A bill that would regulate and tax daily fantasy sports (DFS) was approved by a wide margin on Monday by New Jersey‘s Democrat-led Assembly.
A 3532, legislation that would oversee the DFS industry, which includes operators such as FanDuel and DraftKings, skated through the state’s Assembly in a 56-15 vote and now heads to the state Senate, as reported by the Associated Press.
As written, the bill would see a quarterly fee of 10.5 percent imposed on DFS providers gross revenues and calls for the Division of Consumer Affairs in the Department of Law and Public Safety to be the licensing body which would be the regulating body and issue permits to fantasy sports operators, including racetracks and casino licensees. Smaller-scale fantasy games between family and friends would not be affected, according to the report.
Along with setting in place financial guidelines such as requiring audits and monetary reserves, the measure would reportedly prohibit individuals who are under 18, prohibit the offering of any fantasy games that are connected to high-school sports, and likewise ban individuals who have financial interests in the fantasy industry.
The measure in The Garden State comes on the heels of the Fantasy Sports Trade Association’s statement last month that it estimates two-thirds of companies have either been acquired by competitors or closed, since last year. More closures loom as the legal landscape remains unsettled and as a costly lobbying campaign has been launched by the industry.
The advancement of the bill comes at a key juncture in the ongoing sports betting case in which the state of New Jersey was sued by MLB, the NBA, NHL, NFL and the NCAA in August of 2015 in an attempt to stop the state’s plan to allow sports betting on individual games and is currently in the federal court system. The 1992 Professional and Amateur Sports Protection Act (PASPA) restricts betting on professional and college sports games to all but four states which include Delaware, Montana, Nevada and Oregon.
In 2014 New Jersey passed a law allowing sports betting within its borders, but due to legal challenges, it has yet to take effect. The case has been appealed to the Supreme Court by the state of New Jersey and according to Legal Sports Report, a brief from the US Solicitor General precipitated by a letter penned by Rep. Frank Pallone asking Jeff Wall, the Acting Solicitor General, to tell the high court to take up the NJ sports betting case, could come this month.
A bill moving through the state Senate reportedly imposes a 9.25 percent tax rate on the gross revenue of daily fantasy sports companies.