Bill still needs to be passed by both houses of the State Legislature and signed by Governor Andrew M. Cuomo

Deal reached to legalize daily fantasy sports in New York

2016-06-09
Reading time 1:59 min
The chairman of the State Senate’s gambling committee said on Tuesday that legislative leaders in Albany had come to an agreement to legalize daily fantasy sports, potentially calming a fractious legal dispute and setting the stage for even wider acceptance of the popular online games.

Senator John J. Bonacic, who heads the Committee on Racing, Gaming and Wagering, said late Tuesday that “we have an agreed-upon bill,” though it would still need to be passed by both houses of the State Legislature and signed by Gov. Andrew M. Cuomo, a Democrat, whose office said negotiations were continuing.

Under the parameters of the deal outlined by Bonacic, companies like FanDuel and DraftKings would pay a $150,000 fee to operate in New York, or 1.5 percent of the previous year’s revenues, and turn over 15 percent of revenues to the state after prizes were awarded to players.

The games — in which players create imaginary teams using players in real sports — would be classified as games of skill, not chance, an important legal distinction under a 2006 federal law governing online wagering.

“It’s not gambling,” Bonacic said. The deal could mark a détente in a contentious battle that began last fall when the New York State attorney general, Eric T. Schneiderman, ordered DraftKings and FanDuel, the two biggest companies in the industry, to stop taking bets in the state, saying it was illegal gambling.

The action by Schneiderman, a Democrat, was seen as a forceful rebuke of an industry that had flooded the airwaves with advertisements about fantasy sports, touting the fun and the potential for quick, lucrative wins. In recent months, other states have also acted to regulate the games, or deemed them to be illegal.

But in a precursor to a deal in Albany, Schneiderman brokered agreements in March in which DraftKings and FanDuel agreed to stop taking bets from New York residents but included a deadline of June 30 for lawmakers to legalize the games. Matt Mittenthal, a spokesman for the attorney general, said that Mr. Schneiderman had made it clear that “daily fantasy sports is illegal under current law.”

“However,” Mittenthal added, “it’s up to the Legislature to craft or change those laws.” And on Tuesday, that legalization seemed to be within reach. Bonacic, a Hudson Valley Republican, said the deal would generate $3.5 million to $5 million a year for the state.

Marc La Vorgna, a spokesman for Fantasy Sports for All, an industry advocacy group, said companies were “extremely appreciative of the work being done in the Legislature” in support of “the newest national pastime.”

Bonacic said that Cuomo’s office still needed to weigh in with “technical amendments” to the bill. But he, too, seemed hopeful that the legalization of daily fantasy sports would soon be a reality for their fans.

“They love the game,” Bonacic said. “So why would the State of New York not give them the opportunity to continue to play?”

 

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