Thursday October 22,2015 : FLORIDA SENATE AND HOUSE TO INVESTIGATE DAILY FANTASY SPORTS
Legal staff tasked with assessment.
The Florida mainstream media reported Wednesday that legal moves are afoot in both the state Senate and House to investigate the daily fantasy sports industry and assess what action could be taken to curtail or restrict its activities.
Florida Senate President Andy Gardiner has reportedly asked his lawyers to look into fantasy sports, whilst House Speaker Steve Crisafulli has directed legal aides to explore the fantasy sports issue in the wake of Nevada's decision that the vertical must be regulated and licensed.
"I have asked staff to start the process of researching as much as we possibly can," Gardiner told the News Service of Florida on Wednesday. "I would remind you we ran the Internet cafes out of the state of Florida because they were outlawed and they were bad.
“You have the Nevada Gaming Commission saying that FanDuel and DraftKings are gaming and gambling. So we have an obligation, if we're going to be consistent, that we need to look at them, and, if it is gaming, then we need to react to it."
Crisafulli said that it is still early days in the DFS affair and there is much to be learned about the DFS industry and its relationship with Florida state laws.
"We intend to understand that more before any decisions will be made moving forward," he commented.
The Fantasy Sports Association reacted somewhat aggressively with its lobbyist, Brian Ballard, accusing Nevada gambling regulators of "a hugely protectionist move" in shutting down DFS operators, and claiming that it made no sense to do the same in Florida.
"You can see pretty clearly they're trying to protect the casinos and other interests they have," Ballard said Wednesday. "I don't think it's relevant to what goes on in Florida."
He added that DFS operators are amenable to regulations that are protective of players, and have already prevented DFS employees from taking part in competitions.
"I think you'll see legalization soon that talks about regulation and talks about consumer protections and really enhances the rights of players but also protects them from any problems that would treat them unfairly," he said. "I'm hopeful that we'll see a mix of keeping what's legal, legal, while protecting players' consumers' rights first and foremost."
The daily fantasy sports vertical is fighting back in Florida and reportedly contributed $70,000 last month to political committees led by Florida lawmakers. The Association and major operator FanDuel have hired some of Florida's top lobbying firms to plead their cause.
Marc Dunbar, a Florida legal expert on gambling, told the publication Tampa Bay that Florida state law is very clear on the subject. "It says that you and I cannot wager against each other on a game of skill. Chess, checkers, cards, fantasy sports, horse racing – doesn't matter. We can't wager on a contest of skill. Most states don't have a statute like that," he said.
He warned that if state investigations (a Grand Jury has already been convened) linked any violation with the federal Illegal Gambling Business Act, it could be a "death sentence" for the industry in the state. Under the federal law, any violation of a state gambling law could open up businesses to very serious fines, forfeiture, or even prison, Dunbar said.
"The statute hits everybody. It hits investors. It hits everybody who aids and abets. It's a very, very, broad, intentionally broad, and aggressive statute," he warned.
In related news, the Massachusetts Gaming Commission announced Wednesday that it is to review the issues surrounding fantasy sports at its next meeting on October 29. The discussions would include questions regarding the legality of DFS under Massachusetts state law, a statement from Stephen Crosby, chairman of the Commission, noted.
The announcement comes as the state Attorney General's enquiry continued. Crosby emphasised that any final decisions on how to oversee the industry would rest with the Legislature, Gov. Charlie Baker and perhaps the state courts.
"I believe the commission will be able to provide constructive advice on the complex issues raised by the meteoric emergence of online fantasy sports," Crosby said.
State Senate President Stan Rosenberg, who has already commented on the need for regulation on DFS applauded the Commission decision, saying that its recommendations will help Massachusetts to craft "…common sense regulations for this new industry [in order] to protect consumers."
The state Attormney General, Maura Healey, outlined the nature of her DFS enquiry in an interview earlier this week with Boston Herald Radio, saying that consumer protection was her main focus, and that her review includes the accuracy of disclosures the companies make to customers, the kind of marketing they carry out and how they are treated for tax purposes.
"This is an issue that cries out for a regulatory legal framework and structure that will match the modern reality of what is happening here," she said.