Daily fantasy sports (DFS) has been on the back foot since last year. What was a billion-dollar industry suddenly went into a state of siege as New York State Attorney General Eric Schneiderman shut down their operation in the state under the reasoning it was gambling. Other states quickly followed and revenues went down ever since. This week sees a bit of good news, though—Pennsylvania seems to be on the verge of legalizing DFS with the introduction of a new bill.
Pennsylvania State Rep. George Dunbar filed HB 2150 last Thursday. Called the Fantasy Sports Consumer Protection Act, it is the updated version of what he presented to the Pennsylvania House of Representatives last year.
The original bill was focused on allowing only offline casinos the ability to offer DFS contests. This new bill goes a step further by allowing online and offline DFS contests. It is currently undergoing a review by the House committee. The bill is then scheduled to go under a vote this June 15.
The main component of the bill is its professed aim of protecting the consumers. It has several clauses that focus on ensuring that no one is going to be taken advantage of in DFS contests.
First, no minors are allowed to play, as well as any employees of the organizers. Next, complete confidentiality is required when it comes to a player’s personal and financial information. The operators are also asked to keep player fund and their operating funds separate.
Finally, the law states that self-exclusion is enforceable upon request and that DFS employees are trained to recognize addiction to gambling and how to properly respond to it. With these protections in place, it is hoped that many naysayers would come to support the bill.
An additional part of the bill is how the state will handle DFS. This involves the licensing and regulation process. The bill has the Pennsylvania Gaming Control Board controlling the operation of DFS. A new DFS license would cost either $50,000 or 7.5 percent of the operator’s revenue, depending on which is less.
Then renewal of the license, on the other hand, will only cost $5,000, while an additional five-percent tax will be placed on operators in the state. There will be regular third-party audits so that no cheating will occur, with $1.75 million allocated to ensuring appropriate regulation in the state.
The bill is thorough and can prove to be the best advocate for DFS in the state. With its approval, DFS operators can once again offer contests both offline and online. It can also be the tipping point that pushes for the recent Pennsylvania gambling bill to get accepted after the bill was voted down last month. It, however, came up for reconsideration immediately after the nay vote.
With DFS being considered gambling, HB 2150 can be the wedge needed for full approval of the larger gambling bill. DFS enthusiasts and gambling operators will be waiting expectantly for the June 15 vote to see what happens.
Meanwhile, once the state moves to legalize DFS, both real-money and Bitcoin daily fantasy sports sites can smoothly operate within the state and hold regular contests for qualified players. Daily fantasy sports in Pennsylvania could be the window for the business to regain momentum in terms of revenue.