Daily fantasy sports operators DraftKings and FanDuel have announced their exit from the Alabama market ahead of the state attorney general’s deadline for doing so.
On April 5, Alabama AG Luther Strange sent letters to the two DFS operators, ordering them to cease and desist all real-money activity with state residents as of May 1. On Friday, the AG’s office issued a statement saying the operators had reached a settlement to comply with Strange’s order as of May 2.
Strange said both operators had agreed to block customers with Alabama IP addresses from accessing paid fantasy contests on their websites and to process Alabama customer account withdrawal requests within seven business days of receiving such requests.
FanDuel issued a statement to its Alabama customers maintaining the company’s belief that it had “always operated within the law in Alabama” and would be “working hard to clarify the law in Alabama with the aim of bringing our contests back to the state at some point in the future.”
The companies’ Alabama amscray follows their recent exit from New York, where the AG was equally insistent regarding DFS’ illegality. The two operators haven’t always moved in lockstep to comply with AG rulings on DFS, as FanDuel struck a deal to exit Texas while DraftKings opted to file a court challenge protesting the Texas AG’s GTFO order.
TENNESSEE GUV SIGNS DFS BILL INTO LAW
Strange’s C&D letters to the operators were followed one day later by his counterpart in Tennessee issuing an opinion that DFS was agin’ his state’s laws. However, the Tennessee legislature subsequently approved measures to amend the state’s definition of what constitutes gambling and allow DFS companies the opportunity to acquire licenses to operate in the state.
The Tennessee legislation, which was signed into law by Gov. Bill Heslam this week, gives DFS operators until July 1 to either apply for licenses or exit the market. Should they opt for licensing, operators will face a 6% tax on their revenue from Tennessee customers, as well as as yet unspecified license fees.
Heslam’s signature marks only the third time that a state governor has approved pro-DFS legislation since the DraftKings’ data leak scandal last October turned the industry on its head. Virginia and Indiana’s governors each signed their respective DFS bills into law in March.
