HomePublicationsNewsletter ArchiveNewslettersVolume 22MICHIGAN GAMING CONTROL BOARD REQUESTS DAILY FANTASY REPORT

At the January 12, 2016 Michigan Gaming Control Board (“MGCB”) public meeting, Chairman Robert Anthony requested that MGCB staff complete a review of the current status of the daily fantasy sports industry. Executive Director Richard Kalm responded to the request by stating that he will  work with MGCB staff to assemble a report on the industry and expects to present the findings by the March or May meeting.

Chairman Anthony noted that he is interested in gaining a better insight into the state of the industry, its impact on the state, as well as to the role that the agency has with respect to the emerging industry. Director Kalm stated that he would also include details on the impacts to the Detroit and tribal casinos and the status of legislation to address the industry.

Jurisdictions across the United States continue to consider whether and how the daily fantasy sports industry should be regulated. Public officials in some jurisdictions, such as Nevada, New York, and Texas, have claimed that the operations constitute wagering activity that either must be licensed or is illegal under current state laws. Others, such as Massachusetts and Indiana, have sought to clarify the operations as legal under existing law and institute regulations for consumer protection purposes.

Below is an overview of recent developments in key jurisdictions:

New York

On December 31, 2015 the New York Attorney General filed an amended complaint in the ongoing litigation alleging that Draft Kings and FanDuel are conducting illegal gambling operations. The amended complaint adds claims seeking to require the operators to pay restitution to players and to pay a $5,000 civil penalty for  each violation of the state’s business laws.

On January 11, 2016, Draft Kings and FanDuel were successful in an interlocutory appeal and will be able to maintain operations in the state during the litigation. An answer to the amended complaint has not yet been filed and it is expected that oral arguments will be heard sometime in the spring.

Indiana

On January 2016, two Indiana legislators issued a press release through the Indiana Legislators Republican Caucus inviting FanDuel (a NY-based company) to relocate to Indiana. Legislation was also introduced in both chambers (HB 1168 and SB 339) that would clarify that daily fantasy sports are not considered gambling under existing Indiana law and would create a regulatory division within the Indiana Horse Racing Commission to regulate operations. The legislation has been referred to committee in each respective chamber.

For more information on the legislation, please see the Volume 22, Issue 2 of The Michigan Gaming Newsletter.

Texas

On January 19, 2016, the Texas Attorney General’s office released an advisory opinion to the Texas House of Representatives stating that “a court would likely determine that participation in daily fantasy sports leagues is illegal gambling under section 47.02 of the Penal Code.” The opinion, however, distinguishes between daily fantasy and season-long contests, finding that season-long contests are also likely illegal but that participants may fit within an exception to the law allowing for private games.

A copy of the opinion is available via the Texas Attorney General’s website, here.

 

Massachusetts

On January 12, 2016, the Massachusetts Attorney General held a public hearing on proposed regulations to regulate daily fantasy sports under the state’s consumer protection laws. Final regulations are expected to be released within the next few months. In addition, the MA Gaming Commission released a white paper on the topic with the goal of providing insight to the legislature and other policy makers on the topic.

For more information on the draft regulations, please see Volume 21, Issue 38 of The Michigan Gaming Newsletter, here. A copy of the Massachusetts Gaming Commission white paper is available through the Commission’s website, here.

 

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