Fantasy Sports same as DFS in Minnesota

March 23, 2016 9:53 AM
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A national debate over daily fantasy sports games has come to the Minnesota Legislature, starting first with a House committee hearing Tuesday on a proposal that would clearly show that fantasy games are not gambling and are legal in Minnesota.

"My hope is pretty simple,'' said bill sponsor Republican Rep. Tim Sanders. "It's just that fantasy sports will continue to exist as they currently are.''

Currently, Minnesota law doesn't address daily fantasy sports, in which users pay entry fees to manage rosters of teams like a general manager and then earn points depending on how well those players do. Sanders' bill would show that fantasy sports games are games of skill, and would allow the companies to operate in Minnesota without being taxed or regulated.

Attorneys general in New York, Illinois and Texas have issued opinions that daily fantasy sports are illegal games of chance. On Monday, the nation's two largest daily fantasy sports websites, FanDuel and DraftKings, agreed to stop taking bets in New York as lawmakers consider legalizing the popular online contests, and earlier this month, Virginia became the first state to formally legalize and regulate daily fantasy sports sites.

While Sanders says the daily fantasy companies have prospered so far without government intervention and should continue to do so in Minnesota, others would like to see at least some state regulation.

Rep. Joe Atkins, a Democrat from Inver Grove Heights, has introduced a bill would mandate that daily fantasy sports websites operating in Minnesota undergo background checks, that companies can be audited by the state and that there are provisions ensuring Minnesota residents playing the games actually get paid.

"These games aren't going to stop whether they're made illegal or not,'' he said, noting that since the games are mostly run by out-of-state companies, adding consumer protections is more important than trying to stop them altogether.

Atkins also said he hopes Sanders amends his bill to add some consumer protections, which he said would gain his support. Atkins' bill hasn't yet received a hearing.

Virginia's regulations for daily fantasy sites require them to pay a $50,000 initial registration fee and submit to regular outside audits. After Democratic Gov. Terry McAuliffe signed his state's bill into law, a spokesman for DraftKings in Virginia said the company thanked the state for its advocacy and hoped that other states would follow Virginia's lead.

In New York, the attorney general has gone after the daily fantasy sports sites, but has left alone traditional fantasy sports sites that play out over several months and have operated for decades. Sanders said his bill makes no distinction between seasonal fantasy sites and daily fantasy sites.