N.Y. Puts Fantasy Sports Bills on Fast Track

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By Gerald B. Silverman

March 24 — Legislation to legalize and regulate daily fantasy sports has been put on a fast track in the New York State Legislature, gaining greater urgency from a deadline included in recent settlements between Attorney General Eric T. Schneiderman (D) and leading fantasy sports companies.

At least six bills legalizing daily fantasy sports have been introduced in the legislature, including measures to have it regulated by a state agency and to have it explicitly exempt from the definition of games of chance in the state Penal Law.

The bills have gained greater urgency in light of March 21 settlements between Schneiderman and DraftKings Inc. and FanDuel Inc. The settlements place all litigation on hold through June 30 to give the state legislature time to pass a comprehensive regulatory scheme. If no legislation passes, the litigation will resume in September .

State Sen. John J. Bonacic (R), sponsor of one of the key bills and chairman of the Senate Racing, Gaming and Wagering Committee, told Bloomberg BNA that the bill would either be included in overall state budget legislation or would be a top priority after the governor and legislature approve a state budget.

“I want to have it in New York, provided we can monitor it, regulate it and make sure the consumer protections are there,” Bonacic said.

The state's fiscal year begins April 1.

Amendment Likely

Bonacic said he would probably amend his bill to bring daily fantasy sports under the oversight of the New York State Gaming Commission. The bill currently would have the state Department of Financial Services regulate the industry.

The industry requested that the legislation not include Gaming Commission oversight for fear that it would influence the public perception that daily fantasy sports was gambling, Bonacic said.

Assemblyman Felix W. Ortiz (D), the assistant Assembly speaker and sponsor of a similar bill , said the recent settlements have provided “the perfect opportunity now to add consumer protections by giving the state's Gaming Commission regulatory authority over this type of gambling.”

“The Gaming Commission has authority over any form of legal gaming in the state, including pari-mutuel wagering, both on-track and off-track betting, bingo and charitable games of chance and the state lottery for education,” Ortiz said in a statement.

“Adding fantasy sports to that list is both reasonable and justified given existing authority over similar types of gambling, and it would help prevent unfair practices in this booming multimillion dollar industry,” he said.

Ortiz said New York residents were responsible for more than $267 million in entry fees and $24.8 million in revenue for daily fantasy sites in 2015.

Cuomo Reviewing Bills

Gov. Andrew M. Cuomo (D), who pushed for the legalization of casino gambling in New York, has not taken a public position on the bills.

“We’re reviewing the settlement and will review any proposed legislation,” Richard Azzopardi, a spokesman for the governor, told Bloomberg BNA in an e-mail.

Other bills introduced this year would take a different approach to legalizing daily fantasy sports. Both S. 6092 and A. 8588 would explicitly exempt daily fantasy sports from the definition of games of chance in the state Penal Law, defining it as a game of skill instead. Similarly, A. 8587 would amend the state Constitution to exempt “fantasy sports wagering” from the prohibition against gambling.

“Daily fantasy sports are more properly equated to stock or option trading on the U.S. markets, than they are gambling since the contests involve skill as the dominating element of success,” Assemblyman Dean Murray (R), the chief sponsor of A. 8587 and A. 8588, said in a bill memo summarizing the legislation.

“Such skill is based on, but not limited to, statistical analysis and relevant knowledge of the real world sporting contest,” he said.

In addition, the State Senate approved March 14 a budget resolution to legalize and regulate daily fantasy sports (R. 4330). While a resolution lacks the statutory language of a bill, it was a clear indication of support in the Republican-controlled Senate.

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y., at gsilverman@bna.com

To contact the editor responsible for this story: Joseph Wright at jwright@bna.com

For More Information

The bills are available at: http://www.nysenate.gov/legislation.