Earlier this month, the Pennsylvania Gaming Control Board released a report titled, “Fantasy Sports Report”, in which the board examined the feasibility of daily fantasy sports betting.
The topic has made headlines recently because of a groundbreaking House committee hearing on daily fantasy sports, headed by outspoken sports-betting proponent Rep. Frank Pallone.
The Contents of the “Fantasy Sports Report”
Before analyzing DFS as a gambling product in Pennsylvania, the PGCB worked its way through existing laws and information to explore whether DFS is currently legal.
The report discussed several instances in the past year in which the DFS industry was brought into question. That includes a September 2015 incident in which a DraftKings data leak prompted concerns about employee play.
The board concluded that federal and state gambling laws are not clear as to whether or not DFS is considered a game of chance as opposed to a skill game (the rule of thumb for deciding whether or not something like DFS can be classified as “sports betting”).
Lack of clarity with UIGEA, PASPA
Several pages later, the PGCB analyzed the Professional and Amateur Sports Protection Act (the federal ban of sports betting in most jurisdictions). It concluded there is no definitive answer to the question of whether DFS is, in fact, sports betting.
The board went on to say that the Unlawful Internet Gambling Enforcement Act of 2006 (which left legalization of online gambling to the gambling) left wiggle room for fantasy sports.
However, the board said, DFS was not popular at the time and the loophole was based on season-long fantasy sports.
The DFS link to online gambling
The industry is of particular interest to the PGCB because of recent proposed legislation that would legalize Pennsylvania online casinos and poker. The bill, HB 649, was tabled until recently after stalling in the House at the end of 2015.
The PGCB’s recent report also indicates that DFS may be rolled into HB 649. Online gaming legislation may make an appearance in the House this spring in the hopes the bill will pass and pour new revenue into Pennsylvania’s budget deficit.
Options for DFS Regulation
The board concluded its report by laying out three scenarios: Pennsylvania’s General Assembly prohibits DFS, does nothing about it or makes it legal.
In the case of legalization, the board noted that if the GA appointed the PGCB to oversee DFS, gaming would have to be run through casinos. However, if the GA appointed a different organization, that would not be the case.
The board also said DFS companies like DraftKings and FanDuel could partner wth the state’s casinos. That would make them subject to Pennsylvania’s regulations and keeping payments and fees in house, as opposed to letting the companies operate out-of-state.