One of the hottest issues facing lawmakers in the 2016 Legislative Session is the regulation of the daily fantasy sports industry.
Moving toward that goal is HB 707: Fantasy Contests, sponsored by state Rep. Matt Gaetz, has recently move out the Business & Professions Subcommittee, its first stop in the Florida House. What the bill seeks to do is create a series of consumer protections and oversight for DFS operators.
Highlights of the proposal include: fantasy sports operator employees and their relatives would be blocked from playing games for cash prizes; a requirement for verification that players are 18 years of age or older; payer money must be segregated from operational funds and the requirement for an annual third-party audit.
In addition, the bill creates civil penalties for operators that do not comply.
Now that HB 707 has cleared its first legislative hurdle, here are five questions for the Fantasy Sports Trade Association, the leading trade group representing DFS operators:
Do you support the proposed legislation by Senator Negron and Representative Gaetz that would regulate the fantasy sports industry in Florida while clarifying its legality?
The Fantasy Sports Trade Association (FSTA) is supportive of the type of thoughtful consumer protection measures and common-sense regulations that are outlined in Senator Joe Negron (R-Stuart) and Representative Matt Gaetz’s (R-Fort Walton Beach) legislation. The legislation isn’t perfect, as many of our members have concerns about the licensing fees that may burden smaller and developing companies, but this approach to work with the industry should result in an outcome that allows growing businesses to flourish in the state.
As these legislative efforts continue to move forward during the 2016 Legislative Session, we simply ask that Florida lawmakers take into account the 3 million Floridians who love fantasy sports and want to keep their favorite pastime legal.
In light of the recent accusations of so-called “insider trading,” what is the FSTA’s position on regulations in the bill that prohibit the operator, employees of the operator, and family members of the operator from playing fantasy sports contests, like FanDuel and DraftKings? Likewise, what is the FSTA’s position on preventing employees of the game operator from sharing confidential information that could affect fantasy game play with third parties until the information is made publicly available?
Following these accusations, DraftKings conducted a thorough internal review of all protocols and found that there was no improper use of information by a DraftKing’s employee. In addition, an independent investigation performed by Greenberg Traurig confirmed this was the case.
That said, over the course of the last few months, many important questions have been posed about the fantasy sports industry, which is to be expected in such a fast-growing, technology-focused business. Those questions certainly need to be addressed and while the major fantasy sports sites have already begun taking steps to do so, we welcome regulations, such as the ones contained in Senator Negron and Representative Gaetz’s legislation.
FSTA’s members are committed to being 100 percent transparent in their operations and ensuring that the contests offered are fair for all players.
What do you say to opponents who say fantasy sports is gambling?
Fantasy sports is a legal, skill-based entertainment product.
While some would suggest fantasy sports contests are a game of chance, in reality, whether a participant wins or loses, hinges entirely on his or her skill relative to the other participants in the fantasy contest. For example, participants playing fantasy sports contests select a team of real-world athletes and accumulate points based on how their players perform in actual games. The goal — regardless of format — is to select a team of players that will score the most possible points. As you can imagine, putting together a winning roster of players takes a lot of skill, because it is not enough to know the most popular teams and their players. Participants competing in fantasy sports have to have a deep understanding of scoring systems, the strengths and weaknesses of different players, and the quality of that week’s matchup.
Fantasy sports is not just a spin of a wheel, the roll of a dice or the flip of a coin, as participants in fantasy sports contests spend hours analyzing statistics, in order to assemble their winning team. Simply put, this is a game of skill.
Moreover, Floridians have spoken loudly that they want fantasy sports to remain legal, and they want the industry to be held to a high standard of integrity.
There were three new provisions that committee members asked the sponsor to add to the bill. As an industry, what do you think about those?
While we would prefer a free-market approach and firmly believe that fantasy sports are legal, we understand the need to address these important questions that have been raised and welcome the opportunity to work with the bill sponsors, as well as members of the House and Senate on provisions, such as these.
Isn’t this legislation just about protecting FanDuel and DraftKings’ operations?
First and foremost, we believe that this legislation is about keeping fantasy sports legal for the 3 million Floridians who have grown to love them. In addition, there are many more businesses than just FanDuel and DraftKings in the fantasy sports industry who are also members of FSTA, including companies right here in the Sunshine State. In fact, there are a dozen fantasy sports-related businesses headquartered in Florida, including CBS Sportsline, as well as many new and innovative startups.