The chief executive of FanDuel says that fantasy sports should be regulated, and believes that a bill introduced in Illinois this week could serve as the model for other states looking at how to handle the industry.
“It has become apparent to me that our industry has grown to a size where a more formal, industry-wide approach is needed. To be clear, our industry needs strong, commonsense, enforceable consumer protection requirements to ensure its continued growth and success,” Nigel Eccles wrote in a letter posted on FanDuel Thursday.
“A number of smart, but tough proposals in various state legislatures have begun to emerge, which I believe can serve as the basis for the sensible regulation of the fantasy sports industry,” he wrote.
Eccles doesn’t name any specific states in his letter, but a spokeswoman for FanDuel says that he was referring to Illinois. Earlier this week, Illinois State Representative Mike Zalewski, a Democrat representing a suburban district in Chicago, introduced a bill that would regulate fantasy sports without equating it to gambling.
The bill adds fantasy sports to a list of activities exempted from its gambling laws (others include riverboat gambling, the state lottery, and the possession of old-fashioned slot machines “neither used nor intended to be used in the operation of promotion of any unlawful gambling activity or enterprise”).
It prohibits fantasy sports companies from allowing employees to compete in fantasy sports, from sharing non-public information with third parties that could affect contests, and from mixing entry fees with general operational budgets.
The bill would also requires companies to make it clear how many times people are allowed to enter a single contest and to make sure players don’t get around these restrictions, a response to concerns that high-volume players have undermined the basic fairness of the games.
While it says fantasy sports isn’t gambling, Zalewksi’s bill also requires companies to set up a way for people with gambling problems to lock themselves out of their sites, and makes companies check to make sure people don’t have outstanding child support obligations or tax liens before paying them prizes of more than $5,000.
The bill does not mention taxation.
Meanwhile, New Jersey Gov. Chris Christie says regulating fantasy football is “a stupid idea.”
The governor’s comments Thursday morning on CNN came after he ridiculed the idea during Wednesday night’s Republican presidential debate and seemed to preclude New Jersey from taking action to regulate daily fantasy sports, even as other jurisdictions have done so or considered doing so, claiming they amount to gambling.
The New Jersey governor is also embroiled in a more than three-year battle to overturn a federal ban on sports betting in all but four states.
“They shouldn’t regulate fantasy football,” Christie said Thursday. “It’s a stupid idea.”
During Wednesday night’s debate, Christie chimed in after a debate moderator questioned former Florida Gov. Jeb Bush, who said someone should regulate daily fantasy sports. Christie said that with a crushing debt, unemployment and terrorist threats, the government has more important issues to tackle.
“Are we really talking about getting the government involved in fantasy football?” Christie asked. “Wait a second: We have $19 trillion in debt, we have people out of work, we have ISIS and al-Qaeda attacking us, and we’re talking about fantasy football? Can we stop? Enough on fantasy football, let people play. Who cares?”
This report contains material from Bloomberg News and The Associated Press.