Daily fantasy sports bill faces backlash from Governor Nixon
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Daily fantasy sports bill faces backlash from Governor Nixon

Date: January 22, 2016
By: Riley Newton
State Capitol Bureau
Links: HB 1941

JEFFERSON CITY - As the NFL winds down and enters its final playoff games, a political battle in Missouri legislature is evolving over online fantasy games.

In his State of the State address, Gov. Jay Nixon called on lawmakers to regulate and tax the industry.

"Let's work together to protect kids and consumers, by reining in the billion-dollar daily fantasy sports industry. Let's get real: this is gambling, kids are playing and it's completely unregulated," Nixon said in his speech on Wednesday night, Jan. 20.

Nixon's statement came shortly after one legislator sponsored a bill to completely exempt gambling involving online fantasy-team sports from state laws regulating gambling. The bill would exempt fantasy sports contests, like the two largest daily fantasy sports companies DraftKings and FanDuel, from gaming and gambling laws.

Several states have taken action against online fantasy sports claiming they violate their current laws on gambling.

New York and Illinois deemed online fantasy states illegal under their state laws. This promoted both DraftKings and FanDuel to initiate a legal battle with both states. New York's attorney general filled a lawsuit against DraftKings and FanDueland demanded that they pay back all the money they made in the state from online fantasy leagues.

A daily fantasy sports team is a game in which players can form imaginary sports teams with players throughout the league of their choosing (MLB, NFL, NBA, etc) and compete against other players' players week by week based on the statistically performance of the players in real professional sports games.

Fantasy-game supports argue the games are not illegal because they require skills, not just luck.

"I look at it as a sport. I play fantasy sports. I don't consider it gambling. It's not like you are playing roulette. You study players and who you are playing against. I would compare it to the stock market," the sponsor of the House bill to explicitly exempt online fantasy games from Missouri's current laws restricting gambling -- Rep. Scott Fitzpatrick, R-Shell Knob.

He said that Nixon's comments about his bill on daily fantasy sports during his State Address were, "a little shocking" and "came out of nowhere."

In his legislative address, Nixon charged the effort to legalize the game was being driven by lobbyists.

Missouri currently has four lobbyist listed that are representing by DraftKings and/or FanDuel. Fitzpatrick said he has communicated with lobbyist from DraftKings and FanDuel as well as the gaming industry.

Jeremy Kudon, a spokesperson for FanDuel and DraftKings, released a statement stating: "The governor is entitled to this opinion and we appreciate his recognition of the tremendous popularity of daily fantasy sports. We have faith in the legislative process and look forward to continued engagement with elected leaders like Rep. Scott Fitzpatrick, who are taking thoughtful and appropriate action to ensure that the many of thousands of Missourians who plan daily fantasy sports can continue to enjoy the contests they love."

Nixon's speech left the door open to legalizing the games, but with conditions. "If you're going to legalize it, we must regulate it and tax it like we do casinos."

Missouri is one of the highest-taxed casino jurisdictions in the country according to the Missouri Casino Industry's website. Last year, Missouri generated an average of $513 million dollars in casino taxes. The tax includes a 21 percent gaming tax. Casino taxes are the fifth largest source of income in Missouri, behind income, sales, and corporate taxes.

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