By Scott Malone
BOSTON (Reuters) - Paid fantasy sports games are illegal in Vermont, a top law enforcement official said on Friday, as the New England state's legislature took up discussion of a bill that would exempt the popular games from the state's anti-gambling laws.
The fast-growing, multibillion-dollar fantasy sports industry has drawn increased attention from state regulators over the past year, with the attorneys general of New York, Illinois and Nevada challenging their legality.
A Vermont senator last week introduced a bill that would allow the games, but prohibit play by people under 18, professional athletes and people who work for the industry, dominated by DraftKings and FanDuel.
"Daily fantasy sports violate Vermont's gambling laws," John Treadwell, a state assistant attorney general said in an interview after discussing the proposed Vermont bill with legislators. "Vermont has very strict long-standing limitations on gambling."
Much of the national debate on fantasy sports has hinged on whether they are games of chance, as opponents contend, or games of skill, as claimed by the industry.
However, Vermont law bans wagering on both games of chance and of skill, Treadwell said, noting that one key legal precedent was an 1856 court decision related to a bet made on the sale of a pair of gray horses.
The state also has laws on the books that prohibit the collection of gambling debts and allowing people who lose money in bets to sue to recover their losses.
Treadwell said the proposed bill would give fantasy sports, in which participants build a roster of players from real-life sports teams and accumulate points based on how those players perform in actual games, a special status compared to other forms of gambling.
"Exalting one version of gambling above others does not seem appropriate," he said.
Vermont has so far taken no legal action against fantasy companies, he said.
The games are currently illegal in Arizona, Iowa, Louisiana, Montana and Washington. The attorneys general of New York and Illinois have also declared the games illegal, but those rulings are being challenged in state courts. Nevada has said fantasy sports companies cannot operate in the state unless they receive gaming licenses.
The attorney general of neighboring Massachusetts has proposed a series of regulations on the games, stricter than those in the Vermont bill, which would ban people under 21 from playing, prohibit the promotion of the games on college campuses and shut down games based on college sports.
(Reporting by Scott Malone; Additional reporting by Michael Erman in New York; Editing by Tom Brown)