New York DFS Legalization Bill Signed by Governor Andrew Cuomo

The most important time of year for the sports betting and fantasy sports industries in the United States, the National Football League season, is but a month away. Just in time, daily fantasy sports (DFS) has become legalized in the state of New York. In news first broken by Buffalo News Albany bureau chief Tom Precious via Twitter, Governor Andrew Cuomo signed the bill (S.8153/A.10736) on Wednesday, just a day after requesting it be sent to his desk.

The DFS legalization bill passed both chambers of the legislature in mid-June, the final day of the legislative session. It was passed by the Assembly first by a vote of 91 to 22, then by the Senate in the wee hours of the morning, 45 to 17. Though the votes indicate a landslide victory for DFS, it was said to have been a real struggle, with the two major DFS players, DraftKings and FanDuel, going toe-to-toe with the state’s casino lobby.

An online-poker legalization bill was also close to passing at the same time, but it fell short. It easily passed the Senate by a 53 to 5 vote, but died in the Assembly.

DraftKings and FanDuel had withdrawn from the New York DFS market in March 2016 after agreeing upon a settlement in a legal tussle with New York Attorney General Eric Schneiderman. In November 2015, Schneiderman filed an injunction against the two sites, accusing them of several legal violations including promoting gambling, possession of gambling records, advertising fraud, and the violation of both business corporate law and general business law. Schneiderman dropped most of the charges following the March settlement, but according to a statement released by Schneiderman after Governor Cuomo signed the DFS bill, he still plans to continue with the advertising-fraud suits:

As I’ve said from the start of my office’s investigation into daily fantasy sports, my job is to enforce the law and protect New Yorkers from illegal or unscrupulous conduct.  Today, the Governor has signed a bill that amends the law in order to legalize daily fantasy sports contests, with consumer protections for New York players. I will enforce and defend the new law. Our false advertising and consumer fraud claims for past misconduct by Draft Kings and Fan Duel will continue to move forward.

That aside, this is obviously a very good day for the daily fantasy sports industry in the U.S. In announcing the signing of the bill, Governor Cuomo issued a press release, saying, in part, “Daily fantasy sports have proven to be popular in New York, but until now have operated with no supervision and no protections for players. This legislation strikes the right balance that allows this activity to continue with oversight from state regulators, new consumer protections, and more funding for education.”

New York Gov. Andrew Cuomo Marching in 2016 St. Patrick's Day Parade Image credit: Gov. Andrew Cuomo via Flickr

New York Gov. Andrew Cuomo Marching in 2016 St. Patrick’s Day Parade
Image credit: Gov. Andrew Cuomo via Flickr

The Governor’s office estimates that DFS will bring in about $4 million (per year?) for said education funding.

In that same press release, the sponsors of the bill in the New York Senate and Assembly also weighed-in.

“I am pleased that Governor Cuomo has signed the Daily Fantasy Sports legislation into law, allowing thousands of New Yorkers the opportunity to continue playing these games that they have been playing for over a decade,” said State Senator John Bonacic. “With strong consumer protections and economic benefits to the state, I believe this legislation can serve as a model for the rest of the country.”

Similarly excited that this finally got done, Assemblyman J. Gary Pretlow said, “Fantasy sports are more than online games – they have the potential to generate millions of dollars in revenue for New York State. This bill will allow these companies to continue operating while ensuring fans have a safe environment to play in. I am proud Governor Cuomo has signed this legislation to keep fantasy sports in New York and I thank my partners in the legislature for their work in getting this legislation passed.”

Operators who wish to run DFS sites in New York must now apply for and be granted licenses. Those who were operating in the state before last November can apply for temporary licenses in order to get up and running quickly, likely sometime this month. The New York State Gaming Commission already has a web page up where operators can access the temporary permit application; full applications will be available later.

Needless to say, the daily fantasy sports sites are ecstatic. Nigel Eccles, CEO of FanDuel, issued the following statement on his company’s website:

On behalf of more than three million fantasy players across the state and our entire company, we want to sincerely thank Governor Cuomo and members of the state legislature — led by bill sponsors Senator John Bonacic, Assemblyman Gary Pretlow, Senate Majority Leader John Flanagan and Speaker Carl Heastie — for bringing fantasy sports back to New York.

This success in New York speaks to the strength and passion of our players who stood up and made their voices heard — and their elected leaders responded.

New York marks a capstone achievement in a remarkable year for fantasy sports.

Last fall, amidst national controversy, some pundits put fantasy sports on death watch. But when the calendar turned to 2016 and fantasy sports fans had the opportunity to be heard and legislators had the opportunity to act, the dynamic quickly shifted, and one by one states began to recognize this is a game loved by millions – millions who should be able to play and deserve the basic protections afforded to consumers in all major industries.

Since only January, eight states – Colorado, Indiana, Massachusetts, Mississippi, Missouri, Tennessee, Virginia, and now the Empire State – have passed laws clarifying the legality of fantasy sports and creating strong consumer protection regulations. This progress in such a short window of time, during a challenging time for tech companies, is a powerful statement about the extraordinary support for our industry. And we recognize that this success in our home state of New York and our snowballing success across the country is due to the advocacy, efforts, and unbending belief of our players, and we owe them incredible gratitude for their support of fantasy sports.

With the future of fantasy sports affirmed in New York we expect our legislative momentum will only accelerate as more states address the issue. Fantasy sports fans: take comfort; FanDuel’s future is bright.

Eccles also made a separate post, thanking the site’s New York players for their patience and support.

Jason Robbins, CEO of DraftKings, also issued a thank you:

We are thrilled Governor Cuomo has signed the fantasy sports bill and we thank him for his support of this important legislation. We are excited to have our DraftKings contests return to New York and bring the fun and excitement of DFS back to our fans. We would like to thank our hundreds of thousands of New York supporters for their passion and loyalty over the past several months. Your hard work and efforts have made an incredible difference.

We extend our sincere thanks to the members of the legislature who worked to make this happen, especially Senator John Bonacic and Assemblyman Gary Pretlow, who provided tireless leadership on this legislation. We also greatly appreciate the thoughtful leadership of Senate Majority Leader John Flanagan, Speaker Carl Heastie, and Governor Andrew Cuomo. It is because of their hard work and collaboration that fantasy sports are returning to New York this football season.

On behalf of everyone at DraftKings, we look forward to welcoming New Yorkers back and are excited that fans in some of the greatest sports towns in the world will once again be playing the fantasy sports contests they love.

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