DFS Legislation Movement Gaining Ground in the US

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Thursday, June 22nd, 2017 | Written by Charles Washington

Before 2015, the possibility of legalizing daily fantasy sports (DFS) seemed unrealistic, despite DFS websites continuing to offer their products in the United States without providing any sort of official permission from local authorities. Nevertheless, at least consumers still had a place to go where they could bet on fantasy sports on both a weekly and daily basis.

This all changed a couple of years back, though, when DFS operators became visible to the mainstream after making their presence known through massive advertising campaigns appearing on a number of sports channels. As a consequence, discussions concerning DFS regulation soon became one of the most talked-about topics, especially considering that it was mentioned at the third Republican presidential debate.

In 2016, a total of eight states subsequently passed DFS laws, and today DFS wagering is currently legal in 12 states, although it is taking place in around 40 states across the county, albeit within a grey market. In the meantime, a number of states have gone so far as to ban daily fantasy sports completely, namely Montana, Iowa, Washington, Louisiana, Arizona, Texas, Alabama, Hawaii, Nevada, Delaware, and Idaho. Elsewhere, however, other states are advancing legislation in order to make DFS legal, while other states want to define DFS as gambling, and make it a more defined aspect of their current gambling legislation. Here is some information regarding the current situation in different states, and their potential for regulation in the future.

Mississippi

Mississippi was one of the main states that had DFS bills introduced over the most recent legislative session, and earlier this year, after receiving approval in the legislature, Governor Phil Bryant signed bill S 2541 into law. The state is now hoping to reap an extra $5 million in tax revenues each year to help alleviate some of its budget woes.

Texas

Texas has tried to introduce several gambling bills; however, this year over the years, including Bill S 1970, which was filed by Senator Lois Kolkhorst. This piece of legislation aims to make DFS operations legal within Texas, while providing a proper regulatory framework to ensure a high level of consumer protection. Considering the state’s legislature meets biennially, failure to approve the bill in 2017 will make 2019 the next possible date for regulation to be adopted.

Illinois

Illinois has been seeking to expand its gambling industry by introducing DFS legislation, and regulating it as part of the state’s sports betting market. Within the past month, the Senate subsequently passed H 479 by a wide margin of 42-10, and it now falls upon the House to advance the bill to the point of adoption. Commenting upon the progress made so far, Tom Swoik, executive director of the Illinois Casino Gaming Association, stated:

“Existing law, which prevents Illinois’ licensed operators from offering any gaming product online, has created a vacuum filled by operators of illegal websites. By bringing online gaming out of the shadows and into a licensed and regulated market, Illinois can garner new tax revenues and tens of millions in upfront licensing fees that can be used for classrooms, pensions and social services.”

Iowa

Although Iowa has often been considered as a front runner in race towards DFS legalization and regulation, at this stage of the process, and expansion of the local gambling market looks seems to be a long shot, at best. As well as forbidding DFS betting, Iowa’s gambling law has stopped a number of major DFS companies from operating in the state at all, leaves them sitting on the sidelines.

Ohio

Ohio is seen as a front runner in the drive towards DFS regulation, and this year a bill was introduced as a way of helping te state’s domestic gambling market to grow. It is currently being considered by the local House Committee before being allowed to progress further in the legislature for a vote.

Vermont and Arkansas

Vermont became the third state to pass DFS legislation in 2017, the others being Mississippi and Arkansas, whose governor Asa Hutchinson signed HB 2250 into law in April. Vermont’s moment came just over a week ago, with Vermont Governor Phil Scott giving final approval to S 136, which defines fantasy sports contests as “a virtual or simulated sporting event governed by a uniform set of rules adopted by a fantasy sports operator in which:

“(A) a fantasy sports player may earn one or more cash prizes or awards, the value of which a fantasy sports operator discloses in advance of the contest;
(B) a fantasy sports player uses his or her knowledge and skill of sports data, performance, and statistics to create and manage a fantasy sports team;
(C) a fantasy sports team earns fantasy points based on the sports performance statistics accrued by individual athletes or teams, or both, in real world sporting events;
(D) the outcome is determined by the number of fantasy points earned; and
(E) the outcome is not determined by the score, the point spread, the performance of one or more teams, or the performance of an individual athlete.”