California yesterday "became the first state to pass a bill regulating daily fantasy sports through a committee hearing," handing the industry "an important, preliminary victory in its fight to stay afloat in the crucial state," according to Ryan Kartje of the ORANGE COUNTY REGISTER. The California Committee on Governmental Operations passed committee Chair Adam Gray’s bill "with a landslide vote," as 17 committee members voted in favor and only one against. The bill will "now go to the appropriations committee for review." Gray, who introduced the bill in September, "added amendments to address problem gambling, fairness of DFS contests, segregation of DFS player funds and truth in DFS advertising, based upon the committee’s informational hearing last month." Kartje notes whether that framework is "thorough enough in the bill’s current form remains uncertain." Several of the committee’s members said that there was "significant work to be done on the bill, but still opted to pass it through committee" (ORANGE COUNTY REGISTER, 1/7). In L.A., Patrick McGreevy notes the bill marks a "step toward permitting, taxing and regulating" the DFS industry. The bill would allow DFS companies to operate in the state if they "obtain a license and pay an annual regulatory fee." Website operators "would have to undergo a background check, as well as pay taxes on their profits and report player winnings to the state," and those winnings "would then be taxed." Licensed operators "would be responsible for determining that players are eligible adults and that there is no fraud in the games" (L.A. TIMES, 1/7).
PILING ON: A WALL STREET JOURNAL editorial calls New York state Attorney General Eric Schneiderman's action against DFS companies “prosecutorial unsportsmanlike conduct” and states he “is piling on with new fraud charges in his blitz against fantasy sports sites DraftKings and FanDuel.” Neither the state legislature nor the state gaming commission “has defined fantasy sports as gambling, which makes the AG’s case a long shot." The editorial: "This may explain why Mr. Schneiderman late on New Year’s Eve amended his suit with charges of fraud and false advertising” (WALL STREET JOURNAL, 1/7).
