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Daily fantasy sports scores legislative win, but small sites bemoan looming duopoly

On Monday, Virginia governor Terry McAuliffe signed into law the Fantasy Contests Act, making it the first state to formally legalize daily fantasy sports. It is being hailed as a victory for the industry at a time when bad news outnumbers the good, but some smaller operators are unhappy.

The bill includes a one-time $50,000 licensing and an annual $5,000 regulatory fee. Its broad language also makes no mention of the word “daily,” making it applicable to real-money seasonlong operators as well.

“It really puts us out of business in your state,” David Gerczak, co-founder of a high-stakes, seasonlong fantasy football site, told the Virginian-Pilot.

He’s likely not alone. While the daily fantasy sports market is dominated by behemoths FanDuel and DraftKings, there are dozens of smaller companies that might find $50,000 fees for a single state prohibitive.

“Maybe one or two could try and pony up the dough,” Gerczak told WFYI in Indianapolis. “But when you think about all the states we’re talking about, what they’re trying to do is create this duopoly.”

Indiana could be the next state to make DFS legal. Its bill, which includes identical fees, is currently awaiting the governor’s signature after easily passing through both chambers of the state legislature.

Twenty-three states currently have active legislation that would legalize DFS and introduce some form of regulation. Many of those are seemingly based on the model bill created by the Fantasy Sports Trade Association. The model does not include fees or taxes, but could be amended to include both.

AROUND THE WEB

  • The Nevada Gaming Policy Committee talked about daily fantasy sports at length in Monday’s meeting, which featured an appearance from FanDuel and DraftKings CEOs Nigel Eccles and Jason Robins, respectively. Some six months after the state Attorney General said daily fantasy companies needed to apply for gaming licenses to operate in the state, the committee is considering possible amendments to its current regulatory infrastructure or the creation of a new scheme to deal specifically with DFS.
  • Meanwhile, veteran sports book operator Vic Salerno says his DFS site, US Fantasy, remains on track to be up and running in Nevada and beyond by the start of the 2016 NFL season.
  • A new effort launched to regulate (and tax) DFS in New Jersey.

LOOK WHO’S TALKING

“We got our nuts kicked in.”—BetOnline’s Dave Mason on the losses absorbed by the online book thanks to a pair of upsets in UFC 196 on Saturday.

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