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The Discussion of Fantasy Sports Legality in California

January 16, 2016

Earlier, his month, California became a trailblazer in the national legal discussion on regulation of the daily fantasy sports industry. Passage of bill AB 1437 by the Governmental Organization Committee makes the Golden State the first in the country to not only act on an introduced bill, but also to have that bill succeed. What’s more, it received near unanimous support (earning 17 yes votes and 1 no vote) from the participating assembly members.

The bill authorizes the distribution of licenses for fantasy sports companies with a variety of responsible provisions. For example, licensed companies may not allow players to create more than one account each; they may not advertise through media outlets that cater to an under-21 audience, or to portray images people under the age of 21, or high school or college students, in any advertisements; they may not extend credit to players, potentially setting the traps that so often end in the destructive financial cycle of the gambling addict.

AB 1437’s author, Assemblyman Adam Gray, D-Merced, argues that the bill is as much for protection of Californian fantasy sports participators as it is for legal protection for the companies that service them. “Millions of our constituents in California [are] participating in this activity now, today, unprotected. Nothing in place to guard against some of [the] dangers we know exist. We have an obligation to move forward,” he said.

The bill’s singular “no” vote—Assembly member Marc Levine, D-Marin County--wrote a letter to Attorney General Kamala Harris last November, requesting her explicit action prohibiting all fantasy sports companies in the state. The letter implores her office to “take action to order Fan Duel, Draft Kings and other fantasy sports betting websites to immediately discontinue business in California.” The letter specifically cited Section 19801 (d) of the Business & Professions Code, which states that “...no person in this state has a right to operate a gambling enterprise except as may be expressly permitted...”

“This is gambling. There’s no doubt about it. Let’s not fool ourselves. An entry fee is a wager; cash prizes are gambling winnings; [companies such as FanDuel and DraftKings] are bookies,” he said.

Despite his opposition to this bill in its current form, Levine still reportedly believes in the ultimate regulation of online fantasy sports betting.

 


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