Fantasy Football Gambling
SB 2109 by *Johnson,(HB 2105) by *Marsh
AMENDMENT #2 rewrites this bill and establishes licensing requirements for fantasy sports operators.
SB2109-HB2105 is now composed of these:
Amendment # 2 that is 20 pages long.
Amendment # 4 that is a half page.
- Officials with the Tennessee Education Lottery were recently asked by legislators if they believed legalization of Daily Fantasy Sports would have a negative impact on lottery operations in Tennessee.Citing the inherent convenience of DFS gaming online as well as the ease of using debit and credit cards as envisioned in the bill, officials feared that negative impacts could occur.Currently, lottery tickets are available POS only, and must be paid for in cash.
- It is important to remember that Tennessee Promise relies on the interest on adequate Lottery reserves to fund the program.
- Only one state – Virginia -- has made DFS legal, having passed the bill last week. Tennessee could become only the second state to do so with passage of this bill.
- Believing that DFS may well meet the definition of gaming, officials are also concerned about the lack of controls in the bill – particularly the lack of independent background check requirements.According to the bill, applicants must only “disclose” if they are convicted felons.In October 2015, employees of both Fan Duel and Draft Kings were found to be illegally using insider information on games, then using that to earn money on the others’ sites.
- Tennessee lawmakers should slow down and move with deliberation as they consider whether to make playing “Daily Fantasy Sports” legal in the state and, particularly, to not make game subject to gaming laws. A decision to legalize online sports betting does not need to be made in the next two weeks.
- Even industry officials admit that they are openly targeting players between the ages of 18-30 . . . a youthful population that should be considered and protected.
Facts and Other Point to Consider:
- The legislation in question, SB 2109 by Jackson and HB 2105 by Marsh, was brought by Fan Duel – one of the two companies controlling 90% of DFS activity.
- The original bill as filed in January sought the creation of an advisory board to review “online simulated competitions, including, but not limited to, online fantasy football, and recommend any necessary statutory revisions to the consumer protection laws that should be made to protect consumers when paying to participate in an online simulated competition.”That is substantially different fromthe 20-page amendment sponsors plan to attach to the bill this week that creates a framework for making legal online daily fantasy sports wagering.
- Other states finding that daily fantasy sports constituted gaming or were otherwise illegal: New York,
- While DFS claims that their game is one of skill and “entertainment”, AGs in the above states found that “even if an element of skill is involved, if a material element of chance is involved, it’s gambling”.
- While the Tennessee Education Lottery is classified as gaming, it is highly regulated.It currently does not operate online and cannot accept even debit cards at the POS.In contrast, Daily Fantasy Sports typically accepts both debit and credit cards, and is 100% online – meaning it can be played from home and without tangible controls over who is actually playing the game.
- As an industry, DFS has become a behemoth – with annual sales in excess of $3 billion.
- DFS and FD regular payment processors in prior years, CitiGroup and Vantiv have both pulled out of servicing Fan Duel and Draft Kings as of February 2016, citing the unfavorable opinions that have been issued by state attorneys general in recent months.
- NFL commission Roger Goodell, while an investor in daily fantasy sports, is now reviewing that investment, stating that he sees a big difference between traditional season-long fantasy and the current daily fantasy games in question, particularly since many now only require a play to answer one simple “yes or no” question to be a “skilled” player.