North Carolina daily fantasy sports legalisation bill fails

News on 18 May 2017

Hopes that North Carolina would join the growing number of US states that have legalised daily fantasy sports were dashed this week when HB279 failed to make it through the House Regulatory Reform Committee on a negative 4 vs. 7 vote.

Supporters of the bill failed to convince their colleagues that DFS is a skill game and therefore falls outside the state’s definition of gambling.

HB 279 would have required operators to register with the Secretary of State, pay registration fees, and give that department and the state Alcohol Law Enforcement the authority to enforce the law.

The legislation would have also included protections, including prohibiting those younger than 18 from playing, prohibiting league operators or their families and employees from participating, and ensuring operators maintain enough money to pay out prizes.

Bill sponsor Rep. Jason Saine, a Republican, claimed there are 1.6 million fantasy sports league players in North Carolina.

A companion bill in the state Senate has yet to be allocated to a committee.

In related news, and moving across to the state of California, a US District Court has ruled that entry fees for horseracing fantasy contests are the equivalent of real-money wagers under the Interstate Horseracing Act (IHA) of 1978 and constitute gambling.

The ruling is a setback for Horse Racing Labs, the Kentucky-based parent of horseracing fantasy operator DerbyWars, which was defending a 2015 case brought against it by racetrack owner Stronach Group.

Stronach claimed that DerbyWars violated the provisions of the IHA by offering wagering without a licence and failing to cut Stronach in on its revenues.

Judge James OItero found that DerbyWars was de facto operating an off-track betting system in its California operations, opening the company up to compensation claims by Stronach and a possible injunction by the racetrack owner.

DerbyWars chief executive Mark Midland said in a press statement that the ruling was disappointing and that he was consulting with company legal advisers on whether to appeal.

Stronach spokesman Scott Daruty appeared to appreciate the potential of fantasy horse racing (providing racetrack owners get a cut), acknowledging to an industry publication that the product is clearly popular and has potential, provided that it does not adversely impact established racing industry economics.

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