Vermont Senate Says Yes to DFS

8 years ago
U.S. Senate Says Yes to DFS
17:20
04 Mar

2015 may have been the toughest year yet for Daily Fantasy Sports (DFS) with ‘scandals’, investigations, calls for banning, and many other difficulties besetting the relative newcomer to the gambling world. However, the beginning of 2016 has already seen a more mixed, if not entirely positive, reception to the hugely-popular industry.


Senate lawmakers in Vermont this week voted 19 to 6 to approve a bill legalising and regulating DFS in the state, a move which Republican Senator Kevin Mullin, described as “an attempt to update Vermont’s 18th-century laws for the 21st century.”

It puts Vermonters in a very bad situation when the attorney general rules, based on a 1797 statute , that it’s a crime, and then says in the next breath he would not prosecute any of the tens of thousands of Vermonters who do it,” said Mullin, adding, “Clearly, if we’re going to have laws, we should enforce them, and if we’re not going to enforce them, they shouldn’t be laws.”

Naturally, not everyone agrees. Democrat Senator Jeanette White, voted against the Bill, saying:

I know there’s a continuum where ‘this is gambling’ and ‘this is skill’,” she said, “and I’m not convinced it’s on the right end of the continuum for me. I think it might be gambling. I suspect there might be more chance than skill.”


It is this gambling versus skill conundrum which has split the political spectrum when it comes to DFS legalisation and regulation, and which saw the industry undergoing intense scrutiny last year. Both DraftKings and FanDuel were in court following New York Attorney General, Eric Schneiderman’s ‘cease-and-desist’ letters to the DFS giants’ which stated that their products “violated anti-gambling laws in the state.”

Daily Fantasy Sports operators in Nevada were also told late last year that they must ‘obtain a gambling licence’ when the state’s Gaming Control Board declared that DFS “constitutes gambling under Nevada law.” The two largest DFS sites, DraftKings and FanDuel, both said they would “cease operations in Nevada” as a result of the decision."

The situation truly exploded after an employee of DraftKings allegedly used sensitive information to win $350,000 on the rival FanDuel site back in autumn – with the shockwaves continuing to reverberate.

Back in the here-and-now, Vermont’s decision is a welcome respite for DFS, with Senator Mullin stating:

Based on the testimony we heard, we believe it should be legal under certain conditions that protect the players, that protect them from being unfairly beaten in this game of skill by people who have insider information.”


However, this week has also seen the state of Georgia offer an informal conclusion that DFS constitutes ‘illegal gambling’, according to a letter from the office of the Georgia State Attorney that made its way into the hands of the Atlanta-Journal Constitution.

The letter, apparently sent from Wright Banks Jr., a deputy AG in Georgia, to the Georgia Lottery, sees Banks dismiss the ‘skill factor’ and the ‘actual contestant on a game of skill’ factors which DFS operators have argued in favour of in many other states.

Since the UIGEA decision back in 2006, DFS – unlike poker - has been designated as a game of skill, rather than chance, and until recently has avoided the regulation and outright banning which has stricken online poker in the USA.

In his letter to the Georgia Lottery corporation, Bank’s states that:

In daily fantasy sports, a participant whose purported skill level has not changed from one game to the next is just as likely to win one tournament, then lose the next tournament due to the performance of players outside of the participant’s control.”

He also writes about the ‘actual contestant’ clause, stating that:

The purpose of the exclusion is to allow athletes competing in the sporting events to be rewarded for their efforts, not for people to receive compensation for betting on the outcome of those events or the performance of a particular athlete…”


Although Bank’s describes his views as ‘informal advice’, it is only the latest blow for DFS operators in Georgia. Previously, in October of last year, the state Lottery had contacted both DraftKings and FanDuel, enquiring as to their legal arguments for operating in the state.

This was soon followed by the Georgia AG Sam Olens announcing that his office would be investigating the DFS industry.

This week’s letter from Banks brought a response from the DFS operators, with DraftKings lawyer Randy Mastro stating:

We are disappointed that the Georgia Lottery Corporation is seeking to bar Georgia citizens from continuing to enjoy the fantasy sports they love.”

He continued:

There is no legal or other basis for depriving Georgians of this popular recreational activity. DFS is a legitimate business activity that has operated openly and permissibly in Georgia for years,” adding that, ”It is the citizens of Georgia, through their elected representatives, who should decide whether they can continue to enjoy fantasy sports.”

In a plea to their DFS fan-base in the state, he finished:

DraftKings will therefore support legislation that regulates fantasy sports with thoughtful and appropriate consumer protections, and we urge Georgians to tell their elected representatives that they want to be able to continue to enjoy fantasy sports.“


Despite the ‘informality’ of the negative approach to the DFS issue of Banks', there was widespread dismay at its timing, with Bill ( S352) being “dropped to the bottom of the Senate calendar” according to the AJC, who then later reported that the Senate “decided not to take up a bill.”

This effectively means that a DFS Bill in Georgia is dead for the time being, and can be added to the list of many other states who have recently been attempting to push regulatory bills through their state Senates.

An Associated Press report published in the Washington Times this week claims that:

This year’s tally of 30 states with pending bills is up from roughly 16 states last year and two in 2014, according to Gambling Compliance Research Services, which has been tracking the legislation.”

The states, and the bills involved, vary in their detail (e.g. California and Maryland’s consideration of a minimum age of 21, as opposed to 14 states looking at 18 years minimum)– but the majority are industry-backed regulatory bills, seeking to combine legalization with tax-raising powers – thus offering the state’s involved good financial reasons to advance the legislation.


In California, Republican Senator Adam Gray explained the reasoning behind his proposed bill, stating that:

We feel strongly that there ought to be some revenues to help offset any negative consequences. There are legitimate concerns that gambling and other gaming activities create significant personal challenges for people.”

There are some who feel that the proposals in general fall short of protecting the more vulnerable consumer. “They’re absolutely inadequate,” claimed Keith Whyte to the Washington Post. The head of the National Council on Problem Gambling added:

Regulating fantasy sports without decent minimum standards will exacerbate gambling addiction problems.”

So, overall, 2016 seems set to be a very busy and highly-clarifying year if the early weeks are anything to go by and DFS operators will be hoping that the mass of time and money spent on lobbying will bear fruit.


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Andrew from Edinburgh, Scotland, is a professional journalist, international-titled chess master, and avid poker player.Read more

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