DraftKings, FanDuel Get Fantasy Sports Permits in New York

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Gerald B. Silverman

Aug. 23 — Six smaller interactive fantasy sports operators are hoping to join newly permitted DraftKings Inc. and FanDuel Inc. in the New York market.

The smaller operators have applications pending before the New York State Gaming Commission, which is expected to act on them “as quickly as possible,” Lee Park, a spokesman for the commission, told Bloomberg BNA Aug. 23.

The commission granted temporary permits Aug. 22 to DraftKings, FanDuel, Yahoo Inc., FantasyDraft LLC and StarStreet Inc., which operates Draft, a fantasy sports app.

Applications are pending from BDL Penn Enterprises LLC, Fanamana, OwnThePlay, No Halftime, iTeam Network and Synkt Games—letsRUMBL.

“MLB pennant races are heating up, an exciting NFL season is just around the corner and we are thrilled to be able to bring DraftKings back to millions of New York sports fans,” Jason Robins, chief executive officer of DraftKings, said in a statement.

Formal Regulations Forthcoming

“While the commission continues work on formal regulations for these games, these temporary permits get companies up and running in New York State, while assuring resident players that safeguards are in place,” Robert Williams, executive director of the commission, said in a statement.

Under the new state law, the fantasy sports companies must pay a tax equivalent to 15 percent of their interactive fantasy sports gross revenue generated in the state. They also must pay a tax of 0.5 percent of revenue, up to $50,000.

“We thank the New York State Gaming Commission for being thorough and expedient in approving the return of fantasy sports to New York,” Robins said.

Earlier this year, Attorney General Eric T. Schneiderman (D) reached settlements with DraftKings and FanDuel that essentially shut down daily fantasy sports in the state. The settlements placed all litigation on hold through June 30 to give the Legislature time to pass a comprehensive regulatory scheme.

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: Ryan Tuck at rtuck@bna.com

For More Information

Further information on permit approvals is at https://www.gaming.ny.gov/ifs/.

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Daily Tax Report