Daily Fantasy Sports took a giant step toward becoming legalized in New York last Saturday when the Senate approved a bill stating they are not considered gambling under state law. All it will take now is for Gov. Andrew Cuomo to sign the bill within the next 10 days for it to become a law, and that is expected to take place sometime this week. Cuomo had been working with lawmakers on language to ensure it passed.
Passage of the bill would allow DFS contests to return to New York as early as July 1, well before the start of football season, when companies such as industry leaders DraftKings and FanDuel do most of their business. In addition, there have reportedly been talks that the two giants could pool their resources together and merge to form the biggest DFS company in the world. The legal costs have been mounting for each individually, and a merger could help them continue to fight for legalization together.
The New York victory is huge for DFS across the country, setting a precedent that many other states could now choose to follow. DraftKings and FanDuel had agreed to cease operations in New York back in March following a settlement with Attorney General Eric Schneiderman until the Senate could vote on the bill. After Cuomo signs it into law, fantasy players ages 18 years and older will again be able to participate in a variety of different contests, although high school and college games will be prohibited. Previously, college football fantasy contests were available to play last season.
Under the new law, those prohibited from playing DFS in New York would include employees of the operators along with athletes and officials who could have an impact on the outcome. Operators like DraftKings and FanDuel need to be licensed within the state and will be subject to 15-percent tax on gross revenue generated on the contests. That tax money would then go to the lottery and help fund educational programs.
The New York Gaming Association still strongly opposes DFS and lobbied against the bill’s passage before it was ultimately passed. The organization stands by its belief that DFS should be considered illegal gambling, although more than 100,000 of the estimated three million players fought for their right to participate through emails and phone calls to legislators. Those players paid $268.3 million in entry fees last year, according to gaming research firm Eilers & Krejcik, and the potential tax revenue that will be generated in the future is viewed as a major victory as well by supporters.
Last October, Nevada had deemed DFS as sports gambling and illegal without a gaming license in the state, prompting DraftKings and FanDuel to pull out there. Other states nationwide later adopted Nevada’s ruling while some chose to go a different direction like New York and have since approved DFS based on regulation. Earlier this month, Nevada recommended a gaming license for a new company called U.S. Fantasy to run legal games within the state with other casinos likely to follow suit.