Anyone betting on a fantasy sports regulatory bill to clear its first committee hearing has come up a loser. The House Committee on Regulatory Reform met on Wednesday, May 17, to consider House Bill 279, “Fantasy Sports Regulation.”
The bill’s primary sponsor, Rep. Jason Saine (R-Lincoln), said the bill would bring necessary regulation to a growing industry. He posted on social media in March that the bill had support from the fantasy sports industry.
— Jason Saine (@JasonSaine97th) March 9, 2017
The bill would have required fantasy sports operators to submit evidence satisfactory to the Secretary of State’s Office that procedures are in place to keep employees of the fantasy sports operator and their immediate family members from competing in public games where a cash prize is offered.
Also, there should be procedures to prevent the sharing of information by fantasy contest players gained because of their employment and not known by the public, which could affect the outcome of contests.
One of the provisions of the bill that was touted by supporters in committee was that the operator must establish procedures to verify that a player is at least 18 years of age. Those opposed questioned how practical this is in real life, and how it might be enforced given the nature of the internet.
The bill would also require companies that offered fantasy sports to players in North Carolina to register with the NC Secretary of State’s Office. The bill also would require submission of an initial registration fee equal to 10 percent of the operator’s gross fantasy contest revenues from the previous calendar year – provided, however, that the fee shall not be less $2,500 or more than $10,000.
John Ruston of the NC Family Policy Council told the committee his organization opposes the bill. Ruston said that, contrary to what has been said regarding daily fantasy sports, it is gambling. He said the bill is merely a registration bill for fantasy companies, and has no enforcement capabilities to ensure that children under the age of 18 are not participating.
Under the bill, state Alcohol Law Enforcement agents would be responsible for investigating complaints and enforcing the law.
Stephen Krombolz, CEO of Fantasy Draft, located in Cornelius, NC told the committee that fantasy sports companies are operating well in North Carolina, and encouraged the committee to vote in favor of the bill.
A voice vote was taken that was too close to call, and a vote by show of hands followed. The vote was four in favor and seven against, and the bill failed to pass in the committee. There is a companion bill in the NC Senate, SB 589, sponsored by Sen. Rick Gunn that may yet be heard. Or the language of the bill might appear in the House version of the state budget.