US Representative Dina Titus of Nevada wants a congressional hearing to explore the legalities of daily fantasy sports (DFS). In a letter to the chairman of the House Committee on Energy and Commerce on Thursday, the Las Vegas democrat said it was critical that Congress “investigate this growing industry.”
Although Fantasy Sports enjoys a specific carve-out in the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), Titus noted that many experts in gaming law believe that the [daily fantasy sports] business model violates the UIGEA.
When the financial regulation earmark was added to a must-pass homeland security bill in 2006, fantasy sports were a season-long activity. Today’s contests can be entered into and concluded daily and most providers also include an “auto-generate” roster which is akin to a random number generator providing a result in some estimations.
Nevada casino sports books are missing out on millions of dollars in revenues on the pastime due to a lack of clarity on whether or not DFS is sports gambling. Regulators have asked the Nevada Attorney General’s office to provide a legal analysis on the subject.
Jim Murren, CEO of MGM has stated that DFS is gambling as has William Hill US CEO Joe Asher who says the practice should be regulated.
Rep. Frank Pallone, Jr., D-N.J. called for hearings last month but to date none have been scheduled on the issue.
New York Attorney General Eric Schneiderman opened an inquiry into so-called insider trading practices at the two top DFS companies this last week. In a later interview he repeatedly referred to providers and participation in DFS as “illegal” and “gambling”. Whereas Massachusetts AG Maura Healy determined that there is nothing illegal about DraftKings’ contests. Contradicting opinions indicate that without federal legislation or an opinion from the US Department of Justice, the issue will remain a matter of state’s rights. Kansas has specifically legalized DFS while Michigan and four other states contend it is illegal. FanDuel, DraftKings, and StarsDraft do not provide services to those five states.
American Gaming Association CEO Geoff Freeman is also calling for clarity on the legality of DFS, an industry estimated to be worth nearly $4 billion this year and expected to reach nearly $20 billion in the next five years. “If it’s legal, our casinos need to be involved in it,” Freeman said, according to a report by Howard Stutz of the Las Vegas Review-Journal.