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New York set to legalise DFS after Senate and Assembly approval

Daily fantasy sports (DFS) could soon be legalised in New York after bills were passed with strong support by the state Assembly and Senate late Friday night, although the Attorney General will continue to pursue claims against leading operators DraftKings and FanDuel.

Senator John Bonacic’s S08128 passed with 45 votes in favour and 17 against, while Assemblyman Gary Pretlow’sA10473A was supported by 91 Senators, with 22 voting against the bill.

While the bill now passes to Governor Andrew Cuomo for approval, it has enough support in each legislative house to pass into law without his signature. 

Each bill sets out a tax rate of 15 per cent of gross gaming revenue, with applicants required to pay a registration fee determined by their revenue. Companies generating more than $200,000 in revenue will have to pay a $100,000 fee, though this falls to $25,000 for revenue between $100,000 and $200,000. Operators that generate $100,000 or less will pay a $5,000 fee. 

Companies will have to file an application to operate with the New York State Gaming Commission, renewing their licences every there years.

The passage of the legislation will allow DFS market leaders FanDuel and DraftKings to re-enter the New York market, one of the most lucrative states for fantasy contests in the US. 

The state has developed into a key battleground for DFS, with Attorney General Eric Schneiderman pursuing cases against the market leaders, accusing them of false advertising and consumer fraud. While it had been assumed that Schneiderman would drop his action against each company once legislation passed, the AG has instead pledged to continue the cases.

"As I have said from the start of my office’s investigation into daily fantasy sports, my job is to enforce the law,” Schneiderman said in a statement once the bill passed.

“Today, the Legislature has amended the law to legalize daily fantasy sports contests, a law that will be my job to enforce and defend. We will nevertheless continue to pursue our claims that DraftKings and FanDuel previously engaged in false advertising and consumer fraud," he said.

Despite this, FanDuel hailed the regulatory progress, paying tribute to a grassroots effort by DFS players to convince legislators to legalise the game in New York.

“New York fantasy sports fans rallied – with more than 100,000 emails and thousands of phone calls to legislators – and legislators heard them and responded,” FanDuel chief executive Nigel Eccles said. 

“The bill represents a thoughtful legislative process, where bi-partisanship and willingness to compromise carried the day, and we are extremely hopeful Governor Cuomo will sign this bill,” he continued. “We decided long ago to build FanDuel in New York because it’s the sports capital of the world and a thriving home for tech startups – a natural fit for fantasy sports. Our success is due in no small part to the people, infrastructure, partnerships and opportunities here, which very few locations in the world can offer."

“New York is the seventh state to pass a fantasy sports bill just this year– frankly a remarkable amount of progress in a short period of time,” Eccles continued. “It speaks to the popularity of our game, the passion and advocacy efforts of our fans and the immense potential states are seeing in the fantasy sports industry.”

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