Draft Kings and Fan Duel both hope you do. The NFL is when both Daily Fantasy Sports companies, who happen to control 95% of the DFS action in the United States, gear up for their busiest season. Whether it is considered gambling or skill-based, daily fantasy sports and football together are extremely popular, to the point that most TV & radio sports stations include scheduled segments for each week’s analysis and picks.
Not every state where DraftKings or FanDuel operate has expressly said daily fantasy sports contests are legal, and not every state where they’ve chosen not to operate has said it is illegal. In states where they don’t take paid entries, the companies still allow free entries (contests with no monetary prize), but that doesn’t interest many users.
In New England, all six states allow both Boston-based Draft Kings and New York-based FanDuel to operate. And recently, daily fantasy sports became fully legal in the state of New York. An expensive process in the NY state legislature turned out positive for the two DFS giants. Now both will be back online in time for the new NFL season, their most lucrative and crucial time of year.
Let’s look at DFS state by state in New England and how each state is approaching the legality of operation and regulation. Much of the following information is from LegalSportsReport.com, a website covering global DAILY FANTASY SPORTS & SPORTS BETTING SITES INDUSTRY, edited by Dustin Gouker:
A bill to give the authority to regulate the DFS industry to the Commissioner of Consumer Protection was introduced in February. The effort got a new wrinkle when it was added to a tax package for the state budget; the proposal would tax entry fees — not revenue. The effort died after Attorney General George Jepsen said that the bill would jeopardize state revenue coming from tribal gaming. The legislature is now adjourned.
In February, Rhode Island’s attorney general offered an opinion that daily fantasy sports is legal in the state while calling on the legislature to regulate the industry. However, the Rhode Island Lottery is now joining the legal debate over online fantasy sports, saying bills that would regulate the sites could prove to be unconstitutional.
Massachusetts is in many ways the epicenter of the DFS question, thanks in part to the fact that DraftKings is headquartered in Boston. That was confirmed when attorney general Maura Healey laid out regulations that will govern the DFS industry from a consumer protection standpoint, which she finalized in March. It seems unlikely that Healey’s regulations will entirely stop a legislative effort, as key lawmakers have expressed interest in licensing and taxing DFS operators, things that Healey’s regulations do not do.
As a state not mentioned much on NETimeGambling due to its opposition to gambling, continued down that path when an official in the attorney general’s office said publicly that DFS amounts to illegal gambling in the state. Just before that, a regulatory bill was introduced. That bill passed the Senate but was not passed before the legislature adjourned. It would seem that DFS in Vermont is teetering toward not operating in Vermont if the state follows previous policies.
The Granite State has had a history the past ten years of on-again, off-again casino interest. DFS operators have apparantly pulled out of New Hampshire, as well as Florida, Texas & Virginia, but no all for the same reasons. But according to RYAN RODENBERG’S article Daily fantasy sports state-by-state tracker, New Hampshire follows a “predominance test” in which the relative levels of skill and chance are measured to determine if the contest is permissible. No DFS legislative bill appears pending.
According to a legal opinion letter released in the New York litigation, gambling in Maine requires a “bet or wager.” No legislative bill about fantasy sports appears pending. However, all, or almost all, DFS operators are active in the state.
The future seems to show gaining support in some areas, while major states like Nevada and New Jersey continue to categorize DFS as gambling, which both DraftKings & FanDuel vehemently deny. It seems the federal government is leaving it up to each state to decide what to do with fantasy sports.
To improve it’s image and stand on skill-based gaming (see our previous post Daily Fantasy Sports – Where did It Come From? Where Is It Going? ) DFS services have implemented changes to improve the fairness and transparency of their contests, including entry limits, banning off-site scripts, identifying veteran-level players, allowing users to block players they do not wish to compete against, and adding beginner-level contests intended for new users.
While we ramp up for the NFL season, NETG will continue to look at DFS. Tomorrow, we borrow suggestions by New England’s own Dan Podheiser.
Get those picks ready. The NFL “Show” is about to start.