The U.S. House Subcommittee on Commerce, Manufacturing & Trade held a nearly two-hour hearing yesterday to discuss the DFS industry, but the "real purpose" of the hearing was to discuss the "decriminalization of sports gambling nationwide," according to A.J. Perez of USA TODAY. U.S. Rep. Frank Pallone Jr. (D-N.J.) after the hearing said, "The biggest thing for me is that I would like us to legalize sports betting. ... The point is allowing sports betting to be legal in states like New Jersey who want it. That's what I was hoping this would contribute to, primarily." Perez reports the DFS landscape was "discussed extensively," as a handful of committee members "queried the panel ... about protecting the average daily fantasy player from algorithms used by elite players that tilt the odds in their favor, and the patchwork of state laws that currently govern how the daily fantasy is regulated." The hearing did not include representatives from FanDuel, DraftKings or the major pro sports leagues. Pallone said that "more hearings and legislation to protect consumers were possibilities" (USA TODAY, 5/12). In DC, Rick Maese notes Pallone last year requested the hearing and is "pushing for legal sports gambling in his home state." Pallone: "The daily fantasy sports industry has been arguing that daily fantasy sports is somehow completely separate from sports betting, despite the fact that similarities can't be denied" (WASHINGTON POST, 5/12).
LACK OF OVERSIGHT: The AP's Andrew Taylor noted the hearing did "not represent a rush to impose federal regulations on the booming" DFS industry. Gambling is generally "regulated by the states, which have stepped up their activity." Four states "explicitly legalized the games this year, with varying degrees of consumer protection." But New York has "cracked down on DraftKings and FanDuel as illegal gambling operations and about a dozen states are challenging the legality of commercial fantasy sports." Energy and Commerce Committee Chair Fred Upton (R-Mich.) said, "We must keep in mind that a patchwork of differing and contradictory state laws has the potential to negatively impact consumers, and harm further growth and innovation in the process" (AP, 5/11). In California, Ryan Kartje writes it has "been a tumultuous year for the industry, with 10 state attorneys general ruling daily fantasy to be in violation of state gambling laws, and 12 other states actively considering regulatory legislation." A few members of the subcommittee "struggled to even understand the basic definition" of DFS. U.S. Rep. Markwayne Mullin (R-Okla.) "asked a witness about the existence of a regulatory body for daily fantasy, despite that lack of oversight being the very reason for the hearing" (ORANGE COUNTY REGISTER, 5/12).
