On Monday, Gov. Terry McAuliffe (pictured) formally signed into law the SB646 ‘Fantasy Contests Act’ that state politicians approved last week. McAuliffe’s office issued a statement saying the bill would “empower Virginia to regulate this emerging industry and keep consumers safe from abuses.”
The legislation was signed without amendments, as McAuliffe rejected pleas from the season-long fantasy industry to clarify that the bill refers only to DFS. Of chief concern to season-long operators is the bill’s requirement of an initial $50k registration fee, which could prove too tall a hurdle for many smalltime fantasy operations.
That hurdle won’t pose a problem for DraftKings and FanDuel, who are likely pitching tents outside the offices of the Department of Agriculture and Consumer Services – who have responsibility for overseeing DFS in Virginia – to file their applications the minute the DACS opens its doors. Yahoo will also likely apply, but after that it’s anybody’s guess which third-tier operators will deem it worth their while.
In a particularly untimely display of faux outrage, the Fantasy Sports Trade Association (FSTA) waited until McAuliffe’s ink was dry before expressing concern about the high initial fees making it “untenable” for smaller operators to participate. Insert shocked – shocked! – emoji here.
NEW JERSEY DFS BILL SEEKS 9.25% TAX
Monday also brought new DFS legislation in New Jersey, although the big DFS operators won’t find it anywhere near as palatable. State Sen. Jim Whelan’s S1927 legislation proposes to tax DFS revenue at a rate of 9.25%, the same rate applied to casino gambling revenue. You know, because it’s gambling.
The bill’s text has yet to be posted online, but according to Whelan’s press release, the tax rate is intended as a democratic gesture, ensuring that there are no insurmountable license fee barriers for smaller operators. Unlike Virginia’s bill, Whelan’s bill explicitly applies only to DFS, leaving season-long operators safe from harm.
There are restrictions on DFS employees and family members playing DFS for money, with fines of up to $200k for violators. But Whelan’s bill stops short of imposing restrictions on high-volume play by DFS sharks, unlike the safeguards for ‘minnows’ recently proposed in Massachusetts. Whelan’s bill also doesn’t limit DFS activity to intrastate play like the DFS legislation he announced last November but never introduced.
The Senate Economic Growth Committee is slated to consider Whelan’s new bill on Thursday at 1pm.