Will Daily Fantasy Sports become legal in the state of New Jersey?

A bill introduced to legalize Daily Fantasy Sports was approved by the New Jersey state Assembly’s tourism and gaming committee on Monday.  An updated bill established guidelines including a 10.5 percent quarterly tax rate on the gross revenue of all operators.

The legislation would define daily fantasy sports as a “game of skill” versus a “game of chance.”

Some of the key statements within the bill:

the outcome of a game will be determined by statistics generated based on the performance of actual individuals participating in real professional or collegiate athletic events;

all prizes offered to participants will be established and disclosed in advance to all participants;

the outcome will not be based solely on the performance of an individual athlete, or on the score, point spread, or any performance of a single real team or combination of real teams;

The bill imposes an annual registration and renewal fee for all daily fantasy sports providers in an amount equal to 9.25% of daily fantasy sports gross revenue.

  Also, the bill sets forth penalties for violations of the provisions of the bill and regulations

DraftKings gets go ahead in Germany

The Sports Business Daily reports that the Malta Gaming Authority has issued a controlled games skill license to DraftKings to allow the company to operate in the country of Germany and other European nations.  The license allows the company to operate in countries that do not require a local gaming license.

The report notes that the license applies to DraftKings only as the application predated the merger with FanDuel.  Unlike the license it was given in the UK, this one designates daily fantasy sports as a game of skill.

The expansion is big news for the daily fantasy sports company.

Hawaii introduces new bill to legalize online gaming

A new internet gaming bill was introduced in Hawaii on Friday.  The bill is one of the many different pieces of legislation being introduced across the nation as a swell of bills concerning gaming is coming to the forefront in 2017.

The bill identifies that “tens of thousands” of Hawaii residents are already using illegal online gambling on unregulated internet web sites.  The bill is meant as a way “[t]o protect Hawaii residents who gamble on the Internet, and to capture revenues generated from internet gambling in Hawaii…”

The legislation will seek to create an “internet-only lottery and gaming corporation, which shall be a public instrumentality…”  It will be subject through a “system of audits and reports.”

The bill goes on to define its scope on what the internet lottery and gaming corporation may do:

(1)  Offer internet wagering on games of chance and games of skill, including lottery, poker, and casino games, to individuals over the age of eighteen years; provided that the corporation shall not offer internet wagering on any sporting event or sporting contest;

(2)  Enter into agreements with other state gaming entities for the offering of multistate games, consistent with state and federal law;

(3)  Utilize the broad reach of its internet gaming platform to offer legally compliant free-play games and sweepstakes with Hawaii related prizes to individuals outside of Hawaii, for the purpose of attracting tourists and providing free exposure for Hawaii and Hawaii businesses to domestic and overseas markets;

(4)  Conduct no more than two land-based gaming entertainment events annually, related to the corporation’s internet game offerings, for the purpose of attracting tourists to Hawaii; provided that the corporation shall not have the authority to conduct any other form of land-based gambling; and

(5)  Engage in other activities consistent with the purpose of this chapter and rules adopted hereunder, and with state, federal, and international laws.

Notably, the bill does not attempt to define a “game of chance” versus a “game of skill.”

The introduction of the bill comes a year after it ruled Daily Fantasy Sports illegal gambling.  Just a year ago, the state’s Attorney General defined Daily Fantasy Sports as contests that constitute gambling under Hawaii law.  Could we see the state revisit this in light of the proposed law?

Washington state unlikely to pass DFS law in 2017

For those hoped 2017 would be the year that Washington State would legalize Daily Fantasy Sports, it appears that the hope has faded just 18 days into the new year.

A Senate Commerce Committee hearing on a Daily Fantasy Sports bill which would classify DFS as a game of skill did not provide any timeline as far as movement and senate committee chair Michael Baumgartner indicated that there would be no chance that Daily Fantasy Sport will move this year.

The bill would classify DFS as a game of skill and not gambling for purposes of the Gambling Act.  It defines a fantasy competition and provides certain conditions regarding prizes and the determination of the contest winner.

The hearing was the first for the bill although some committee members noted it was similar to one introduced last year.

Senate Bill 5169 would classify Daily Fantasy Sports as a game of skill rather than that of chance which would exempt it from any classification of gambling. According to the proposed bill, “[a]ll prizes and awards offered to winning participants are established and made knwon to the participants in advance of the game or contest and teh value of the prizes and awards is not determined by the number of participants or the amount of any fees paid by participants.”  Ensuring the classification of skill, the proposed legislation notes that wins “reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals in multiple real world sporting or events…”

Testifying in favor of the bill was former state attorney general Rob McKenna who now works at a law firm representing DraftKings and FanDuel.  McKenna indicated that there were 40 states that allow Daily Fantasy Sports.  Ohio would soon be the 41st state with legislation pending.  McKenna is hopeful that Washington the 42nd state.

The committee asked McKenna about how other states have addressed regulation to which he referred them to states such as Colorado, Virginia and Maryland.

In addition to McKenna, Maureen Greeley, the Executive Director of the Evergreen Council of Problem Gambling testified before the committee that warned of gambling addiction and the concern about regulation.

It was clear that without a lot of detailed questions regarding the bill, that the committee is taking baby steps in learning the intricacies of Daily Fantasy Sports and without the education, it’s unlikely that we’ll see DFS legal in Washington in 2017.

For more background on the battle for DFS in Washington state, I wrote a piece last year.