Pennsylvania DFS regulation

Pennsylvania May Make Push To Regulate Daily Fantasy Sports

Regulation of daily fantasy sports may be considered in the Pennsylvania legislature alongside online poker and gambling this spring.

The new daily fantasy sports effort

While legalization and regulation of online poker and casino games has been a hot topic for more than a year, the same cannot be said of DFS in the state legislature.

That could be about to change, however. State Sen. Anthony Williams is circulating a co-sponsor memorandum seeking support for a bill that would regulate DFS.

Here’s the memo, in its entirety:

In the near future, I will be introducing legislation to permit and regulate the operation of fantasy sports games in Pennsylvania.

Anyone who watched a professional football game last season is aware of the leading daily fantasy sports betting websites DraftKings and Fan Duel. These and other websites operate legally under the federal Unlawful Internet Gambling Enforcement Act of 2006, due to classification as games of skill rather than games of chance. Nevertheless, many states across the country have restricted companies from operating within their jurisdictions, notably New York State late last year. Even in states where fantasy sports betting are completely legal, concerns remain over consumer protections against potentially deceptive advertising practices. While Pennsylvania does not currently restrict daily fantasy sports betting sites, there are no formal guidelines in place which would allow companies to operate legally while ensuring adequate consumer protections.

My legislation would amend Title 4 (Amusements) to formally allow daily fantasy sports betting as a game of skill. Operators of websites would be required to register with the PA Gaming Control Board and to remit taxes based on gross revenues earned from play in the state. Following the lead of Virginia, this industry-supported legislation would also protect players over 18 from engaging in problem gambling, protect their personal information, and prohibit employees of fantasy gaming companies from profiting off of “insider information.”

‘Betting’ and a game of skill?

Williams’ effort has some problems in its wording, at least before it becomes an actual piece of legislation. It calls operators like DraftKings and FanDuel “daily fantasy sports betting sites” while also designating it as a game of skill.

Those two things in tandem seem difficult to square. That, and the sports betting” phrase would seem to lend itself to running afoul of the Professional and Amateur Sports Protection Act that prohibits sports wagering almost everywhere in the U.S.

The DFS industry will be in favor of the “game of skill” designation, but some of the rest of the language will not be popular:

  • Being under the purview of the state gaming commission.
  • A tax on gross revenue.
  • The use of the phrase “insider information” in relation to employees.

And while the memo says it is “industry-supported,” that’s not entirely clear until the bill is written, as it does not appear to be the same bill advanced by industry lobbyists.

In New Jersey, DraftKings and FanDuel opposed legislation because it did not expressly define DFS as a game of skill.

Past efforts on DFS in PA

Daily fantasy sports has been on the radar of the state for awhile, but no regulatory bills have been offered, so far. What has happened?

  • A bill introduced last spring would have allowed casinos to offer paid-entry fantasy sports contests. However, that legislation never gained any traction. Later, there was chatter that it would be amended to regulate DFS, but that never happened.
  • A hearing was held in November on DFS; however lawmakers made it clear that they were in no rush to consider any new legislation regarding fantasy sports.
  • Last month, the state enacted a law that has the PGCB complete a study to look at the potential of DFS as a “gambling product.”