On Wednesday, Maine became the 15th U.S. state to legalize and regulate daily fantasy sports. DFS contests are categorized as a game of skill under Maine gaming laws.
The bill which legalized fantasy sports sites like FanDuel and DraftKings was called “An Act To Regulate and Tax Sports Fantasy League Activities in Maine”.
Governor Paul LePage did not sign the bill into law, but it passed by such a margin that the bill automatically went into effect after a certain time passed without signage. The bill was submitted to Paul LePage in June.
Maine Daily Fantasy Sports Laws
Maine’s fantasy sports bill sets lower limits for DFS services which to require licensing. Companies need to generate revenue of more than $100,000 each year to be licensed, but operators with less than the $100,000 do not need a license.
Licensed fantasy sports services also need to pay a $2,500 yearly licensing fee. In the newly regulated market, daily fantasy sports sites like DraftKings and FanDuel need to pay a 10% tax rate on revenues. The state legislature passed a number of consumer protection and responsible gaming laws in the DFS bill.
No College or High School DFS Contests
For instance, daily fantasy sports sites cannot organized contests on college or high school sporting events. DraftKings offers NCAA football and basketball, but the Massachusetts-based fantasy sports service will not be able to offer those games in Maine.
Other common sense consumer protection policies were placed in the new bill. Players need to be 18 or over in order to play in real money DFS contests. Also, operating funds must be segregated from investment funds, so winnings from a player’s account must always be payable on demand.
DraftKings and FanDuel Statement
Marc La Vorgna, a joint spokesman for DraftKings and FanDuel, praised the work of the bipartisan group of state lawmakers who co-sponsored the bill. In the Maine Senate, Sen. Michael Carpenter (D), Sen. Troy Jackson (D), Sen. Roger J. Katz (R), and Sen. Garrett Mason (R) were praised for their work in passing the bill. In some instances, State Sen. Andre E. Cushing III also is listed as a co-sponsor of the bill.
In the Maine House of Representatives, State Rep. Kathleen Dillingham (R), Rep. Brad Farrin (R), Rep. Jared F. Golden (D), and Rep. Louis J. Luchini (D) received praise.
State Rep. Kathleen Dillingham was a vocal spokesperson for the bill, saying in a floor debate, “I would ask that you support the motion, move forward and make sure that we are able to have regulations in place for this industry and that we ensure there are consumer protections for the 215,000 participants in the state of Maine.”
Craig Hickman Criticizes Daily Fantasy Sports
Some lawmakers opposed the measure. Rep. Craig Hickman (D), said that the bill did not help the state or its residents, but was designed entirely to help the fantasy sports operators, whom he described as “profiteers”.
Representative Hickman said, “This bill has more holes in it than cheesecloth. This bill is written by an industry to protect an industry in the state of Maine. We are not going to get very much out of it.”
Rep. Kent Ackley (I) was even blunter in his assessment. Representative Ackley said, “I don’t think the state of Maine should be in the business of feeding what could be an addiction.”
William Tuell: “Everybody” Plays Fantasy Sports
William Tuell, a GOP representative, gave the “everybody does it” argument to his fellow Maine legislators. Representative Tuell said that fantasy sports is commonplace, so protections should be in place to regulate a mainstream hobby.
State Representative Tuell said, “Some do it for entertainment, everybody does it — a lot do it — are sports fans. And I think this bill is the best way forward for daily fantasy.”
Massachusetts Daily Fantasy Sports Ban
Several states have legalized daily fantasy sports this year, though the industry received a setback in Massachusetts. After a 10-month study of the daily fantasy sports industry, the Massachusetts Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports argued that DFS is a game of chance and should be labeled as gambling.
It was a bitter setback for DraftKings, which is based in Boston. DraftKings and FanDuel have fought a two-year set of legal battles to keep state attorney generals from banning their hobby or declaring it “gambling“. Meanwhile, they launched a campaign to lobby state governments to legalize and regulate the industry.
US Daily Fantasy Sports Industry
At one time, FanDuel and DraftKings were bitter rivals, which fueled a near-omnipresent ad presence in US sports broadcasts in 2015. Such high visibility led to a backlash, and the two companies have been on the defensive for nearly 2 years. The two DFS companies, which control about 95% of the daily fantasy sports in the United States, now are closely-allied enough they have a joint spokesman.
Earlier this year, the two companies sought to merge into one DFS service. The Securities and Exchange Commission (SEC) ruled that a merger between the two would create a monopoly, so it rejected the merger. DraftKings and FanDuel promised such a move would not lead to higher prices, but federal regulators were not moved.
Fantasy sports is enjoyed by 50 million Americans each year. Most fantasy football and fantasy baseball is played among groups of friends, family members, and coworkers. Those
