Super Bowl week was an extremely busy one on the sports betting and daily fantasy sports fronts.
Legislation was introduced at the state and federal level, while supporters of legalized sports betting used the big game to make their case.
DFS legislation update
Three more states introduced daily fantasy sports legislation over the past seven days: Alabama, New Jersey, and Texas.
Texas would represent the biggest victory for the DFS industry since New York legalized daily fantasy sports contests last year.
Texas is the second most populous state in the US with 27 million residents, and thanks to a negative attorney general opinion in 2016, it’s currently one of seven states where DFS’s legality is in question – nine other states consider DFS illegal. DraftKings is still operating in Texas (with pending litigation) whereas FanDuel has left the market.
New Jersey marks one of the few states that offer regulated online gambling and also have DFS legislative activity (people located within New Jersey can legally play at real-money NJ online casinos and NJ online poker sites)
The total number of states with active DFS bills now stands at 17:
- Alabama
- Connecticut
- Florida
- Georgia
- Hawaii
- Illinois
- Indiana
- Iowa
- Mississippi
- Missouri
- Montana
- Nebraska
- New Jersey
- New Hampshire
- Oregon
- Texas
- Washington
Legal Sports Report’s legislative tracker has up-to-the-minute updates on all DFS legislation.
The big topic of the week
Drowning out most of the daily fantasy sports legislative talk this week was the still unfolding situation at Fantasy Aces.
Players unable to access their accounts at struggling DFS site Fantasy Aces were waiting with bated breath for a deal that would consolidate Fantasy Aces with rival Fantasy Draft to be completed.
Unfortunately, the deal fell through on January 30, and Fantasy Aces declared bankruptcy on February 1, where it was revealed the site was using player funds to cover operational expenses, which meant players are unlikely to be paid.
The mismanagement at Fantasy Aces, and the inability for this mismanagement to be detected has led to a robust debate over regulations, and what types of safeguards the industry needs.
What you can confidently bet on happening is this topic getting a lot more play in statehouses from critics of the industry, which will stand in stark contrast to the DFS industry’s arguments for “light touch” regulations.
Sports betting legislation update
The number of states supporting sports betting legalization – passively or aggressively – remains at six, but there was a significant development on the sports betting front this week, as New Jersey Congressmen Frank Pallone and Frank LoBiondo reintroduced federal legislation to reopen the 1992 Professional and Amateur Sports Protection Act, PASPA.
“Sports-betting is already happening across our state and across the country, but instead of being appropriately overseen and raising needed revenue for our casinos, racetracks, businesses, and the state, these bets are placed through illegal enterprises,” Congressman Pallone said in a press release.
The legislation would not only exempt New Jersey from PASPA, it would also open the door for other states to legalize sports betting by creating a four-year window where states could apply for a PASPA exemption.
The legislation comes on the heels of the AGA’s (American Gaming Association) annual release of the estimated betting on the Super Bowl, which the AGA puts at $4.7 billion this year, with 97 percent of that money being bet illegally.
The list of states that have introduced legislation to expressly legalize sports betting or explore the possibilities of legalized sports betting are:
- Hawaii
- Michigan
- New Jersey
- New York
- Pennsylvania
- South Carolina
