Daily Fantasy Sports Sites Spending Big on Lobbyists

Love ‘em or hate ‘em, there’s no denying lobbyists can get things done. The fantasy sports industry seems to have figured that out based on a report from the . The report indicates that the industry has already spent somewhere between $5 million and $10 million on lobbying efforts across the United States so far in 2016.

And based on recent news, it looks like their efforts are having an effect. The first couple months of the new year have brought about a string of positive developments on the legislative front. Lawmakers in at least 16 states have already introduced legislation seeking to legalize and regulate the industry. Maryland, California, Virginia, Indiana and Hawaii are just the latest states in which pro-fantasy bills have been introduced.

The Wall Street Journal goes on to explain that FanDuel DFS, DraftKings DFS and the Fantasy Sports Trade Association (FSTA) now have 78 lobbyists active in 34 states. That’s up from a total of just four lobbyists last year. Where last year was full of setbacks and bad news, 2016 has so far been significantly better for the industry. An increasing number of lawmakers are getting on board and crafting legislation with input from the industry.

A quick look at active bills shows that many are written with similar language. Almost to a T, they define “fantasy sports contests” using the same definition as spelled out by the famous UIGEA exemption that allowed real money fantasy contests to escape being classified as illegal gambling.

A majority of these bills also require operators to hold customer accounts in trust accounts, apply for licenses and enforce strict minimum age requirements. It may be no coincidence that the major players in daily fantasy are already well-equipped to adhere to all such regulations.

One of the other key similarities across these various legislative initiatives is a purposeful avoidance of classifying daily fantasy sports as legal gambling. Doing so would trigger the federal Professional and Amateur Sports Protection Act (PASPA) that prohibits states from legalizing sports betting. Instead, the fantasy industry prefers to define the activity as an endeavor of skill.

So if you were wondering what happened to that huge advertising blitz the sites rolled out last year with the beginning of the NFL season, it’s clear they are now devoting their resources to securing the future of daily fantasy sports in the US. As nice as I’m sure it would be to be spending that money on advertisements and promotions, there have to be priorities. All the customers in the world won’t do much good if daily fantasy finds itself on the wrong side of the law.

Of course, the industry still has plenty of challenges to overcome.

A handful of state attorneys general have already issued opinions that call fantasy sports contests a form of illegal gambling. The ongoing legal battle in New York is especially worrisome with Attorney General Schneiderman not only demanding that fantasy sites cease all operations, but that they also refund all former customers.

Additionally, numerous public figures (ranging from lawmakers to comedian Bill Burr) scoff at the idea that real money fantasy sports apps could be anything but sports gambling. That combined with last year’s data leak scandal have done little to bolster the industry’s image among the general public. At a time in which most businesses would be focusing on building the brand and making money, the major fantasy sites are spending serious cash in an effort to simply avoid prohibition.

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