DFS Bill Gains Ground in New York With State Senate Voting 45-17 in Approval

Early Saturday morning, the New York state senate passed a bill that permits a legalized regime for Daily Fantasy Sports (DFS) considering them a game of skill and not chance. The bill was approved by a vote of 45 to 17 and will become a law, once signed by Governor Andrew Cuomo, with sources reporting that it was almost a given. A few days ago, the bill was also approved by the New York Assembly.

The bill has been in the news for circumventing existing gambling laws and had New York Attorney General Eric Schneiderman up in arms to veto it. Schneiderman had even issued a ‘cease and desist’ letter to fantasy sports titans DraftKings and FanDuel in November.

The two biggies of the DFS industry had been aggressively lobbying for the bill, which has borne fruit now. In March this year, both DraftKings and FanDuel had mutually agreed to cease operations in New York until the bill was made a law. The industry had flourished in a gray market and a slew of advertising had brought it to the notice of opposing authorities, such as Schneiderman, who filed legal notices against the two companies for false advertising and consumer fraud.

If made law, the bill will see a regulated DFS market, with restrictions, such as banning children from playing. The market would be controlled by the New York State Gaming Commission, which also regulates casinos in the state. Taxes would be 15% of gross revenue, which is far less than the tax rate for the state’s casinos.

The move has met a varied response with many decrying DFS as mere gambling, while others welcomed it. Some of the fiercest opposition came from the state’s casino industry which claimed that the bill gave DFS an unfair advantage and argued that these sites should be allowed only in partnership with existing casinos.

Sen. John Bonacic, who had sponsored the bill happily declared that, “Football season is around the corner we’re going to make a lot of football fans very happy.”

Nigel Eccles FanDuel CEO and co-founder issued a press release saying that thousands of DFS fans had rallied and emailed the legislators to get the bill approved, “The bill represents a thoughtful legislative process, where bipartisanship and willingness to compromise carried the day, and we are extremely hopeful Governor Cuomo will sign this bill.”

Jason Robins DraftKings Chief Executive made it clear that New York was crucial in terms of how the bill fared in other states. He added, “Everybody was looking to see how this ended up, and to see it get to a great result to this will send a message to policy makers around the country how to address a new and exciting industry.”

According to the Wall Street Journal, it was reported that FanDuel and DraftKings were in talks to merge, though no official statement has been given out yet.

The Governor has 10 days to pass the bill and once approved, New York will be the seventh American state to approve of a regulated DFS market, after Indiana, Virginia Tennessee, Mississippi, Missouri and Colorado.