New Jersey Senator Jim Whelan has introduced legislation to regulate daily fantasy sports (DFS) in the state.
The bill differs from bills introduced in other states, which have tended to simply set consumer protection standards and propose nominal fines for individuals and companies that breach the regulations.
It would set a tax rate of 9.25 per cent of gross revenue on DFS games, equivalent to the rate paid by land-based casinos, and sets fines of $200,000 for violations of the regulations – much higher than the $1,000 set in other states.
S1927 also prohibits employees of DFS companies and their immediate family members from entering contests and sharing insider information with others.
The New Jersey Department of Law and Public Safety would oversee and regulate DFS, issuing licences to casino licensees and other entities that would like to operate daily fantasy sports contests in the state.
“Since announcing our efforts to regulate daily fantasy sports, I have spent the last few months meeting with regulators, players, and daily fantasy sports officials,” Whelan said. “Now, I can confidently say that we have a good bill that puts important consumer safeguards in place while not impeding people’s ability to play and enjoy daily fantasy sports.”
Whelan has been preparing to introduce the legislation since November last year, arguing that an insider trading scandal involving market leaders FanDuel and DraftKings highlighted an urgent need for stricter regulation of the industry.
The bill has been designed specifically for daily fantasy sports and will not affect season-long fantasy games, which have not been subject to the same level of regulatory scrutiny. The bill does not ring-fence contests in the state, allowing New Jersey residents to compete against players in other states.
“As I have said from the beginning, New Jersey can be a model for the rest of the nation on how to effectively and efficiently regulate daily fantasy sports,” Whelan explained. “This bill protects consumers while at the same time creating an efficient regulatory environment so these companies can expand in New Jersey and create jobs.”
The bill is to be discussed in the Senate State Government Committee, chaired by Whelan, on Thursday March 10th, and its full text is yet to be published.