On Wednesday, Governor Andrew Cuomo signed a bill into law that legalizes the daily fantasy sports industry within the state of New York. Such operators as DraftKings and FanDuel can now offer their services in New York without fear of prosecution. The State Gaming Commission has the authority to regulate operators, with supervision in place along with protection for players.
After signing the measure into law yesterday, Cuomo stated that daily fantasy sports have proven to be popular within the state but until now such contests have operated under no supervision with no protection in place for players. With the new legislation, the right balance is created that will allow the activity of DFS to continue with oversight from regulators of the state, including new consumer protections and additional funding for education.
In March of this year, daily fantasy sports sites of DraftKings, FanDuel and Yahoo shut down after an agreement was struck between the brands and the Attorney General of the state, Eric Schneiderman. In 2015, Schneiderman had made the decision that daily fantasy sports contests were in violation of the then current state gambling laws.
The AG has stated he will continue to enforce and defend the new law but will still continue his case against DraftKings and FanDuel. Schneiderman was quoted at nydailynews.com, stating that the claims of false advertising and consumer fraud for past misconduct by FanDuel and DraftKings will continue to move forward despite the new law.
The bill, created by State Senator John Bonacic and Assembly Racing and Wagering Committee Chairman Gary Pretlow, defines the activity of daily fantasy sports as a game of skill when it was previously considered a game of chance. With the new law, sites that provide daily fantasy sports gaming will have to gain licensing from the state. Taxes will need to be paid of 15% on gross revenues after prizes have been paid. 0.5% in tax will also be charged to cover the fee for licensing.
Nigel Eccles is the Chief Executive Officer for FanDuel who stated that the signing of the bill is a capstone achievement for the industry and that the future of fantasy sports has been affirmed in the state of New York. FanDuel expects the legislative momentum to continue to accelerate as additional states address the issue. With the passage of the bill, New York becomes the 8th state to pass legislation legalizes daily fantasy sports since 2016 began.
Officials of New York State have determined that the industry should be able to generate as much as $4 million a year in tax revenues. This money will be used to fund education within the state. The bill was actually approved during the annual session in June but Cuomo had yet to sign the bill as it was not delivered to his desk until this past Tuesday.