New Jersey Bill on Fantasy Sports Goes to Governor

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By John Herzfeld

Large-scale commercial fantasy sports operations would be regulated and taxed under a bill passed by the New Jersey Legislature and sent to Gov. Chris Christie (R) for approval.

A spokesman for Christie declined to comment July 6 on whether the governor would sign or veto the fantasy sports bill ( A-3532/S-1927). The state Senate passed it by a 29-6 vote June 29, after the Assembly voted 56-16 in favor May 22.

Sponsors of the bill, which would add New Jersey to a growing list of states regulating fantasy sports, said it would provide needed oversight to protect consumers from unfair business practices. The bill’s preamble named New York, Massachusetts, Kansas, and Tennessee as states with fantasy sports laws.

The state would charge a quarterly fee of 10.5 percent of gross revenue from fantasy sports. The state Senate, in taking up the Assembly version, dropped a plan for a 9.25 percent annual fee.

The bill would raise $6.6 million in annual revenue, according to fiscal estimates by each house.

DraftKings, FanDuel

The legislation would apply to large-scale commercial fantasy sports activities like those run by DraftKings Inc. and FanDuel Inc., defined as fantasy or simulated activities or contests with an entry fee in which a participant owns or manages an imaginary team and competes against other participants or a target score for a predetermined prize.

Small-scale season-long fantasy sports activities by family and friends wouldn’t be covered.

A state agency would issue permits to fantasy sport operators, as well as casino licensees and licensed racetracks that partner with fantasy sports providers. Fantasy sports operations would need to have at least one server based in Atlantic City, N.J.

Christie: ‘Who Cares?’

Christie spokesman Brian Murray, in an email to Bloomberg BNA, cited “longstanding policy” in declining to comment on a bill before the governor has had “ample opportunity to give it a thorough review.”

In widely quoted remarks during an October 2015 Republican presidential debate, Christie objected to “talking about getting the government involved in fantasy football.” According to news reports, he pointed to other priorities facing the U.S. before concluding: “Enough on fantasy football. Let the people play. Who cares?”

To contact the reporter on this story: John Herzfeld in New York at jherzfeld@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Text of the bill is at http://src.bna.com/qws.

Copyright © 2017 Tax Management Inc. All Rights Reserved.

Request Daily Tax Report: State