Optimistic DFS Legislation Prospects Overstated

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Monday, March 27th, 2017 | Written by Adam Brown

At a recent conference, Herrick sports lawyer Irwin Kishner, an industry expert who sits on the Cardozo Law School panel, shared his opinion that daily fantasy sports betting will soon become legal in all 50 states across the US. Keen to share the positive news, sports business writer Daniel Roberts quickly tweeted:

“big prediction from atty Irwin Kishner on our @CardozoLaw sports gambling panel just now: “I think all states will allow #DFS very soon.”

For fans of daily fantasy sports (DFS) betting, this was naturally welcome news, with social media people celebrating the soon-to-be legalization of sites like FanDuel and DraftKings. Unfortunately, it seems that the jubilation may have been premature, and it still remains an unlikely prospect that daily fantasy sports betting will go nationwide anytime soon.

A Matter for Individual States

Under the laws of the US, gambling is left in the hands of individual states, and so far, they have taken many different views on whether daily fantasy sports betting is gambling, and how it should be regulated. Let’s take a look at the current state of daily fantasy sports betting in a number of key states.

– Alabama: In 2016, lawmakers tried to pass a law to legalize and regulate DFS betting, but the attempt was unsuccessful.

– Arizona: DFS is illegal, and the state has not actively explored regulating the industry due to the compact between the state government and tribal governments that operate casinos in Arizona.

– Hawaii has very restrictive gambling laws and is believed not to be interested in working with operators to regulate DFS betting.

– Iowa: At the present time, DFS is illegal, although legislators are considering a bill that would legalize and regulate the industry.

– Kansas: DFS is legal but not regulated in the state.

– Louisiana does not permit DFS. Back in 2015, it seemed that lawmakers were going to succeed in changing the existing law to regulate the industry, but debates stalled and the state has not revisited the issue since.

– Maryland: A DFS law passed in 2012 but has been challenged in court, giving it an uncertain future.

– Montana: DFS is alive and well in Montana, but not with the big names in the industry. Instead, Montana offers betting on fantasy contests through a state-run monopoly, and has shown no interest in letting third-party operators do business in the state.

– Nevada has passed a law to regulate the DFS industry. Under the law, regulators must obtain a license to operate, and US Fantasy has obtained the required licensure, but Draft Kings and Fan Duel have not pursued licensing.

– Texas: State laws have made it difficult for DFS sites to operate. Fan Duel currently does not accept customers in the Lone Star state, but Draft Kings does.

– Washington: DFS is illegal, and over the last two years, bills have been introduced to change the existing laws, but both pushes were unable to win support from lawmakers in Olympia.

– All Other States in the US either have passed DFS laws or are allowing companies to provide access in a gray area.

Long and Short

Currently, DFS is not officially legal in around 80% of all US states, even though industry giants such as DraftKings and FanDuel insist that their contests are actually ‘games of skill’ and are therefore not breaking any local state laws. In the meantime, a number of states have expressly forbidden any DFS betting activity, including Montana, Iowa, Washington, Louisiana, Arizona, Texas, Alabama, Hawaii, Nevada, Delaware, and Idaho. Furthermore, even the most optimistic DFS advocate would admit that there was little chance of any of these states reversing their well-publicized opinions and regulating the industry any time “soon”.

Slow Road Ahead

The reality of the situation is that DFS legislation has a long road ahead, as demonstrated by the fact just 12 states have thus far approved the industry, with 8 of them doing so in 2016. In the meantime, Mississippi became just the first state to approve DFS legislation this year, after Governor Phil Bryant signed House Bill 967 into law in March.