California DFS Bill Sails Through State Assembly

Home » Poker News » California DFS Bill Sails Through State Assembly

Friday, January 29th, 2016 | Written by Lucy Brown

This week, California became the first state in the US to pass daily fantasy sports (DFS) legislation after the California State Assembly voted almost overwhelmingly to support the Internet Fantasy Sports Games Consumer Protection Act, also known as Assembly Bill 1437. The bill still needs to pass through the Senate before DFS companies can start applying for licenses, but in the meantime the Assembly’s positive vote bodes well for the future, and commenting on the landmark outcome, Assemblyman Adam Gray (photo), the bill’s sponsor, stated:

“The support of the Assembly today sends a strong signal that protections for consumers and children online are a top priority. We have a responsibility to put safeguards in place to ensure a fair and level playing field.”

Voted By 62-1

In order to pass in the State Assembly, AB 1437 needed to garner at least two-thirds of the chamber’s votes, or 54 votes, in order to progress to the Senate. While there were hopes that it would manage this going into Wednesday’s vote, few could have predicted its almost unanimous approval by 62-1, with Assemblymember Marc Levine the only dissenting voice.

Following its success, Assemblyman Adam Gray praised the state of California for being “ahead of the curve”, and also expressed his optimism that in spite of the hard work that still lies ahead that The Golden State would soon become the first in the country to pass and implement DFS legislation. Gray further highlighted his priority of seeing Californian citizens being able to continue playing the hugely popular game “in a safe and fair environment.”

Still Work To Be Done

During Wednesday’s debate, a number of lawmakers spoke in support of AB 1437, with Assemblymember Donald Wagner later praising the Assembly’s consensus as a model on how California should be conducting its business. While discussing AB 1437, Adam Gray explained that the bill does not lay out the current legality of DFS wagering, with that task left to the California Attorney General Kamala Harris. Once an opinion has been received, state legal experts can then move to add whatever amendments will be required to make AB 1437 compatible with state law. Commenting on this point, Assemblymember Eric Linder said:

“It’s very clear that this bill is still a work in progress, anyone can look and tell you that. I think it’s worth noting that to do nothing puts up to six million Californians who are playing fantasy sports at risk.”

Closer Look At AB 1437

Assembly Bill 1437 aims to see a daily fantasy sports industry regulated in California, with applicants subsequently screened for suitability before having to pay an annual fee in return for a state license. The cost of such a license has yet to be disclosed, though. In addition, online poker gets no mention in the DFS-only bill.

iPoker Still Illegal

California has been touted as one of the US states most likely to adopt online poker regulation in 2016. Online poker advocates, such as the Poker Players Alliance and PokerStars, have fought tirelessly to raise the profile of the game in California, and highlight the extra revenues the game could generate for local government. Unfortunately, efforts to advances iPoker legislation have repeatedly been thwarted in the Golden State, including Adam Gray’s online poker bill, AB 431, not least by competing factions involved in the California’s gambling industry looking to undermine the positions of their rivals.

Still Awaiting Attorney General DFS Opinion

Meanwhile, daily fantasy sports have been permitted to exist within a grey area in California, as well as a number of other states across the US. Despite AB 1437 passing an Assembly vote, however, the possibility still exists that California Attorney General Kamala Harris could still oppose the bill and adopt a stance similar to that of New York and Nevada which determined DFS to be a form of online sports betting, leading to cease-and-desist orders being sent out to companies such as FanDuel and DraftKings. Giving his view on the issue, Wednesdays sole DFS objector, Assemblyman Marc Levine, commented:

“This is gambling. There is no doubt about it. Let’s not fool ourselves. An entry fee is a wager. Cash prizes are gambling winnings. DFS companies are bookies. Playing these games is sports betting.”

Last year, the DFS industry generated $3.7 billion in revenues, with New York representing the single biggest market for the game, and California the second largest with 15% of revenues, according to Eilers Research. Being shut out of California would therefore represent a major blow to the DFS industry, although judging from just Assemblyman Marc Levine’s objection this week, that seems unlikely to happen.