Missouri weighs Daily Fantasy Sports

April 12, 2016 3:00 AM
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Draft Kings Daily Fantasy SportsMissouri House members this week took action to be among the first states to pass laws protecting daily fantasy sports, a business that has fallen under national scrutiny by state lawmakers and attorneys general.

Daily fantasy sports sites such as DraftKings and FanDuel could continue to operate in Missouri under the proposal passed by the House 104-38 on Thursday.

"At some point I think it's OK for government to let people sit on their couch and play fantasy football,” Kansas City Democrat Rep. Jeremy LaFaver said during earlier debate on the measure. Government, he said, needs to "allow folks to have a little fun.''

Sites would need to adopt policies to ban daily fantasy sports employees with insider knowledge from playing, to verify users are at least 18 and to pay a $5,000 annual registration fee.

But the proposal does not call for taxing and regulating the businesses under the state's gambling laws, something Democratic Gov. Jay Nixon called for in his first address to lawmakers this year. Republican bill sponsor Rep. Scott Fitzpatrick, of Shell Knob, said that could signal a potential veto.

Fantasy sports players pick imaginary teams of professional sports figures that compete against each other based on how real players perform in games. Season-long fantasy sports teams compete over months, but the practice facing regulations in Missouri is based on how players perform over a day's or weekend's real-world games.

States now are debating the role of skill and luck in those daily games and whether that type of fantasy sport should be regulated or banned.

Attorneys general in Massachusetts, Rhode Island and Kansas so far have ruled the practice legal, while 10 others call it illegal gambling, according to the National Conference of State Legislatures.

Kansas is also among three states that have legalized daily fantasy sports through statute, according to the organization. Lawmakers in 35 states, including Missouri, are weighing the policy this year.

DraftKings, the Fantasy Sports Trade Association and RealTime Fantasy Sports back the Missouri bill. Missouri Ethics Commission records show DraftKings hired nine lobbyists to work the Capitol halls.

Bipartisan supporters of the legislation argue daily fantasy sports require skill and are different from gambling, while critics say guessing at players' daily performance relies more on luck and the practice should be regulated and taxed like gambling. Democratic Rep. John Rizzo, of Kansas City, said during debate Tuesday that a $5,000 annual fee is "peanuts” for the billion-dollar industry.    

Attorney General Chris Koster hasn't publicly given any indication that he might issue an opinion on the legality of daily fantasy sports, and spokeswoman Nanci Gonder in a Friday email said his office "will continue to monitor the progress'' of legislation. Koster is running for governor.

Nixon during his opening remarks to the Legislature in January called on lawmakers to “work together to protect kids and consumers by reining in the billion-dollar daily fantasy sports industry.”

Spokeswoman Channing Ansley didn't specifically say whether Nixon supports Fitzpatrick's bill but on Friday reiterated that he "was very clear in his State of the State address that if the legislature is going to legalize this industry, they must regulate it and tax it just like we do casinos.”

Fitzpatrick questioned the need to tax and said it would ultimately make it more expensive for players.

A Republican-sponsored measure to exempt daily fantasy sports from gambling laws is stalled in the Senate's only Democratic-led committee.

A Democratic bill requiring such operations to be licensed, pay a $25,000 annual fee and pay a 21 percent tax on adjusted gross receipts from Missouri residents is awaiting debate in the chamber. Money from the tax would go to schools. That bill also would raise the age limit on daily fantasy sports to 21 years old.

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