Tennessee legislature approves DFS bill

The US state of Tennessee will likely become the third to legalise daily fantasy sports competitions if Governor Bill Haslam signs a new bill into state law.

The state governors in Indiana and Virginia signed similar measures into law in their states earlier this year (see previous reports)

On Tuesday the state Senate agreed on a vote of 27 vs. 2 to approve a legalisation bill forwarded from the House following a positive 67 vs. 17 vote the previous evening.

In voting for the measure, state lawmakers overrode the opinion of the state Attorney General, Herbert Slatery, who earlier this month claimed DFS activity constituted gambling and was illegal in Tennessee.

The drafters of the new bill appear to have been at some pains to allow for all contingencies; provisions include:

* The creation of a fantasy sports task force to advise and recommend legal revisions to consumer protection statutes;

* Empowers the Secretary of State to initiate investigations on any violations of state laws and draft a fee structure for applicant operators;

* Introduces licensing processes and creates misdemeanour offences for unlicensed activity;

* Sets a tax rate of 6 percent on revenue generated by operators from Tennessee sources;

* Imposes player deposit limits of $2,500 a month, but with flexibility for exceptions, and limits the number of entries for individual competitions;

* Requires operators to segregate player deposits from operational funds;

* Details a variety of consumer protection requirements that include security of data, excluding operator employees from competitions, problem gambling precautions, truthful advertising regulations and anti-underage gambling arrangements based on a minimum participant age of 18 years;

* Requires operators to initiate independent third party annual audits;

* Forbids operators to base competitions on amateur sporting events;

Governor Haslam now has 10 days to act on the bill, either by veto or approval, but with such strong legislative support for the measure he would be hard-pressed to justify a veto.

DFS operators were quick to praise Tennessee lawmakers, with a DraftKings spokesman commenting:

“Today, the Tennessee legislature took an important step to ensure that more than one million Tennesseans can continue to enjoy skill-based fantasy contests with thoughtful consumer protections in place. We thank Senator Jack Johnson and Representative Pat Marsh for their leadership on this important issue.”

A FanDuel spokesman said in a statement:

“The legislature has passed strong, but smart regulations ensuring the more than one million fantasy players in Tennessee benefit from important consumer protections and can continue to play fantasy sports. We want to thank the bill sponsors Senator Jack Johnson and Representative Pat Marsh, and the members of the legislature for taking a detailed and careful approach to this issue, which delivered a reasonable solution for the state.”

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