A House Energy and
Commerce subcommittee will meet today in the US capital to look at the legality
of daily fantasy sports (DFS).
The hearing was
requested last September by New Jersey Congressman Frank Pallone, a ranking
member of the committee, to investigate what he sees as the “blurring of the
lines” between fantasy sports and online betting.
Pallone has been a
prominent supporter of legalised and regulated sports betting in New Jersey and
has questioned the involvement of major US sports leagues in the DFS industry,
which is in stark contrast to their opposition to legalised sports betting.
“Fans are currently
allowed to risk money on the performance of an individual player. How is that
different than wagering money on the outcome of a game?” asked Pallone when he
announced his call for a congressional hearing.
None of the major DFS
operators will be present at the hearing, although they will be represented by
Peter Schoenke of the Fantasy Sports Trade Association.
The committee will
also hear testimony from rival trade association the Small Business of Fantasy
Sports Trade Association, represented by executive director Steve Brubaker.
Brubaker is appearing
before the committee to speak on behalf of “the fantasy sports businesses that
are not DraftKings and FanDuel”. He will argue that the actions of the two
market leaders, which brought about this scrutiny, has resulted in states
enacting legislation that makes it impossible for the small fantasy sports
operators to remain in business.
“After two states
[Virginia and Indiana] passed bills that became law, small fantasy sports
companies found out that they had a big problem. The fee for participation in
those two states had been set at a level far too high for small companies to
continue operation,” Brubaker will tell the committee. “A state-legislated
duopoly was essentially created because small companies had become financially
barred from participation. This included all the traditional season-long
companies that had never offered daily fantasy sports, yet by definition, they
became captured by these new laws.”
appearing before the committee are Kurt Eggert, professor of law at Chapman
University Fowler School of Law; Jordan Gnat, SVP of strategic business
development at Scientific Games; Mark Locke, chief executive of Genius Sports
Group; John M. McManus, general counsel at MGM Resorts International; Ryan
Rodenberg, assistant professor at Florida State University’s Department of
Sport Management; and Lindsay Slader, operations manager at GeoComply.
Gnat’s testimony will
focus on the effective regulation of sports betting in North America and
Europe, setting out the role that lotteries can play in helping to achieve a
stable and well regulated market, while Locke of Genius Sports will explain how
his company’s technology can help to protect the integrity of sporting
testimony will highlight the scope of the Professional and Amateur Sports
Protection Act (PASPA), which he says limits the ability of governments to
regulate both daily fantasy sports and traditional sports wagering. He will
also argue that nothing in the Unlawful Internet Gambling Enforcement Act
(UIGEA) appears to authorise daily fantasy contests.