Tuesday was a good day for the daily fantasy sports industry, as Tennessee joined Mississippi in sending a bill to the governor that would legalize and regulate daily fantasy sports (DFS).
The Fantasy Sports Tax Act passed by Tennessee’s Legislature on Tuesday would clarify DFS’s legality in the state, as well as regulating and taxing it, as reported by the Associated Press. It has been exactly two weeks to the day that the office of Herbert Slatery, the Attorney General of Tennessee, issued an opinion stating that DFS is considered illegal gambling under state law. Slatery’s opinion came just one day after Alabama’s Attorney General Luther Strange made the same announcement. Mississippi was of the same opinion; however, it appears that opinion would be rendered moot if the bill becomes law. After Attorney General Jim Hood issued the opinion in February, FanDuel, DraftKings, and other DFS operators pulled out of the state.
Tennessee’s Fantasy Sports Tax Act, which is now on the way to the governor’s office, states that online companies offering the contests must be state licensed. The legislation also generally limits players to monthly bets of no more than $2,500, unless they are able to provide information that shows the limit should be increased. Per the bill, the state would also be allowed to impose a 6 percent gambling tax on fantasy sports operator’s adjusted revenue.
Meanwhile in Mississippi, the regulatory bill was approved by the House on Tuesday and later during the day, the Senate followed suit. Under the bill, DFS operators would be allowed to take users in the state per prescribed regulations until July 2017. During that time, the DFS industry would be studied by a task force and further regulations would be addressed. Different from most bills, if it becomes law the bill would repeal itself on July 1, 2017. At that time if the state wished to it may put more robust regulation in place. In addition, it sets up a Fantasy Contest Task Force, which would “undertake a comprehensive review of the offering of fantasy contests with a fee within this state and to recommend the proper oversight and regulation of the offering of fantasy contests with a fee,” according to Legal Sports Report.
Basic consumer protections, such as an age requirement, and preventing employees of DFS operators and immediate family members from playing, would be implemented under the bill until new legislation is passed in the state. In addition, sites that wish to operate in Mississippi must register with the state, which there wouldn’t be a fee for, for now. And violations of the act would be subject to $10,000 fines. If the new bill isn’t passed by July, 2017, it is presumed that DFS would become illegal in the state again.
The bill now makes the trip to Governor Phil Bryant’s desk.