Arkansas Passes, Illinois Considers DFS
Arkansas recently became the 11th state—the first in 2017—to legalize daily fantasy sports as Governor Asa Hutchinson recently signed H 2250. The Arkansas Senate earlier approved the bill by a 25-5 vote, and the House approved the Senate version of the bill 85-0, after earlier passing the legislation 69-3.
The bill would tax DFS operators’ revenue at eight percent. It does not include regulation of the industry or consumer protections like laws enacted in other states but provides legal clarity in the state to DraftKings and FanDuel and other DFS operators in the state.
Meanwhile, Illinois state Rep. Michael Zalewski recently introduced a bill that he said would propose regulations to protect daily fantasy sports players. The measure would supersede an advisory opinion issued by state Attorney General Lisa Madigan in 2015 stating daily fantasy sports betting was illegal under Illinois gambling law. “I think daily fantasy sports continues to be operating in a regulatory vacuum. This has been going on for two or three years now where their sites have operated free and clear of regulatory laws or tax rates.”
Zalewski added, “There’s untapped tax revenue that would go in either schools or infrastructure or whatever the legislature deems appropriate, which we’re not taking advantage of right now. We’re in a state that’s $14 billion behind in paying its bills.” He said a House committee most likely will hear the bill after the General Assembly returns from Easter break.
Zalewski’s bill would restrict players to age 21 or older, prohibit daily fantasy sports company employees from playing and require an annual independent audit. But Illinois Gaming Board Legislative Liaison Caleb Melamed said even with protections, enforcement of DFS regulations would be difficult since players participate at home. “In a casino, we monitor everything. We have surveillance and a central computer system. This would be an outside computer system, probably located outside of Illinois,” he said.
However, Zalewski said, “I disagree with the gaming board on the difficulty of regulating this only because other states are doing it, and I just believe the Illinois Gaming Board is able to do the things that other states are able to figure out.”
Melamed also said allowing daily fantasy sports betting could have a negative impact on casinos or video gaming parlors. “This is going to have a tremendous impact on gaming. This is another step to making gaming more pervasive by putting it inside people’s households,” he said.
But Peter Schoenke, president at RotoWire, a Wisconsin-based company that provides information and statistics to fantasy sports participants, said, “Fantasy sports are not a competitor to traditional casino games. They’re just very different. Fantasy sports you play on your computer at home, you’re watching the game on Sundays. You’re not going to a brick-and-mortar building and playing. It’s just a totally different product.”
Marc La Vorgna, FanDuel and Draft Kings spokesman, said both companies support the legislation.
In Texas, the House Committee on Licensing and Administrative Procedures voted 6-1 to pass House Bill 1457, which would clarify and affirm the legality of fantasy sports in the state. Last year the state attorney general issued an opinion that DFS betting was illegal.
In 2016, Colorado, Kansas, Indiana, Maryland, Massachusetts, Mississippi, Missouri, New York, Tennessee and Virginia passed fantasy sports legislation. The Maryland attorney general and a lawsuit in New York cast some doubt on those DFS statutes.