If you were laying odds earlier this year, it looked like online poker and casino games were a favorite to be regulated in Pennsylvania this year.
And while those efforts have stalled and are far from dead, it looks like legislation to regulate the daily fantasy sports industry might reach the finish line first.
Daily fantasy sports gets top billing?
Throughout October, daily fantasy sports had gotten a lot of people talking about it — including government officials around the country. One of the fastest states to move to provide oversight of the daily fantasy sports industry has been Pennsylvania.
The effort to take a closer look at the DFS industry actually started back in May, with a bill introduced by Rep. George Dunbar. His bill sought to allow brick-and-mortar casinos to offer daily fantasy sports contests.
Originally, the legislation was not designed to affect national operators like DraftKings and FanDuel. But in the wake of the events and news of the past month, Dunbar is reportedly amending the bill to force any DFS site that wants to operate in the state to partner with a casino.
From the Allentown Morning Call:
The finer details of Dunbar’s fantasy sports bill are still being written, but its concept is fairly simple. It would deem fantasy leagues as gambling, putting them under the direction of the Pennsylvania Gaming Control Board. Casinos would have the opportunity to operate them for a one-time, $5 million licensing fee.
As Nevada is in the process of doing, Dunbar’s bill would provide a path for fantasy sports companies to stay in the game. Under Dunbar’s amendment, they’d pay a one-time, $1 million fee to partner with the casinos. Players would probably log into a casino website and be directed to a provider such as DraftKings or FanDuel.
So is the PA plan going to work for daily fantasy sports?
The legislation, as constructed, is not very friendly to the DFS industry. It creates fees that will certainly be too high for nearly any site not named DraftKings or FanDuel to afford for access to players of a single state — even as large as Pennsylvania is.
The bill (HB 1197) still has not actually been amended, nor does it seem like the DFS industry has been brought into discussions, and if it has, it has been ignored. A lobbyist said the proposed amendments to the bill would be “tantamount to a ban,” per the Morning Call. The bill is slated to be considered and perhaps voted on in the House Gaming Oversight Committee meeting on Nov. 10.
It’s not clear if DraftKings and FanDuel would actually stay out of PA if Dunbar gets his way, but it’s certainly possible that they pull out, given what we know. However, if the bill is not rushed through committee and the legislature, and Dunbar and other lawmakers work with the industry, it’s possible that a more appealing bill could be worked out.
On the other end of the spectrum is a bill in Illinois that proposes no licensing fees or taxes. There’s likely a middle ground between that approach and the one being floated in Pennsylvania, that would be amenable to all stakeholders.