Daily fantasy sports regulation bill passes in California

7 January 2016

By Gary Trask

Daily fantasy sports was in the headlines again on Wednesday — but this time, for a change, the news was positive for operators.

California not only became the first state to pass a DFS regulation bill out of a committee hearing, but it did so in a landslide when the Internet Fantasy Sports Game Protection Act (AB 1437), which seeks to create a regulatory and licensing framework for DFS websites, was approved by the Assembly Governmental Organization Committee by a resounding 18-1 margin.

Assemblymember Adam C. Gray (D-Merced), Chair of the Assembly Governmental Organization Committee and the man who authored and first introduced the bill back in September, was quite pleased with the result of Wednesday's hearing in Sacramento.

"The near unanimous support of the committee today sends a strong signal that protections for consumers and children online are a top priority," said Gray. "We have a responsibility to put safeguards in place to ensure a fair and level playing field."

Of course, the bill has a long way to go before it becomes law. The next step is for it to be heard by the Assembly Committee on Appropriations and, as has happened in multiple other states, the case will be made by opponents that DFS operators such as DraftKings and FanDuel are offering what constitutes as "illegal gambling."

That was the discourse used by Assemblyman Marc Levine (D-San Rafael), Wednesday's lone dissident.

"This is gambling. There is no doubt about it," he said in his testimony. "Let's not fool ourselves. An entry fee is a wager. Cash prizes are gambling winnings. DFS companies are bookies. Playing these games is sports betting."

Gray, in a statement, was even keel regarding the legality of DFS.

"The legal question is one for our Attorney General and the courts," said Gray. "The fact remains that we have millions of constituents playing these games with zero assurance of state protections. This legislation will bring California’s laws into the 21st century and provide consumers with the safeguards they expect this Legislature to provide."

A sports betting and online gambling bill were also on the agenda for Wednesday's hearing but were pulled on Tuesday, much to the dismay of California Nation's Indian Gaming Association. The group made its objection clear when it released a statement saying Chairman Steve Stallings was "disappointed" Gray did not use the hearing to "take the next step in legalizing and regulating online poker in the state."

“The regulation of fantasy sports is well intended. However, the state needs to prove it can deal with one online game – I-Poker — before it takes on others," the statement read. "Practice makes perfect applies here. The exercise of debating and approving I-Poker will prove useful in addressing additional details that arise in the new proposals of introducing sports wagering and licensing and regulating DFS.”

Before Wednesday's meeting, Gray made several key amendments to the bill centering on problem gambling, segregation of player funds by DFS operators, accuracy in DFS advertising and safeguards regarding DFS contests.

"The amendments take into consideration what we have learned over the last four months and further strengthen the consumer protections in the bill," said Gray. "They add protections for DFS consumer accounts, limit advertising content and location, and further address the issue of problem gamers."

Daily fantasy sports regulation bill passes in California is republished from iGamingNews.com.