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Virginia Legislature Becomes First In U.S. To Pass Bill Setting Up Legal Structure For DFS

The Virginia legislature yesterday became the "first in the country to pass bills setting up a legal structure for daily fantasy contests," according to Graham Moomaw of the RICHMOND TIMES-DISPATCH. There was "little debate over the legislation that cleared the General Assembly," but it was "opposed by the Virginia Assembly of Independent Baptists." The legislation would require DFS sites to "register with the Department of Agriculture and Consumer Services and pay an application fee of $50,000." Some consumer protections "would be put in place, such as limiting play to those 18 or older, prohibiting employees of the sites from competing for cash prizes and allowing players to request self-imposed bans" (RICHMOND TIMES-DISPATCH, 2/25). In Boston, Curt Woodward notes Virginia’s bill "specifically exempts cash-prize fantasy sports contests from the state’s definition of illegal gambling." The bill now heads to Gov. Terry McAuliffe "for final approval." DFS companies, led by DraftKings and FanDuel, "supported the Virginia bill as part of a multistate campaign to explicitly legalize and regulate their contests" (BOSTON GLOBE, 2/25).

STATE TO STATE: In New York, Jon Campbell writes DFS sites under a new bill in the state senate would be "hit with a registration fee" and a 15% state tax. The proposal would "make clear that 'interactive fantasy sports' contests are legal in New York while requiring the state Department of Financial Services to oversee and regulate them." The companies offering the fantasy contests "would have to pay at least a $500,000 registration fee" and would see their gross revenues taxed 15% (Westchester JOURNAL NEWS, 2/25). In Nashville, Joel Ebert reports Tennessee state Sen. Jack Johnson yesterday "presented a bill that would create an advisory task force to oversee fantasy sports." The proposed nine-member task force would "create a regulatory framework that would oversee" the way DFS companies operate in the state. The task force "would be able to recommend any necessary statutory revisions to the state’s consumer protection laws" (Nashville TENNESSEAN, 2/25). In Indianapolis, Mark Alesia reports a bill clarifying the legality of DFS in Indiana "advanced to the full House" yesterday with the "minimum age to play starting at 18." Members of the Public Policy Committee had "discussed raising the minimum age to 21" (INDIANAPOLIS STAR, 2/25).

CUBAN SOUNDS OFF: Mavericks Owner Mark Cuban in a USA TODAY Op/Ed wrote certain politicians have "sought to make a name for themselves by promoting efforts to ban daily fantasy in their respective states." They are "wrong and misguided." But the "larger story -- and the one that’s not being told -- is that the industry has embraced sensible regulation, and that lawmakers are taking notice." Cuban: "As an investor, I don’t make a lot of money following the herd. My job is to discern the difference between signal and noise. Right now, the noise is that fantasy is dead; the signal says otherwise." Cuban noted he has "invested in two companies within the past year -- Sportradar and FantasyLabs -- that operate in the fantasy sports space." His rationale "is twofold." First, fantasy sports "create exponential value for the sports, entertainment and tech industries." Second, fantasy sports is "a game of skill" that is "fundamentally different from gambling." With fantasy sports, "just like in actual sports, a player’s success or failure is determined by their skill" (USA TODAY, 2/24).

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