DFS Legislation Makes Progress In Both Delaware And New Jersey

DFS Legislation Makes Progress In Both Delaware And New JerseyOn Friday, DE HB 249 passed the House in a 36-4 vote, and the Senate in a 13-7 vote. This time last year, the Delaware Department of Justice sent cease-and-desist letters to several DFS operators, including FanDuel, DraftKings, and Yahoo. At the time, the office of Attorney General Matt Denn made the assertion that daily fantasy sports were considered illegal per state law. It seems that the legislature came to a different legal opinion, making the passage of DE HB 249 a monumental triumph for states with sports betting.

Some of the key points featured in the bill are: http://legis.delaware.gov/json/BillDetail/GetHtmlEngrossment?engrossmentRevisionId=165

  • The Governor can either choose to enlist an existing agency for DFS oversight or, enact a new department of his choosing.
  • Various consumer protections must be implemented, such as keeping player funds separate from operation funds, safeguards for fair play, and online security measures.
  • Daily fantasy operators must “pay a fee equivalent to 15.5% or equivalent to highest rate adopted by another state, whichever is greater, of their interactive fantasy sports gross revenue generated within the state. In addition, registrants shall pay an annual licensing fee in the amount of $50,000.”
  • Players must be over the age of 18.

DE HB 249 awaits the signature of Governor John Carney to be made into law.

The New Jersey DFS Bill

The DFS industry also made strides in the state of New Jersey, despite the ongoing sports betting case. With the Christie II appeal recently being granted by the U.S. Supreme Court, lawmakers may have felt more secure about moving forward with DFS legislation while still battling their case.

Though the New Jersey Assembly voted to advance NJ A3532 with a 56-16 vote back in May, it was not until last Thursday that there was a 29-6 vote of approval in the Senate.

The NJ DFS bill looks similar to the legislation that has been passed in other states. Some of the specifics of NJ A3532 include: http://www.njleg.state.nj.us/2016/Bills/A4000/3532_U1.PDF

  • An “operations fee” equivalent to a tax of 10.5% of gross revenue must be paid by fantasy sports operators.
  • Regulatory oversight of DFS operations will be provided by Division of Consumer Affairs in the Department of Law and Public Safety.
  • Fantasy sports participants must be at least 18 years old.
  • Certain consumer protections such as third-party financial audits, segregation of player funds from operational funds, and the tools for players to restrict play must all be implemented.
  • Those found in violation of the requirements will be subjected to fines of anywhere from $25,000 to $200,000.

More About DFS In New Jersey

NJ A3532 is a Democratic-sponsored bill, with both the state Assembly and Senate being controlled by Democrats. The final signature needs to come from Governor Chris Christie, a Republican that in the past has been against regulating daily fantasy sports.

During the 2015 Presidential Debate, Christie was seemingly blindsided when asked a question about DFS regulation. He initially responded by stating how minuscule an issue like fantasy sports regulation seemed in comparison to issue of unemployment, national debt, and terrorism. In a later interview on The O’Reilly Factor, Gov. Christie clarified his position by stating the following:

"Who would have thought in a presidential debate they were going to ask about fantasy football? How crazy liberal do you have to be to believe the federal government should be regulating fantasy football?”

With the widespread support that the new DFS has received, it would be surprising if Christie opted to veto the bill.