Add one more state to the growing list in the daily fantasy sports regulation melee.
Currently, Colorado has no specific restrictions regarding fantasy sports and the state’s top lawmakers are concerned with the lack of oversight of DraftKings and FanDuel, as well as other fantasy sports sites. Subsequently, lawmakers in the state are preparing to join approximately 30 legislatures in capitols nationwide considering proposals to regulate, restrict or ban altogether fantasy sports leagues that offer games where players compete for cash prizes online by building rosters of real-life athletes. To date, league operators in at least eight states have either pulled out due to questions of legality or have been banned.
If a bipartisan bill introduced on Thursday, Colorado House Bill 1404 (pdf), is successful, a Colorado Office of Fantasy Sports would be created, according to The Denver Post. The regulating office would be responsible for drafting rules that would ensure that fantasy sports games are played fairly and not as a smokescreen for illegal gambling, and the Fantasy Trade Sports Association is on board with that. Peter Schoenke, who is the president and owner of Rotowire, an established fantasy sports website, as well as the chairman of the trade association, said regulating fantasy sports is generally something that the industry supports. According to Schoenke, market research indicates approximately 800,000 fantasy sports players call Colorado home, with the majority playing among friends or on free websites. Approximately 150,000 of those players participate in the daily fantasy sports leagues where an entry fee can result in a huge payout.
Under the bill, operators of the games would be subject to licensing and background checks in order to weed out felons. There would be an age requirement of 18 and older and players would be capable of permanently barring themselves from playing if they think they may be addicted. Possible penalties for violations include up to $1,000 in fines per violation and loss of state license. Colorado’s legislation would also outlaw such activity as the insider-trading scandal that took place last fall.
There is more than enough bipartisan support for the legislation to reach the governor’s desk. Sponsors include Senate Democratic leader Lucia Guzman and House Democratic leader Crisanta Duran. The bill is also sponsored jointly by former Weld County sheriff and Republican, Sen. John Cooke, and another Republican, Rep. Cole Wist, who is a partner in the Denver law firm of Holland & Hart.
Last Friday, Indiana Governor Mike Pence signed a bill which allows fantasy sports to be regulated by the state’s gambling commission and to charge the companies a one-time licensing fee of $50,000 in addition to an annual renewal fee of $5,000. And earlier this month in Virginia, a similar law was signed, and legislation resembling that measure is being considered in other states.