BUSINESS

Georgia attorney general latest to say daily fantasy sports is illegal gambling

TAGs: daily fantasy sports, DraftKings, fanduel, Georgia, georgia lottery

georgia-daily-fantasy-sports-illegal-gamblingThe Georgia Attorney General’s office says daily fantasy sports are currently illegal under existing state law, a stance that likely contributed to the failure of a DFS bill to advance in the state legislature on Monday.

On Monday, the Atlanta Journal Constitution quoted a letter from deputy AG W. Wright Banks Jr. to a Georgia Lottery Corporation (GLC) lawyer expressing the sentiment that “daily fantasy sports are not authorized under Georgia law.”

The letter was written in response to a GLC request for clarification made last October, which followed letters the GLC sent to DFS operators DraftKings and FanDuel the previous month, warning them that their activities in the state appeared to be illegal.

Georgia law limits betting activity to the types offered by the GLC and defines forbidden bets as any agreement through which “dependent upon chance even though accompanied by some skill, one stands to win or lose something of value.”

Banks’ response to the GLC request cites a 1934 case involving a gaming machine, in which the court determined that the definition of a game of chance “did not depend on whether a participant could become more proficient with practice, but on whether the same player could do the exact same thing and still lose – not because of his actions, but because of the action of the machine.”

Banks noted that DFS participants were equally likely to win one contest “then lose the next tournament due to the performance of players outside of the participant’s control.”

Like many other states, Georgia makes an exception for contests in which the person benefiting is the “actual contestant” on whose performance the outcome is decided. But Banks says this exclusion “does not apply to daily fantasy sports.”

Georgia state Sen. Renee Unterman had introduced a consumer protection bill (SB 352) that would exempt DFS from state gambling statutes. But the bill didn’t come up for a vote on Monday – aka ‘crossover day,’ by which legislation must pass a floor vote in one chamber in order to be considered by the other chamber in the current session – making SB 352’s future a longshot at best.

Georgia joins Hawaii, Illinois, New York, Mississippi, Texas and Vermont on the list of states whose attorneys general have declared DFS to be illegal gambling since the industry imploded last October. Nevada has said DFS is legal but operators require state gambling licenses, an invitation no DFS operator has so far chosen to accept.

DraftKings and FanDuel have traditionally applied a self-serving litmus test in their response to such attorney general missives, exiting markets where their revenue is slight, while loudly proclaiming their right to operate in states from which the loss of revenue would have a palpable effect on the operators’ bottom lines. The companies have yet to weigh in on their Georgian plans.

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