Could California Be The Next State To Ban Fantasy Sports?

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Tuesday, November 17th, 2015 | Written by Lucy Brown

With all of the controversy surrounding daily fantasy sports (DFS) betting recently, it’s no surprise that some states are taking steps to regulate the industry. California is one of the first states in which a bill, AB 1437, has been introduced to regulate daily fantasy sports betting. The bill was introduced in September, with its sponsor, California Assemblymember Adam Gray, calling for what he describes as a “well thought out” plan to control betting on fantasy sports within the state.

While bills can take protracted amounts of time to work their way through the legislature, with no guarantees of success, in the meantime there is mounting concern in California that DFS wagering could soon follow the same fate as New York. Earlier this month, New York Attorney General Eric Schneiderman ruled DFS sites, such as FanDuel and DraftKings, as illegal gambling enterprises “intended to evade the law and fleece sports fans across the country.” Likewise, California Attorney General Kamala Harris (photo) has already received a letter from Assemblymember Marc Levine requesting that fantasy sports betting websites immediately stop operating in California.

Adam Gray Weighs in on Daily Fantasy Sports Betting

After introducing his legislation in the California Assembly, Adam Gray went on the record with the press regarding his views and opinions both on the daily fantasy sports betting industry and how it should be regulated. His statements were made prior to the controversy surrounding employee betting within daily fantasy sports betting sites. Some of the key points that he made included the fact that he had:

– Personal Familiarity with Fantasy Sports. Gray stated that he began to grow concerned about daily fantasy sports betting when he was signing up for a traditional season-long fantasy NFL league on Yahoo!

– Worries About Consumer Protections. Gray is concerned that daily fantasy sports betting sites may not be taking the steps necessary to keep minors from logging into their sites and to protect users’ financial information. He also wants assurances that daily fantasy sports betting sites are doing everything they can to ensure fairness for all users.

– A Desire to See Daily Fantasy Sports Treated as Gambling. Gray feels that daily fantasy sports betting sites should fall under the jurisdiction and control of the California Gaming Commission if they wish to operate within the state. He likened the industry to horse racing, saying that online betting at racetracks has been free of scandals due to regulations.

– No Tight Timetable. Gray said that he wants to make sure regulation is done correctly rather than expediently. He plans to hold a hearing on the subject in December and not move the legislation forward until January 2016.

What’s in the California DFS Betting Bill?

So just what has Adam Gray included in his bill? Named AB 1437, the bill includes the following points:

– Any daily fantasy sports operator will be subject to the regulations if they provide services or operate a site in California.

– Daily fantasy sports betting is clearly defined in the bill with language similar to what is in the Unlawful Internet Gambling Enforcement Act.

– All daily fantasy sports betting operators will be required to obtain a license, and all licensing will be handled by the California Department of Justice.

– The regulations will not be included in the bill itself. The bill will merely establish a licensing system and require all operators to begin working toward licensure within a set period of time. Regulations will be implemented after the bill is signed into law.

– There will be licensing fees required to operate and operators will be subject to a tax, but the rates have not yet been decided upon.

Assemblyman Levine Spearheads Attack

After losing New York, which represents a huge proportion of the daily fantasy sports’ market in the US, sites such as FanDuel and DraftKings, can not afford to lose the Californian market, too. Nevertheless, all indications suggest California Attorney General Kamala Harris may already be scrutinizing the DFS industry after receiving a letter from Assemblymember Marc Levine, stating his belief that “fantasy sports betting” is illegal under state law. As an extract reads:

“This letter is to respectfully request that your office take action to order FanDuel, DraftKings and other fantasy sports betting websites to immediately discontinue business in California.”

Levine says DFS games should be prohibited in California until state law are clarified, and better protection is afforded to consumers. While it has not officially been confirmed that Attorney General Kamala Harris is investigating the industry, a recent report from NBC Bay Area would indicate an investigation is already underway, stating:

“The office of California Attorney General Kamala Harris declined to comment, citing potential interference with the pending investigation into daily fantasy sports teams.”