California assembly approves DFS regulations

California assembly approves DFS regulations

January 28, 2016 9:35 AM
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The fast-growing daily fantasy sports industry got a cordial reception in California’s state Assembly Wednesday as lawmakers easily approved regulations that would control fantasy action in the country’s most populous state should they become law.

The national debate over whether the online activity violates state gambling laws goes on elsewhere around the country but California lawmakers approved the regulations 64-1. The legislation now goes to the Senate.

The bill by Assemblyman Adam Gray, D-Merced, would legalize the games while requiring that operators pay regulatory fees and be licensed by the state Department of Justice. The bill, AB1437, would also require operators to undergo background checks, pay taxes on their profits and report players’ winnings to the state so they can be taxed. They would also be required to ensure that players are adults and weed out fraud.

“It’s our responsibility as legislators to make sure they’re playing in a safe and regulated game, where people are not being taken advantage of, where identity theft is not going on, where underage children are not playing,” Gray said.

The sole vote against the proposed regs was cast by fellow Democratic Assemblyman Marc Levine of San Rafael who argued that the games are a form of gambling that cannot be regulated by lawmakers. The games, he said, can only be approved by voters in the same way that the state lottery, horse racing and tribal casinos were allowed.

Levine has asked that Attorney General Kamala Harris weigh in on the issue just as attorneys general in other states have already done. Harris has yet to issue an opinion or discuss fantasy sports publicly.

New York’s Attorney General has attempted to shut down the operations of companies such as FanDuel and DraftKings but the issue is being appealed and it will likely months before the final argument has been made.

DraftKings and FanDuel were major sources of revenue for professional sports teams during the past football season. Their ads were everywhere on television.

Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: PhilHevener@GamingToday.com.