By Dustin Gouker
Legal Sports Report
August 2, 2017
Maine became the fifth state to legalize paid-entry fantasy sports this year — and the 15th overall — with a new law that went on the books on Wednesday.
It’s the latest in a run of victories in small Northeastern states for daily fantasy sports sites DraftKings and FanDuel. Vermont, New Hampshire and Delaware have all enacted laws since the start of June.
Marc La Vorgna, spokesperson for DraftKings and FanDuel, offered this statement after Maine’s law took effect:
“Maine is now the 15th state to adopt a regulatory framework to protect the right to play fantasy sports, protect consumers and help a booming piece of the tech economy continue to grow. Thanks to action by the legislature — led by Senators Carpenter, Jackson, Katz, and Mason, and Representatives Dillingham, Farrin, Golden and Luchini — up to 200,000 Mainers will continue to enjoy our new national pastime — fantasy sports — under a framework of sensible, light-touch consumer protections.”
The Maine fantasy sports law, at a glance
The state legislature approved a bill clarifying the legality of fantasy sports and regulating paid contests in July.
Gov. Paul LePage had until last night to sign or veto the bill, or do nothing and allow it to become law via his inaction. The latter is what happened, officially turning the bill into law.
No matter how it happened, it’s still another law that’s good for DFS operators. Here’s what’s in it:
Declares fantasy sports a game of skill and exempt from state gaming laws.
Oversight of operators is given to the Gambling Control Unit within the Department of Public Safety. The director of that body is given wide-ranging powers, including the ability to promulgate rules.
The licensing fee for operators with revenue in state of more than $100,000 is $2,500. That would only apply to DraftKings and FanDuel. Companies with revenue less than that are not subject to a licensure fee. Smaller operators may be subject to an application fee that is to be determined.
The same $100,000 threshold applies for a tax of 10 percent on gross revenue in the state. Only DraftKings and FanDuel would have to pay this, as the industry is currently situated.
A number of consumer protections are in the law that have also appeared in other states. The laws says that operators must prevent play by employees, establish responsible gaming protocols, and segregate player funds from operational funds, among other provisions. On the final point, an audit on the disposition of funds is only required for sites with gross revenue of more than $100,000 in the state.
The law sets a minimum age of 18 for players.
The law prohibits contests based on collegiate or other amateur events.
The tally of states with DFS laws
Here’s the full list of states with fantasy sports laws (bold passed in 2017):
All of those except for Kansas include some sort of regulatory component.
A bill in New Jersey has reached the desk of Gov. Chris Christie, who has not signed or vetoed it, yet.
Trouble elsewhere in New England…
The news wasn’t as good in Massachusetts, the first state that acted to regulated DFS, this week.
A report from the Massachusetts Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports recommended that the legislature designate DFS as “online gaming.”
Moving in that direction would fundamentally alter how the state treats DFS operators. And it could have an impact in other states considering fantasy sports regulation. All the states above have specifically given DFS legal clarity as a game of skill and have not stirred up the hornets’ nest of being calling “gambling.”
DraftKings voiced its displeasure with the special commission’s report.