Legal Landscape of DFS

Written By PlayPicks Staff on September 11, 2014 - Last Updated on June 27, 2018
Legal Landscape

 

With DFS becoming so popular this year, it is possible that it’s overall future hinges on a few noteworthy legal news stories. Ask Ray Rice about what happens when the national news media gets a hold of something if you want to see impact news. The questions that need to be asked are, what is the future of DFS and what is the current legal landscape that we are heading into?

 

The Outlook

 

From where I am sitting, the future looks bright. DraftKings has strengthened their position by swallowing the competitionDraftKings and FanDuel both got a large capital infusion just a few weeks ago. With its new popularity, it is possible to see it under the microscope. ESPN’s OTL recently did a segment about daily fantasy sports in their show and I thought they handled it well. They did not draw lines in the sand or jump to one side of the argument or the other. Except they did jump to one side. Now SportsCenter is brought to you by DraftKings as a sponsor which is great for the industry. There is one more major site in the pocket. When you look at the NFL and MLB, what do we see? They are both into it too as MLB even hosted a Freeroll on DraftKings. The NFL has declined to comment on DFS and has remained almost neutral on the subject. But they were not neutral on it in 2006 when the UIGEA was drafted and sent through congress. The NFL hired lobbyists to make the trip to Washington, and make sure that fantasy sports were exempt from the new laws being that the NFL itself pushed to pass. It worked, as we all know, and we all can still enjoy fantasy sports for money in almost every state.

 

Knowing all of this I think it is important to know some of the details that go into fantasy sports based legislation. In the national political scene lobbying, monetary donation, and endorsements are the name of the game. The UIGEA (which effectively allowed the FBI to storm on the online poker websites) was attached to a bill “hastily,” as The Economist points out would surely pass.

 

Exceptions were also made to the bill so that States could regulate or even make these kind of fantasy games illegal. There are currently 5 states that don’t allow daily fantasy sports and there are big names in Vegas that want to see this spread to all 50. Senator Bill Frist penned the bill based on his conservative values and his worry that internet gambling would create a “state of moral decay.” When the Robert’s court decided that unlimited money could be spent on elections, it opened the flood gates politically, and now it’s not a congressman introducing this legislation because of their values, it’s the men who donate thousands and sometimes millions of dollars to these campaigns. Some have focused on the state level like Sheldon Adelson, who has almost personally bankrolled Gov. Rick Scott (R) of Florida, who in turn has told his party to get a bill introduced to outlaw cash prizes on online games.

 

Now a resurrection of the Wire Act introduced in March by Senator Lindsey Graham (who has received $41,200 from the Adelson owned Las Vegas Sands since 2009, which has topped out his individual contribution limit for this year already) has unleashed the Krakken of spending on both sides. The Las Vegas Sands lobby has spent almost $500,000 in the last quarter alone, almost edging out their entire 2008 record spending spree, on bills that would make games like daily fantasy illegal. The other side however is being able to spend as much to oppose these efforts. Caesars Entertainment has spent almost 2 million dollars in lobbying to keep online betting safe, mostly because it has online operations in states where it is legal. Churhill Downs, Boyd Gaming, and MGM Resorts have a combined $565,000 in on this fight so far this year, all in support of online wagering, in the hopes that the Wire Act is not resurrected.

 

With all of this being said if you have paid any attention to congress over the last few years almost NOTHING has gotten through congress due to partisan politics. Even if the new Wire Act bill makes it out of committee, most of the Democrats fall on the opposite of Sen. Graham’s new proposal, and have donations coming from the opposite side which is good news for the daily fantasy sports industry and us players who enjoy the skill aspect of it so much.

 

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