ST. PAUL, Minn. -- A bill recognizing daily fantasy sports as legal in Minnesota, and setting up consumer protection rules for that activity, moved ahead Thursday at the State Capitol.
Supporters asserted it's happening anyway, so it ought to be regulated. Opponents argued the State shouldn't codify something they view as a new, viral form of gambling before the courts settle the issue.
The House Public Safety Committee heard from both sides on the daily fantasy sports, or DFS, issue.
"If you kill this bill the State has no say in how these operate, and it continues to be legal," Paul Charchian of Plymouth, who heads the Fantasy Sports Trade Association, told legislators.
"If you pass this bill the state has a framework for regulation the industry and ensuring fair play by the state’s measures."
The regulations in the bill, authored by Rep. Tony Albright, include setting age restrictions and barring athletes and insiders at sports fantasy company employees to play the games.
Charchian, who hosts a fantasy sports show on KFAN radio, went to great lengths to explain the difference between that hobby and betting on games of chance.
"On my show I break down player trends, defensive schemes, coaching biases, weather, field surfaces, injuries, historic trends against opponents, playing time, projected playing time for each player, statistical modeling. All of that goes into just figuring out is Sam Bradford going to have a good game!"
Scott Ward, a Washington DC based attorney who represents the two largest fantasy sports sites, FanDuel and DraftKings, noted that the performance of athletes is far more predictable than the casino games.
"Most often when somebody tells me they don’t play fantasy sports the reason they give me is because they simply don’t have the time to do it," Ward explained. "And that’s because there’s an inherent understanding that it take time, it takes research, and it takes skill to play fantasy sports."
He said fantasy sports games are less susceptible to fraud because success is based on the individual performances of a group of athletes, instead of the outcome of the game.
Opponents see DFS as a looming source of gambling addiction, especially to tech savvy younger persons.
"If we were talking about season long fantasy sports we wouldn’t be here. Nobody has ever questioned the legality of season long fantasy sports," Jake Grassel of Citizens Against Expanded Gambling, told legislators.
"How often does somebody come asking to be regulated by your committees? Very rarely."
Grassel compared the business model of the DFS industry to book making companies, or those who host poker games.
"You take entry fee, you post a game, you keep a 'vig' or a rake, and you pay out prize money. That’s how they make money."
He said the Albright bill would not only give DFS legal standing in Minnesota, but would also legalize bettig on eSports, which is growing in popularity for college aged players.
"We’re talking about literally betting upon people playing video games. That’s very alarming to us."
Anne Krisnik of the Joint Religious Legislative Council said the speed of daily games, and the technology involves, can create addiction hazards.
"There are very hard working families that are hurt by gambling. We’re particularly concerned about younger Minnesotans, when we see how they’ve already begun using video games, and how computer savvy they are."
She pointed out that the House research office said the question of legality hasn't been settled yet, and urged lawmakers to let the courts make those decisions.
Charitable Gaming competition
A third distinct viewpoint came from Allen Lund, the president of Allied Charities of Minnesota, which is made up of the state's charitable gaming enterprises.
"We would just ask that there be fairness, and a level playing field with regards to the licensing, regulation, and specifically taxing of these dollars," Lund said. "
He said traditional charitable gaming operations are taxed at a rate seven times that of the corporate tax rate in Minnesota. And his group is made up of local civics clubs, police and firefighter foundations and a host of nonprofits that at times struggle to make ends meet and deliver revenue to youth activities.
The committee passed Albright's bill on a voice vote, meaning there is no record of a roll call, and referred it to the House Ways and Means Committee.