More developments in daily fantasy sports saga

The mainstream media in the United States continued to have a field day with new developments in the ongoing daily fantasy sports saga (see previous reports) late Friday, reporting:

* The Nevada Attorney General quoted comments from DraftKings’ founders in a Redditt interview three years ago in which they compared DFS to a casino and described the concept as a mashup between poker and fantasy sports. The memo also pointed to text attached to images on DraftKings’ website that used the word “betting”.

The quote was used to refute DraftKings’ claims that it did not regard its activities as illegal gambling, with the AG’s report concluding:

“It appears that although the sites’ representatives publicly state that they do not believe daily fantasy sports involve ‘wagers’ or ‘bets,’ they do use the terms ‘betting’ and ‘wagering’ when they are not dealing with law enforcement agencies.” .

* The same AG’s memo to Nevada Gaming Control Board chairman AG Burnett was released to the public, revealing that the Board asked the AG for a legal opinion prior to declaring DFS activity in Nevada illegal on Thursday. The memo includes a detailed analysis of DFS but in short concludes:

“Daily fantasy sports constitute sports pools and gambling games. They may also constitute lotteries, depending on the test applied by the Nevada Supreme Court. As a result, pay-to-play daily fantasy sports cannot be offered in Nevada without licensure. See the memo here:

http://gaming.nv.gov/modules/showdocument.aspx?documentid=10487

* Nevada’s determination is being watched by other states and lawmakers weighing whether the sites constitute gambling or not based on their own laws.

* California politician and online poker and DFS legalisation proposer Assemblyman Adam Gray commented that the Nevada AG opinion illustrated the need for more oversight on DFS.

“Even church fundraisers for bingo night have some oversight. With the amount of money we’ve seen and the amount of participation we’ve seen in California and across the country, we’ve got to have some regulation,” he said in a telephone interview with the Associated Press news agency.

*A Pennsylvania lawmaker who originally proposed legalising DFS now wants to ban the genre except where it is operated by the state’s 12 licensed land casinos.

Legislation to limit daily fantasy sports websites in Pennsylvania is scheduled for a committee vote next week in the state House of Representatives, sponsored by Rep. George Dunbar.

The proposal would shut out major fantasy sports websites such as DraftKings and FanDuel unless they strike a deal with the state-licensed casinos, said Dunbar, whose amendment is expected to be considered Wednesday by the House Gaming Oversight Committee.

“It will still be legal as long as it’s done through our casinos,” the Westmoreland County Republican said. “It will be banned elsewhere.”

Dunbar said his latest plan would ensure that state regulators scrutinise operations of the now-unregulated companies to protect consumers. It also would benefit the casinos by drawing people to their websites and potentially raise more than $100 million annually for the state.

* In Illinois the regulator opined that DFS is illegal under state law but revealed that it has asked the state’s Attorney General to review the genre, following similar activity in Florida, New York and Massachusetts.

* In Delaware, one of three US states that has regulated and licensed online gambling, finance secretary Tom Cook revealed that state legal officials are reviewing the Nevada findings in order to evaluate whether its conclusions would apply to Delaware, a state which also allows parlay bets on NFL games as permitted by the federal Professional and Amateur Sports Protection Act (PASPA).

* Mary Kay Bean, a spokesperson for the Michigan Gaming Control Board, revealed that the state has been considering whether the state’s criminal gambling laws apply to daily fantasy sports, a process that started prior to the Nevada ban, although she said that the Nevada conclusions would obviously be taken into consideration.

* DraftKings and FanDuel resorted to an appeal for Nevada DFS players to sign an online petition that DFS remain legal and available. Both companies have issued rather aggressive statements suggesting regulators in Nevada are motivated by a need to protect the state’s lucrative gaming industry.

* In an interview with the Boston Globe, Nevada regulator AG Burnett said the Board had acted because DFS was illegal and in need of regulation.

“We really don’t do things at the behest of casinos,” he said. “Often times, they’re just as angry at us as the daily fantasy guys are right now, because we’re strict regulators and enforcers.”

Burnett also pointed out that the skill vs. chance argument is irrelevant under Nevada law, which considers any wagering on sports pools to be a form of betting that requires a state permit.

He also revealed that Nevada land casino operators have not lobbied for a ban on DFS, but have instead asked whether state laws permit them to associate themselves with the genre.

* In Florida, the federal prosecutor in Tampa who is investigating the industry as part of a Grand Jury process issued a subpoena to the Fantasy Sports Trade Association, the Wall Street Journal reported.

* The American Gaming Association issued a statement welcoming Nevada’s ruling on daily fantasy sports, and revealed that it has been pushing to get other state AG’s to issue opinions on DFS in the interest of legal clarity. A spokesman said: “Many of our companies would like to offer the product.”

The spokesman added: “The views of regulators in various states are very important in determining what could happen. But we think daily fantasy sports taps into a potential new customer base for casinos so it’s in our interest to find a way to work with these companies to attract new customers to our casinos.”

“The [legal] ambiguity has certainly has been a little frustrating,” the spokesman said in an interview. “It’s clearly an exciting and popular product that millions of people enjoy.”

* In Colorado, a spokesperson for the Colorado Gaming Association said that the trade group for state land casinos has scheduled a discussion on DFS for next week, where a formal position on the genre would probably be crafted. She said that the Association’s view was that DFS should be regulated.

A spokesman for the state’s Department of Revenue said that the legality of fantasy sports activity needs to be evaluated due to its carve-out in the federal Unlawful Internet Gambling Enforcement Act.

“The Colorado Division of Gaming does not [presently] have the authority to regulate fantasy sports games,” he said.