California gives daily fantasy sites a boost

The current state of affairs regarding whether or not daily fantasy sports constitute gambling has been causing the companies offering such services major issues in recent times, with numerous investigations ongoing.

The likes of DraftKingsFanDuel and others have been given a lift though, with the state of California having taken a step to permitting, taxing and regulating the industry. fanduel

Other states such as Nevada ruled to ban it entirely, whilst the likes of New York, Illinois, and Washington the debate over whether it’s a game of skill or it’s gambling is ongoing.

In the case of California, an Assembly committee approved a bill on Wednesday that would allow daily fantasy sports companies to operate in the state if they obtain a license and pay an annual regulatory fee.

Site operators would have to pass a background check. They’d also need to pay taxes on their profits and report player winnings to the state. Those winnings would then also be taxed. Licensed operators would be responsible for determining that players are eligible adults and that there is no fraud in the games.

Governmental Organization Committee Chairman Adam Gray said: “In California, we have an opportunity to lead the way … to balance consumer protections with consumer demand for daily fantasy sports.”

He added: “AB 1437 will put in place safeguards to ensure games are fair, prohibit underage usage, guard against identity theft and ensure that consumers are competing on a level playing field.”

Screen Shot 2016-01-08 at 11.50.09 AMReports from consulting firm Eilers Research estimate that daily fantasy games will generate about $3.72bn (£2.5bn) in entry fees and $370m (£253.2m) in revenue in 2016, of which Gray stated California generates about 15%.

Assemblyman Marc Levine (D-San Rafael), was the sole member of the 18 strong committee to vote against the bill. He said that to gain approval it must be submitted to the voters.

Levine said: “Gambling in California has been approved by voters since 1933.”

Thanks to the LA Times for this story.

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