Key NY lawmaker sees state legalizing daily fantasy sports

AP News
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Posted: Dec 08, 2015 5:49 PM

ALBANY, N.Y. (AP) — The chairman of a state legislative committee with authority over gambling predicted Tuesday that New York will legalize and regulate daily fantasy sports, no matter how a court fight centered on the lucrative industry turns out.

Assemblyman J. Gary Pretlow, who leads the Committee on Racing and Wagering, said the approach state lawmakers take will depend on the outcome of a lawsuit filed by New York Attorney General Eric Schneiderman to block daily fantasy sports operators FanDuel and DraftKings from conducting what Schneiderman considers illegal gambling.

Scheiderman and the companies are waiting for a ruling from Justice Manuel Mendez in state Supreme Court.

"In either case we're going to do something," said Pretlow, a Westchester Democrat. He cited industry estimates that between 2.5 million and 3.5 million New Yorkers are playing daily fantasy sports online. "If the court rules it's illegal, we'll do something probably to legalize it."

As they have in the court case, attorneys for both companies insisted at a legislative hearing Tuesday that daily fantasy sports is based materially on player skill, not luck. Therefore, they say, it doesn't qualify as gambling under New York law.

Players pay entry fees, which can range from $1 to more than $10,000, and select a group of eight to 10 individual professional athletes for their fantasy teams. They accumulate scores depending on the stats of individual athletes.

"They're general managers of virtual sports teams," said attorney Jonathan Schiller, an attorney for Boston-based DraftKings. The people who do the most research and have the most knowledge win most of the money, he said.

The attorneys representing the companies and growing industry acknowledged there's some chance involved, but insisted it's predominantly about skill. They also said the two companies, which dominate the U.S. market, only take a portion of entry fees and facilitate the games, with most of the money going to predetermined prizes. Season-long fantasy sports have been around for about 20 years, while technology has permitted the more recent daily games, they said.

Assemblyman L. Dean Murray, a Long Island Republican, said he plays primarily as a form of entertainment and that he's slightly ahead for the year. He has introduced legislation to specifically remove daily fantasy sports from New York's definition of games of chance, and alternatively, to amend New York's Constitution to make another exception from its general prohibition on gambling.

Assemblyman Ken Zebrowski, a Rockland County Democrat, said he's played fantasy sports for a long time and tried the daily game.

"There's certainly a lot of skill involved," he said.

If Mendez finds daily fantasy sports is legal under current federal and state laws, Pretlow said New York will take steps to regulate it. He said there should be consumer protections like a prohibition on minors playing.

Pretlow said he's not a lawyer but he believes there won't be a need to amend the constitution. He also said daily fantasy sports looks like gambling.

"I think anyone who puts down money to get something, it's gambling, unless they're purchasing something," he said.

Enacting the legislation will depend, of course, on both legislative chambers and the governor, he said.