Washington State Daily Fantasy Sports Leagues to Get New Consideration in 2016

Washington State, renowned for its hostile legal attitude towards any forms of online real-money gaming, may very well be on the path towards legalizing betting on daily fantasy sports. On January 13, the bill describing the legal framework for regulated daily fantasy sports was introduced into the Washington House of Representatives.

Washington State is famous for being one of the only six states where no daily fantasy sports companies currently operate. In other states, fantasy sports are differentiated from traditional gambling because they are considered to be more strategic than random. According to the text of the bill, “it is the intent of the legislature to [similar to other states] classify fantasy sports as contests of skill, rather than gambling.” HB 1301 seeks to exempt daily fantasy sports leagues from “any classification of gambling.”

Existing Washington laws describe serious penalties for any person who “knowingly transmits or receives gambling information by telephone, telegraph, radio, semaphore, the Internet, a telecommunications transmission system, or similar means,” so avoiding gambling classification means sidestepping some serious consequences. At present, all online gambling in Washington is a Class C felony, meaning consequences of a $10,000 fine and up to five years prison time.

Although no individual has been unfortunate enough to suffer this penalty, at least one fantasy sports company has already been driven out of operation. The fantasy NASCAR website Fantasy Thunder was shut down in 2011 when Washington State Gambling Commission agents raided the company’s founder’s home. The company had been operating for more than a decade.

Susan Newer, member of the Washington State Gambling Commission, said that “the legislature will be the one to decide who would license and regulate DFS if it is legalized.”

While HB 1301 seeks to have daily fantasy sports authorized, licensed and regulated, another bill introduced during the same session threatens to do the exact opposite. HB 2730 would explicitly classify daily fantasy sports leagues as forms of gambling, thus entitling them to the same Class C felony status in Washington for play, operating, or advertising.