NJ committee reviews fantasy sports
November 11, 2015 11:01 AM
by Phil Hevener
New Jersey lawmakers and regulators should not treat daily fantasy sports action the same way as casinos because success relies more on skill than on chance.
That was the essence of the message delivered to an Assembly committee Monday by a spokesman for he booming industry. The message was clearly aimed at lawmakers who have been studying the issue in other states.
“It’s a form of entertainment, not gambling,” said Jeremy Kudon, who represents DraftKings, FanDuel and the Fantasy Sports Trade Association. “Fantasy sports is a game of skill, not a game of chance. You need to understand the skills of different players. It depends almost entirely on the amount of time, research and talent – otherwise known as skill. Chance is not a material effect in the contest.”
Several lawmakers were clearly skeptical.
New Jersey’s gambling regulations are considered the strictest in the nation, and a favorable determination could clear the way for daily fantasy sports in much of the rest of the country as regulators look to New Jersey for guidance.
Last month, Nevada required fantasy sports companies to obtain a gambling license, and states including Pennsylvania, Massachusetts, New York and Georgia have considered enacting their own rules.
New Jersey officials, backed by a Monmouth University legal expert, said at the hearing they may have to change the state’s Constitution if the state deems daily fantasy sports to be gambling, legally defined as games of chance. Such a determination would expand gambling beyond Atlantic City, requiring a Constitutional amendment.
Daily fantasy sports allows people to deposit money in accounts, create fantasy rosters of sports teams by selecting real players and then compete against other contestants based on their players’ statistical performances to win money.
Representatives of the companies said they welcome consumer protection legislation that unequivocally establishes the legality of such contests and ensures fairness and transparency. But several said they object to the costs associated with casino licensure.
But a state senator and former Atlantic City mayor said after the debate he would introduce a bill to regulate them after conferring with the state Division of Gaming Enforcement. Sen. James Whelan’s bill would classify daily fantasy sports as games of skill.
Assemblyman Ralph Caputo said no decisions on whether or how to regulate them will be made immediately.
Some New Jersey lawmakers said they are wary of doing anything that might hurt the state’s ongoing legal battle to be able to offer sports betting. Assemblyman Ronald Dancer and Dennis Drazen, a management consultant to the Monmouth Park horse track, each cautioned against doing anything to harm the larger push for legal sports betting.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: PhilHevener@GamingToday.com.