Only Nine Days are Left in the State Legislative Session – and with No Action the Future of Fantasy Sports in New York will Remain in Limbo
Today a group including the Brooklyn Chamber of Commerce, Fantasy Sports For All and representatives from New York tech firms and fantasy sports operators held a press conference on the steps of City Hall to urge state lawmakers to pass fantasy sports legislation. There are only nine days left in this legislative session, and without a new law the future of fantasy sports – along with three million players and nearly 30 businesses – will remain in limbo. The group called on the legislature to pass a new law that would update the state’s outdated statutes to affirm the legality of fantasy sports contests and to install strong consumer protections, ensuring all games are fair and players in the state are protected.
New York State is central to the growing fantasy sports industry, which has exploded in recent years and now employs hundreds of New York residents. If the legislature fails to act, the state will forfeit this economic opportunity and disappoint millions of New York sports fans that regularly participate in fantasy contests. The press conference was convened by Fantasy Sports for All, an organization dedicated to promoting the right to play fantasy sports, and attendees included: Carlo Scissura, President of the Brooklyn Chamber of Commerce; Nik Bonaddio, co-founder and CEO of NumberFire – a New York-based startup focused on fantasy sports analysis; Lou Maione, CEO of the FNTSY Sports Network – a New York fantasy sports media company; Jeremy Levine, founder of Draft, a New York-based new fantasy sports company, Gordon Silvera, an analytics team member at FanDuel; and Javier Vargas, Director of Strategic Ventures at DraftKings.
“States across the country are racing to take advantage of the fantasy sports boom, with six states already passing bills this year and another 20 moving legislation,” said Carlo A. Scissura, President & CEO of the Brooklyn Chamber of Commerce. “It’s not just companies that offer fantasy games that are growing, but data, analytics, analysis and media companies related to fantasy sports that are also attracting investments, expanding and creating jobs. It is vital that we ensure New York does not get left behind and miss a major economic development opportunity. We are home to every major professional sports league and a very strong technology sector – making this the perfect home for the fantasy sports industry.”
“I started my company here in New York because I believe New York is where you can find the most talented and ambitious people,” said Jeremy Levine, founder of Draft. “With a thriving innovation economy and a great sports history, New York is the logical home for the fantasy sports industry, but companies like Draft are not going to be able to startup and grow if the state does not embrace fantasy sports.”
“We have three studios and two offices in New York, with dozens of employees,” said Louis M. Maione, CEO of the FNTSY Sports Network. “As an entrepreneur, I can relate to the businesses that our New York friends in the industry — from Rochester to Brooklyn — have started. If the legislature doesn’t act in the next nine days, New York is going to miss a major opportunity. We’re proof positive of what can be built in New York.”
“The advent of the daily fantasy sports industry has allowed me to pursue the intersection of my two passions: sports and technology,” said Javier Vargas, Director of Strategic Ventures at DraftKings. “And I could do so by staying in the city that I love, New York. I am hopeful that the legislature will introduce legislation that will allow me to continue to contribute to this exciting and growing industry.”
“I think we’re a classic New York tech story. I founded the company here, we received venture capital here, we found amazing employees here, and we were acquired here,” said Nik Bonaddio, CEO and co-founder of NumberFire. “New York is where it happens: the ideas, the energy, the access to media and huge companies. I hope the state will be welcoming to more companies like ours and we see more of us grow and build in New York.”
“I moved to New York from Cincinnati three years ago because of the opportunities in the tech sector here,” said Gordon Silvera, an analytics team member at FanDuel. “I saw an incredible tech company in FanDuel that has a focus on the data and analytics work I love. I’m hoping New York will continue to be friendly to the growing tech fantasy sector and keep creating opportunities like the one I got.”
Status of Fantasy Sports in New York
The two largest daily fantasy sports companies, DraftKings and FanDuel, reached an agreement in March with New York State Attorney General Eric Schneiderman to suspend pending legal actions until September and the companies agreed to halt offering fantasy games in New York for the time being. This agreement created a window of opportunity for the legislature to act and clearly define fantasy sports as legal. But that window is rapidly closing, with only nine days left in the legislative calendar. If the legislature does not act, the future of fantasy sports in New York will be in limbo.
Here is how and why the legislature should act:
Establish Legal Clarity:
It’s time for the state to update its laws with clear definitions that reflect the realities of technological evolutions and establish defined legal clarity for fantasy sports in New York
New York’s laws are outdated, contain some ill-defined provisions and this issue could end up being litigated for years, leaving the state in a messy limbo where either: fantasy are played in New York with no regulations whatsoever or New Yorkers are deprived of playing fantasy sports.
The solution is for the legislature to act and establish legal clarity. It’s a relatively easy statutory fix, and six states have already passed laws this year accomplishing legal clarity.
New York needs strong regulations to protect consumers.
Fantasy sports has grown into a major industry, and like any major industry with broad consumer usage — from restaurants or bars to movie theaters or salons — there should be basic rules of the road that companies are obliged to follow.
Establishing clear, firm regulations all operators must abide by will protect players and help the industry as a whole.
Any legislation should achieve the following goals:
- Establish legal clarity by clearly defining fantasy sports as legal in New York State.
- Require all fantasy sports operators to:
- Ensure players are 18 and above;
- Keep player funds separate from operating funds, ensuring player money is accessible at all times:
- Ban employees and family members of fantasy sports companies from playing;
- Require “highly experienced players” to be clearly identified for all users to see;
- Restrict access to non-public information that could impact fantasy contests;
- Ban games based on college or high school athletics; and
- Require registration with the state and some form of audit that is submitted to the state each year.
New York Should be the Home of Fantasy Sports
New York State should be an incubator for this growing industry, and the home of fantasy sports.
The state is home to every major professional sports league and is a natural fit to be the leader of the exploding fantasy sports industry as a part of the state’s tech ecosystem.
It’s not only fantasy sports game operators that are growing, but the explosion in popularity of fantasy sports has given birth to a new breed of tech companies, focused on data, analytics and analysis related to fantasy sports.
New York State currently has nearly 30 fantasy-related companies (including 200 employees from the industry leaders, DraftKings and FanDuel), and that number of companies can and will grow if the legislature votes to update the laws surrounding fantasy sports. There is a real economic opportunity to be gained, but the state will miss the opportunity if legislation does not pass.
About Fantasy Sports for All
Fantasy Sports For All is a nonprofit organization dedicated to protecting the right of all Americans to play in fantasy contests. FSFA works with grassroots leaders in the industry to advocate for regulation that affirms the legality of fantasy sports and sensible regulations that protect players and safeguard the integrity of the games that fans have grown to love. FSFA received its initial funding from DraftKings and FanDuel and is supported by individual players and fantasy sports operators across the country.