NY Hearing to Focus on Fantasy Sports Impact

Lawmakers want to know if daily fantasy sports is impacting regulated gambling.

Three New York legislative panels are seeking answers to the impact the daily fantasy sports industry is having on other sectors of the gambling industry, including horse racing and the state's own lottery system.

The Assembly committees on racing and wagering and consumer affairs and protection, as well as a legislative commission on administrative regulations review, are inviting stakeholders from various industry groups to a Dec. 8 hearing in Albany. The stated purpose of the gathering is to "examine daily fantasy sports games in New York State and their impact on New York consumers and the state."

The hearing comes as two of the biggest DFS players—DraftKings and FanDuel—are embroiled in a legal fight with New York Attorney General Eric Schneiderman. The DFS operators were due in court Nov. 25 for a hearing that could decide whether Schneiderman is successful in blocking the industry from doing business with New York residents.

The attorney general has said DFS contests are illegal forms of gambling because they involve a level of risk, while the two companies insist their contests—played by hundreds of thousands of people each week who pay fees and can win money based on their professional sports player selections—are permissible under New York law because they are games of skill.

"I'm hoping to get some insight into the whole working of fantasy sports in general," said Assemblyman Gary Pretlow, who chairs the Assembly Racing and Wagering Committee. "The attorney general has said it's gambling, and whether or not it is I do believe there needs to be some strong regulations to protect consumers."

Pretlow said he is concerned that teens under age 18 are DFS players, and DFS companies, unlike regulated gambling entities, don't pay licensing or other fees to the state for the right to operate. Pretlow said the committees will look at everything from compulsive gambling issues to whether gambling dollars generated by regulated entities in New York are being diverted to DFS.

"It will be a freewheeling hearing," Pretlow said Nov. 24.

The committees have invited Schneiderman to testify, along with the state comptroller, New York State Gaming Commission, New York Council on Problem Gambling, and New York Gaming Association. Also invited are several DFS companies, including DraftKings, FanDuel, and Yahoo.

Legislation was recently introduced in the New York Senate to legalize DFS. "That's the normal Senate answer for things," Pretlow said of what he called a rush to legalize an industry few lawmakers know anything about. "Let's see what we have before we go out and legalize something."