While there is little doubt about daily fantasy sports legality in the United States, the legal status in some states remains murky. One of those states, Kansas, today officially clarified its position on fantasy sports with the signing of HR 2155 by Governor Sam Brownback. The bi-partisan bill had previously passed both chambers of the Kansas State congress over the last month with large majorities.
Over 500,000 Kansas residents participate in fantasy sports leagues, according to the Fantasy Sports Trade Association. Over 40 million adults participate in some form of fantasy sports in the United States and Canada.
Why the Need for Clarification?
Even though there was no law expressly forbidding fantasy sports or daily fantasy sports in Kansas, the game had come into scrutiny because of how the Kansas Constitution could potentially classify lottery games, which under a broad interpretation could have included fantasy sports. In August of 2014, Kansas state gaming regulators came out with their opinion viewing fantasy sports, including daily fantasy games, as illegal lotteries.
At the time, game regulators stated that “if a fantasy sports league has a buy-in (no matter what it is called) … and gives a prize, then all three elements of an illegal lottery are satisfied.”
The legal situation had led daily fantasy sports site Star Fantasy Leagues to play it safe and not accept real money fantasy sports activity from Kansas residents. Top daily fantasy sports sites FanDuel and DraftKings continued to accept real money players from Kansas while the law was up for debate.
The Star Fantasy League FAQ currently makes no mention of their position on daily fantasy sports. They currently prohibit real money players from Arizona, Arkansas, Delaware, Iowa, Louisiana, Montana, Tennessee, and Washington. FanDuel and Draft Kings currently bar players from Arizona, Iowa, Louisiana, Montana and Washington.
A Consensus Develops for Legalization
In April, an opinion by Kansas Attorney General Derek Schmidt paved the way for the passage of HR 2155. He declared in his statement that fantasy sports were legal under the Kansas Constitution by noting that fantasy sports was a game of skill and did not break existing laws outlawing private lotteries.
Schmidt’s opinion was a catalyst for passage earlier this month, which saw clear majorities in both chambers — 37-1 in the Senate on May 4th and 98-21 in the House on May 7th.
State Legislation on the Horizon
Fantasy sports legality remains on solid footing in the United States — this includes the status of daily fantasy sports, despite the author of the bill recently quoted as saying that DFS was not an intention of the UIGEA carveout). At a state level, some states like Kansas are attempting to clarify their position on real money daily fantasy sports.
Louisiana, Iowa and Washington state each have laws on the book not favorable to DFS and are attempting to pass legislation legalizing daily fantasy sports. Legislation in other states not favorable to daily fantasy sports has stalled. As the popularity of the game grows, players will likely be putting more pressure on their representatives to get something done.