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AB-1437 Gambling: Internet Fantasy Sports Game Protection Act

Monday September 14,2015 :  CALIFORNIA REGULATION FOR DAILY FANTASY SPORTS?
 
Assemblyman Adam Gray introduces new proposal as legislative season ends.
 
Assemblyman Adam Gray, author of a stalled online poker legalisation bill in the California legislature  has introduced a new bill proposing the licensing and regulation of the booming daily fantasy sports industry in California.
 
Titled AB-1437 Gambling: Internet Fantasy Sports Game Protection Act, the measure was introduced as the legislature wound up its current session this week.
 
Assemblyman Gray kept lawmakers and observers guessing by also launching a proposal to legalise sports betting, apparently without awaiting the outcome of New Jersey's long-running litigation that has a similar goal.
 
The preamble to AB 1437 states:
 
"Existing law, the Gambling Control Act, provides for the licensure and regulation of various legalized gambling activities and establishments by the California Gambling Control Commission and the investigation and enforcement of those activities and establishments by the Department of Justice. Existing law prohibits a person, whether or not for gain, hire, or reward, from making a betting pool or placing a bet or wager on the result of any contest or event, including a sporting event, as specified.
 
"This bill would enact the Internet Fantasy Sports Games Consumer Protection Act, which would require a person or entity to apply for, and receive, a license from the department prior to offering an Internet fantasy sports game for play in California. The bill would require the department to issue a license to a person or entity that applies for a license if the person or entity satisfies specified requirements, including, among others, that the applicant is of good character, honesty, and integrity. The bill would also require a person to register with a “licensed operator” prior to participating in an “Internet fantasy sports game” on an “authorized Internet Web site,” as those terms are defined."
 
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1437
 
Initial reaction from the Fantasy Sports Trade Association was cautious, with president Paul Charchian commenting that the trade association was reviewing the Gray proposal and that the Association looks forward to working with and "educating" the Assemblyman on DFS.
 
Although the timing of the bill took observers by surprise, there have been many predictions that it was only a matter of time before regulatory moves were made on DFS in California, given the fast rise in popularity of the genre, the big money now involved, and the debate on whether it constitutes gambling.
 
Other states known to be considering how to handle the vertical's meteoric rise include Kansas, which legalised DFS earlier this year, and Iowa, Louisiana, Texas and Illinois, where proposals  have been made but have gained little traction so far.
 
In Michigan the state lottery director has opined that DFS is illegal despite a bill introduced recently seeking to create an exemption for DFS in state gambling laws, but the state Attorney General has still to give a view.
 
Arizona, Washington and Montana appear to be against DFS and most operators exclude players from these states.
 
AB 1437 would require all DFS operators to be licensed and regulated in California - a popular operator target due to its large population and relatively well-off per capita demographic.
 
The Gray proposal goes into some detail in defining DFS and proposing that licensing be handled by the California Department of Justice, although tax rates and licensing fees are at present open.



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