Inside Asian Gaming

inside asian gaming september 2016 68 Gambling and the law there never was a year when seven states legalized state lotteries. The lobbying by proponents of DFS worked out, especially in New York. SB 8153 not only sets up a system of registration, regulation and taxation, it allows DFS operators to continue to take players while the system is being put in place. The new law, like the ones preceding it, focuses mainly on consumer protection. But it will also raise revenue for the state through what amounts to a US$50,000 registration fee and a tax of 15%on gross gaming revenue. The requirements to be found suitable, as well as the registration fee and tax, will help keep out fly-by-night operators. Of course, these will also be barriers protecting the duopoly of FanDuel and Draft Kings from having to face competition. The New York Legislature dealt with the tricky question of whether DFS is predominantly chance by simply declaring it a contest of skill. The first words of the new law read: Legislative Findings and Purpose. 1. The legislature hereby finds and declares that: (A) interactive fantasy sports are not games of chance because they consist of fantasy or simulation sports games or contests in which the fantasy or simulation sports teams are selected based upon the skill and knowledge of the participants and not based on the current membership of an actual team that is a member of an amateur or professional sports organization. The federal government is technically not bound by the decisions of the state legislatures or even official findings that DFS is a contest of skill. For example, Nevada and the federal government do not agree on the definition of “lottery.” Nevada’s State Constitution still prohibits lotteries, yet the State Legislature has authorized the games of keno and bingo to be played throughout the state’s licensed gaming facilities. Today, players can buy a year’s worth of keno tickets in advance. The federal Internal Revenue Service (IRS) considers those advance keno tickets as lotteries, which are subject to different tax laws from casino gaming winnings. There is no requirement that the IRS and the state of Nevada agree on a legal definition of “lottery.” If there is a conflict between how DFS “When asked in the Debate about the dangers that DFS create and what the federal government should do about them, Jeb answered by discussing his own fantasy football team!” New England Patriots quarterback Tom Brady is a popular pick in DFS teams The New York Legislature could have simply authorized DFS. No one claims that state lotteries are games of skill. Once they are made legal, sometimes requiring an amendment of the state constitution, the question of skill versus chance becomes irrelevant. But having DFS declared to be not only legal and regulated but not gambling was necessary under state law. The New York Constitution expressly forbids the legalization of gambling, with the obvious exceptions of the state lottery, parimutuel betting on horse races and “racinos.” It also helps operators avoid federal laws, which are almost always limited to gambling operations. This will be especially useful when states start pooling DFS players.