New York Proposal To Expand Daily Fantasy Sports Dies In Committee

June 12, 2023
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As the 2023 session ended on Saturday, the New York legislature declined to consider a measure to expand the number of approved daily fantasy sports operators in the state in advance of formal regulations to govern fantasy sports licensing.

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As the 2023 session ended on Saturday (June 10), the New York legislature declined to consider a measure to expand the number of approved daily fantasy sports (DFS) operators in the state in advance of formal regulations to govern fantasy sports licensing.

Senate Bill 4815, authored by Senator Joseph Addabbo Jr., a Democrat, would have allowed DFS companies that were not operating in the state prior to November 10, 2015, to apply for temporary permits to offer games in New York state pending approval by the New York State Gaming Commission (NYSGC).

As a result of an existing 2016 law, the fantasy sports industry and contests available to consumers in New York have been limited, according to a summary of the bill.

There are 15 companies currently authorized with temporary permits in New York, including Yahoo, FanDuel and DraftKings.

NYDFS

The bill had advanced to its third reading in the Senate but before the chamber adjourned on Saturday was referred to the Senate Rules Committee. If approved by the Senate, Addabbo's bill would still have to be approved by the state's Assembly.

Addabbo, who is also chairman of the Senate Committee on Racing, Gaming and Wagering, introduced a similar bill, Senate Bill 8628, during last year’s legislative session but died at the committee stage.

Fantasy sports was deemed constitutional in the state by a 4-3 vote by the New York Court of Appeals on March 22, 2022, after a long legal battle. In the decision written by Chief Justice Janet DiFiore, the Appeals Court ruled that under a 2016 state law, DFS was a game of skill as opposed to a game of chance.

Addabbo’s support for expanding the number of DFS operators in the state comes at the same time the gaming commission is gathering one last 60-day round of comments on its latest amended DFS regulations.

The final public comment period that is scheduled to conclude at the end of the month.

Overall, there were approximately 45 suggested revisions within the last set of public comments and NYSGC staff suggested nearly one-third be accepted.

NYSGC executive director Robert Williams noted that many of these changes are substantial revisions, which is defined as any addition, deletion or other change in the text of a rule proposed for adoption which materially alters its purpose, meaning or effect.

Among industry comments on an initial set of draft rules published in March included Vivid Seats seeking to remove proposed language to prohibit any contests "based on proposition betting or contests that have the effect of mimicking proposition betting."

FanDuel and DraftKings submitted initial comments questioning language to require NYSGC pre-approval of different fantasy contest types, while Yahoo Sports objected to language that would require any owner or investor with more than 10 percent of an operator to undergo a background investigation.

FanDuel, DraftKings and other groups also submitted comments on a proposed requirement for New York fantasy sports operators to have formal anti-money laundering programs.

Casino Relief

Elsewhere, Senate Bill 4817 providing relief to Vernon Downs casino in upstate New York was passed by the Senate on Friday (June 9), sending it to Governor Kathy Hochul, a Democrat, for her signature.

Current law mandated that Vernon Downs forfeit its additional vendor fee because it was not able to maintain at least 90 percent of full-time equivalent employees as employed in 2016. The bill would waive this condition, which would allow the harness track and casino to continue to operate.

Owner Jeff Gural had posted a WARN notice, which state and federal regulators require employers with more than 50 people to give in advance of layoffs that will last six months or more. Vernon Downs employs 249 people.

Gural could not be reached for comment.

“In 2017, I sponsored and passed legislation to help Vernon Downs because I recognize, understand and appreciate the important role that the facility plays in the region,” Republican Senator Joseph Griffo, who co-sponsored the bill with Addabbo, said in a statement following the Senate’s approval of SB 4817.

As a result of the bill, Griffo said, Vernon Downs will “once again receive additional support and assistance to remain operational.”

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