SBD/June 20, 2016/Sports in Society

New York State Legislature Approves Bill To Legalize, Regulate Daily Fantasy Sports

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FanDuel and DraftKings in March suspended their New York operations
The New York state legislature on Friday approved a bill to legalize and regulate daily fantasy sports, and if Gov. Andrew Cuomo signs the measure into law, it "would both tax companies with an entry fee [15% of gross revenue per year plus up to $50,000 more] and set some important baselines for conduct," according to Jon Fingas of ENGADGET. The bill would "ban any contests based on school sports or horse racing, and would identify both 'highly experienced' players (such as employees) as well as the accurate odds of winning." Other elements of the would-be law "would prevent free games from advertising paid games in mid-play, guarantee a proper introduction to newcomers, protect your funds and prevent access by anyone under 18." It is not guaranteed that Cuomo "will approve the deal, but there's a lot of pressure to make it happen" (ENGADGET.com, 6/18). In Albany, Matthew Hamilton noted it "remains to be seen" what Cuomo does with the bill. State Sen. John Bonacic said that there "was a three-way agreement that includes the governor on the bill" (Albany TIMES UNION, 6/18).

WINNING THE BATTLE: In N.Y., McKinley & Drape noted the final legislation "included proposed modifications" from Cuomo's staff, "suggesting at least some degree of support." New York AG Eric Schneiderman was "neutral on the Legislature’s action on Saturday, calling it 'a law that it will be my job to enforce and defend,' but he added that his office would continue to pursue claims against DraftKings and FanDuel" (N.Y. TIMES, 6/19). SI.com's Michael McCann noted although DFS "may soon become lawful in New York," Schneiderman will "continue to pursue ancillary claims 'that DraftKings and FanDuel previously engaged in false advertising and consumer fraud'" (SI.com, 6/18). In Albany, Rick Karlin noted one of the "main objections came" from western New York Assemblyman Andy Goodell, who "frequently probes and interrogates bill sponsors on their legislation." Goodell "questioned how the legislature can frame DFS as a game of skill." Goodell is a cousin of NFL Commissioner Roger Goodell (Albany TIMES UNION, 6/18).

BACK ON TRACK: DraftKings CEO Jason Robins said a merger with FanDuel is a "very interesting idea." Robins: "I don’t really have much more insight into how likely or not likely that would be. I certainly haven’t changed my view on how interesting it is." Robins said that New York "represents about 10% of his company’s revenues and is one of the nation's biggest states" for DFS. Robins: "It would have been very impactful to not be able to serve those fans this football season, and I’m just very happy that it looks like when the governor signs it into law, we’ll be able to do that." USA TODAY's Brent Schrotenboer noted Robins "hopes that New York now offers a model for states to follow in reverse -- making them legal through legislation that regulates them." Robins: "My hope is that (New York) really sets the tone for the rest of the nation" (USATODAY.com, 6/19). Robins said a "lot of eyes around the nation were on New York looking to see what the outcome would be" ("CBS This Morning," 6/20). Meanwhile, Robins said of a potential merger, "It’s an interesting idea that I’m very open to... It’s pretty clearly something that has potential to add shareholder value. It’s always possible that those conversations could become more accelerated and lead to things" (BOSTON GLOBE, 6/19).
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