California creates a first for DFS regulation

ll that would regulate daily fantasy sports (DFS) in California has been passed by the state’s Governmental Organization (GO) Committee by an almost unanimous vote at a hearing.

AB 1437, authored by GO Committee chairman and Assemblyman Adam Gray in September, only received one vote against it.

It is the first time DFS legislation has been approved via a legislative vote and AB 1437 will now be passed on to the Appropriations Committee.

The bill would enact the Internet Fantasy Sports Games Consumer Protection Act and would require licensed DFS operators to pay an annual regulatory fee to be deposited into the Fantasy Sports Fund, while also making self-exclusion forms available to registered players.

AB 167, a bill seeking to legalise online poker in the state, was initially scheduled to also be involved in the hearing’s agenda but was removed from the agenda before the start of the hearing.

The vote comes at a time where the industry is facing regulatory developments in a number of states that have provided problems for DFS operators.

It was announced by the Nevada Gaming Control Board in October it had ruled that operators are required to hold a licence to operate a sports pool issued by the Nevada Gaming Commission in order to offer real-money DFS in the state.

That was followed by New York attorney general Eric Schneiderman’s attempts to ban FanDuel and DraftKings from operating in the state and a New York Supreme Court judge granted an injunction to do so in December, before a decision to grant a stay of injunction by a New York appellate court was issued later in the same day.

Similar events have occurred in Illinois, where attorney general Lisa Madigan has ruled that the contests offered by the two operators constitute illegal gambling under state law, regardless of whether they are games of skill or chance, and has asked both to include Illinois as a state where players may not register to play at their site unless the state decides to make DFS exempt from state law.

Both FanDuel and DraftKings have filed separate lawsuits in separate counties arguing against that decision.