Daily fantasy sports clashes with Arizona AG

The legal debate over daily fantasy sports appears to be heating up in Arizona, where Senate Bill 1515 has been introduced, allegedly in a bid to clarify the genre’s legal status in the state.

Current Arizona law makes it to illegal to spend money to participate in any game or contest of chance of skill, including bets on the outcome of a future event….but SB1515 wants to specifically exempt “fantasy sports league competitions.”

Fantasy Sports Trade Association lobbyist Kelsey Lundy told a Senate Judiciary Committee hearing this week that the goal is to clarify the position of fantasy sports in Arizona law following a letter from state AG Mark Brnovich to DraftKings which apparently cautions that the company is failing to warn Arizonans they would be breaking the law by participating and collecting any winnings.

Lundy said Arizonans have been competing in online fantasy leagues since the early 1990s, but a problem in the state is that lawmakers have approved exceptions to gambling law ranging from bingo nights at churches to the games of skill.

Fantasy sports is such a game of skill but has not been specifically exempted, she claimed, and that should now take place in the interest of clarity.

Fantasy sports also faces a challenge from state tribal gaming interests; in 2002 Arizona signed a compact giving the tribes exclusive right to operate certain kinds of casino gambling.

A provision of that agreement is that the state is restricted from expanding gaming outside the tribal areas, and if it does so the tribes are free to themselves extend their operations elsewhere…without sharing profits with the state, which run to almost $90 million.

Whilst the Senate Judiciary Committee has opined that the legislature has never considered fantasy sports league competitions to be a form of gambling, the tribes have taken a different view.

Valerie Spicer, executive director of the Indian Gaming Association of Arizona, said her members believe SB1515 could trigger the removal of gambling expansion restrictions.

“Simply stating that it is not gambling doesn’t mean that it’s not gambling,” Spicer said of fantasy sports, pointing to actions taking place across the the United States by state attorneys general reviewing the genre.

And, she says, Arizona’s AG has shown that he regards fantasy sports as illegal in Arizona state law.