Proposed law would make fantasy sports a reality in Ohio
The following article can be found in its original form at this link from The Columbus Dispatch:
The Columbus Dispatch: Alan Johnson, March 30, 2017
Two state lawmakers want to make fantasy sports a legal reality in Ohio.
Reps. Jonathan Dever, R-Madeira, and Robert McColley, R-Napoleon, sponsors of House Bill 132, say it would provide consumer protection for Ohioans who participate in fantasy sports and regulations so “the industry operates in a transparent and accountable manner.” The Ohio Casino Control Commission would oversee fantasy sports, which would be legally regarded as a game of skill rather than gambling.
“Each day, countless Ohioans participate in daily fantasy sports,” Dever said in a statement. “House Bill 132 assures that these participants are protected under the law, while increasing the accountability of fantasy-sports operators.”
Dever said he doesn’t participate in fantasy sports, but many of his friends do and they brought the issue to his attention.
“Most of the operators we talked to in crafting the legislation are interested in having reasonable rules,” he said.
The proposal, which has not yet had a public hearing, would update state law to “make it clear fantasy sports are legal in Ohio and install important consumer protections.”
It also would bring in some money for the state. The bill would require operators who pay winnings out to players to pay a $30,000 registration fee and a renewal fee of up to $30,000 for three years. Indiana’s fantasy sports law charges a $50,000 licensing fee and $5,000 renewal fee. New York’s law assesses an income-based fee of 15.5 percent.
Ohio would become the 10th state to legalize fantasy sports, which now fall into a gray area of the law. The federal Unlawful Internet Gambling Enforcement Act of 2006 made online betting illegal, but exempted fantasy sports. Fantasy sports gambling is banned in Arizona, Iowa, Louisiana, Montana and Washington.
Fantasy sports are a big deal, as anyone will tell you who participates in a football or other pro-sports fantasy league. In recent years, it’s rapidly evolved into a big moneymaker, too, with businesses such as DraftKings and FanDuel and hundreds of smaller companies springing up to meet the demand.
Generally, there are two types of fantasy sports: free-entry leagues, which don’t pay out winnings and operate through sites such as ESPN, Yahoo and Fox Sports, and paid-entry leagues that do pay winnings.
Participants typically pick players for their teams through a “draft,” then accumulate points based on the performances by the actual athletes. It is most popular with the National Football League.
At least 56 million people are estimated to participate in fantasy sports; experts say the vast majority play in free-entry leagues.
Jeff Thitoff, who hosts the Fan Fantasy Football Show on Sundays during football season on WBNS-FM radio, said he considers fantasy sports gambling.
“There is skill involved, but it’s not quite on that level. There’s certainly luck involved as well.”
Thitoff said he has not seen the proposed law, but supports the idea to keep fantasy sports on the up and up.
Dever and McColley’s bill would require fantasy game operators to get a state license, prohibit games based on high school or college sports, mandate that fantasy players be at least 18 years old, require “highly experienced players” to be identified in all games and protect the privacy of players and accounts.
Steven Brubaker, executive director of the Small Businesses of Fantasy Sports Trade Association, represents many of the 25 or 30 fantasy operators in Ohio. Most are small operations.
“People can play contests every single day in the daily format,” Brubaker said. “There’s more money to be made there.”
But revenue doesn’t add up nearly so quickly in seasonal sports such as the NFL, where games are played once a week.
“We don’t have any problems with consumer protection,” Brubaker said of the proposed law. “They are our customers.”
But he said high registration and renewal fees, coupled with mandatory annual compliance audits in the bill, likely would prevent small operators from doing business in Ohio.