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Regulations / Sports Law

Daily Fantasy Sports Open For Business In New York

The five leading companies in daily fantasy sports have been issued temporary permits to run daily fantasy sports contests in the state of New York.  Earlier this month Governor Cuomo signed a bill that legalizes daily fantasy sports providers but places them under regulation from the state.  The new law states that daily fantasy sports are mostly a game of skill.  The five sites allowed to operate daily fantasy sports in the state are DraftKings, FanDuel, Yahoo, FantasyDraft, and Draft.

From the commission:

The Commission has completed a legally required thorough review of the temporary permit applications from these five companies, ensuring required consumer protections, player safeguards and advertising restrictions are in place.

As the newly enacted law requires, the Commission regulates all aspects of interactive fantasy sports, including ensuring the operators put important consumer protections in place,” said Commission Executive Director Robert Williams. “While the Commission continues work on formal regulations for these games, these temporary permits get companies up and running in New York State while assuring resident players that safeguards are in place.

Each provider must pay an annual $50,000 fee and are taxed 15% on all revenue.

These permits to operate are temporary and will have to be re-issued when the New York State Gaming Commission establishes long-term regulations.

Ringside Analysis:

Daily fantasy sports has been one of the most important legal battles for the future of sports in recent memory.  Sports betting is against the law in every state outside of Nevada and daily fantasy sports is the closest thing to gambling that the rest of the forty-nine states can get to.  There’s a lot of evidence to show that daily fantasy sports are no different from gambling.  It appears that the lobbying efforts of the daily fantasy sports industry has really paid off.  Just a few months ago states were banning daily fantasy sports and now New York is making an exception for the industry.

The strongest influencer on a person’s interest in a sporting event is economical incentive.  Daily fantasy sports provides the economic incentive to people in a legal way that sports betting doesn’t.  While daily fantasy and sports betting are really different names for the same thing this legalization is a huge get for the combat sports industry.  With no solid schedule in place similar to that of the NFL or NBA a fantasy system over a long period of time isn’t feasible.  However, daily fantasy sports is perhaps perfect for increasing avidity in casual sports fans who are looking to bet on a fight the day of and the new avidity might result in buying a PPV program.

 

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