Friday, December 4, 2015 : WASHINGTON STATE GAMBLING REGULATOR CONTINUES TO INVESTIGATE DAILY FANTASY SPORTS
Filings by New York AG unearth some interesting prior enforcement action on DFS.
The request for an injunction against daily fantasy sports operator DraftKings made early in November by the New York Attorney General's Office has brought to light some interesting information about actions against DFS in another state.
In its submission to New York Judge Manuel Mendez, the AG provides details of an eight month investigation into DFS by the Washington State Gambling Commission – a body well-known for its enforcement of online gambling prohibitions.
The investigation back in 2011 led to the conviction of one David Watkins, who owned and operated a DFS site titled Fantasy Thunder in Spokane and ultimately entered a guilty plea to a count of attempted transmission and receiving gambling information, in what may be the first successful DFS prosecution and site shutdown.
It appears that a legal firm advising DFS market leader Fanduel was aware of the case, flagging it in a brief to Fanduel and the NBA in late 2014 and commenting that some DFS operators had decided to avoid operating in Washington state as a result of the prosecution.
That letter is included in the New York AG's filing, which claims that the state laws of New York and Washington are similar in their statutory definitions of gambling and chance.
The AG comments: "Relying on those definitions, the [WSGC] has previously declared that online ‘fantasy sports wagering is not authorized for play in Washington State.”.
Following up on the filing, the publication ESPN approached the WSGC for comment, and was told by spokesperson Susan Newer that the Commission has commenced a further investigation following the filing of the New York AG case.
"We receive email complaints over our agency website," Newer commented to ESPN. "We do have investigations pertaining to DFS, but I am unable to provide any specific information given the ongoing nature of the investigations."
Newer added: "Any DFS company operating in Washington or providing services to Washington residents would be illegal under state law."
However, ESPN notes that the legal position of daily fantasy sports in Washington State may be changed by new moves in the state legislature to legalise certain forms of DFS, although these have yet to be debated and voted on.
The Commission recently completed a comprehensive 41-page study of daily fantasy activity, and the Washington State Senate held hearings on the possibility of permitting the popular pastime.