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Fantasy sports lobbying faces final deadline in NY

Facing an end-of-session deadline this week, legislators in New York are closing in a compromise bill that would legalize daily fantasy sports in that state, allowing DraftKings Inc. and FanDuel Inc. to return to one of the most important markets for the nascent industry.

The legislation would regulate and tax fantasy games while clarifying that they are not considered illegal gambling under state law. But if the bill isn’t passed before the Legislature adjourns June 16, then New York Attorney General Eric Schneiderman will likely resume his legal battle to permanently block DraftKings and FanDuel from the state.

The two companies had agreed to suspend operations in the state, while Schneiderman holds off his case, to allow lawmakers to consider legalizing daily fantasy sports. Schneiderman sued DraftKings and FanDuel last year, asking a judge to shut the companies down for violating New York’s gambling laws

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New York is the industry’s second-largest market, producing an estimated $267 million in entry fees in 2015, according to industry analyst firm Eilers & Krejcik Gaming.

Details in Albany have been changing daily as the Legislature heads toward adjournment. On Wednesday, lawmakers weighed a revamped version of the fantasy sports bill jointly sponsored by the gambling committee chairmen in both the Assembly and Senate, signaling a compromise among legislative leaders. Any bill would still have to be signed into law by Governor Andrew Cuomo.

The most recent version under consideration as of late Wednesday afternoon included:

■   Oversight by the State Gaming Commission.

■   A 15 percent tax on gross revenues and an additional tax of 0.5 percent of revenues, with a $50,000 annual cap.

■   FBI criminal background checks for officers or directors of a fantasy sports company.

■   Consumer protections, including identification of highly experienced players and limits on the number of entries each player can make in a contest.

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■   Contests based on college or high school sports or horse racing would be banned.

Those provisions are beyond what Massachusetts has adopted for daily fantasy sports games. Regulations enacted by Attorney General Maura Healey earlier this year focused mostly on consumer protections, and the state Legislature so far has not pushed to impose taxes or fees on the companies.

Elsewhere around the country, the fantasy sports industry is running a multimillion-dollar lobbying campaign to pass favorable laws. It has succeeded in six states so far: Colorado, Indiana, Mississippi, Missouri, Tennessee, and Virginia.

But the stakes in New York were the highest yet. An industry lobbying group, Fantasy Sports for All, said fantasy enthusiasts had sent nearly 72,000 e-mails to legislators urging the state to pass the law.

“Time is running out!” the website blared. “Contact your legislators now!”


Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.