The latest draft of proposed rules to govern fantasy sports in Colorado further limits companies that offer pick’em-style contests, causing an attorney representing two fantasy companies to question how the previous rules were far less restrictive.
The proposed rules were the subject of a public hearing Monday (October 30) before the Colorado Division of Gaming, with a draft released on Friday now clarifying that contests where players compete against the operator itself would no longer be permitted.
The draft rules read that: "Fantasy contests are contests where patrons compete against other patrons. Fantasy contests where patrons compete against fantasy contest providers are prohibited.”
A previous draft of the rule would have prohibited only “parlay-style wagers that are stacked wagers on single athletes against fantasy contest providers.”
The new rules also clarify that fantasy contests must include the selection of two athletes or positions and the outcome of the contest must be based on “adding together the fantasy points from at least two athletes or positions.”
Josh Kirschner, an attorney representing fantasy operators PrizePicks and Sleeper, told Colorado regulators that the rule as proposed was incompatible with state law.
“It appears to look as if the rulemaking process looked at rule 15 for sports wagering and tried to draw a fence around that instead of applying proper administrative procedure and making rules pursuant to the statute,” Kirschner said.
Kirschner also criticized the rapid changes during the rulemaking process, pointing to the initial draft of fantasy contest rules released ahead of a September 1 workshop that was far less restrictive, not only allowing players to compete against the operator but also still allowing for some type of proposition-based contests.
“I would lament, candidly, this division going from one of the most progressive in the nation in terms of what it allowed and recognized as fantasy sports, to one of the most restrictive regimes in the nation who have now codified a version of fantasy sports that seems to stop recognition at and around 2016, and intimates that there have been no newer versions of this game, there are no newer contests that fans seem to enjoy since that time.”
The tighter rules on proposition wagering had been pushed for by FanDuel and DraftKings in the latest chapter of what has become a heated, multi-state lobbying war between the two daily fantasy and sports-betting giants and a coalition of upstarts who offer the pick’em-style games.
“There are significant differences in the regulatory requirements of sports-betting operators versus fantasy contest operators, consumer protections, and the taxation of the two products,” said Andrew Winchell, director of regulatory affairs for FanDuel, in written comments filed in support of the proposed Colorado rules.
“As such, it is important to ensure that fantasy contest operators are not offering contests that are, by their nature, sports wagering,” Winchell wrote.
Written comments can be submitted on the rules through Friday (November 3).
Division of Gaming officials did not give any further comment on the rules during Monday’s hearing, and a date for potential approval of the rules has not been set.