New York's SB 9044 Seeks to Revamp Fantasy Sports Market

Sen. Joseph P. Addabbo is spearheading efforts to reform New York’s fantasy sports landscape through the introduction of Senate Bill 9044. This proposed legislation aims to authorize peer-to-peer daily fantasy sports (DFS) contests featuring pick’em-style markets. Additionally, the bill seeks to amend existing DFS laws in New York, providing clarity on issues such as age limits and tax revenue implications.

Senate Bill 9044 was initially introduced in April, followed by amendments made earlier this month by the Senate Racing, Gaming, and Wagering Committee. The committee approved the measure with a 6-1 vote, and it has since been referred to the Finance Committee for further consideration.

The proposed bill defines DFS contests as “a game of skill wherein two or more contestants compete against each other, including contests wherein participants select athletes, in the case of sporting events, shall accumulate more or less than a target score set by an operator.” This expansion of New York’s existing laws aims to create new opportunities within the DFS market.

Addabbo is optimistic that the measure will generate additional tax revenue for New York, with estimates suggesting an annual revenue increase of $3 million to $4 million from DFS contests.

Regulatory Shifts in New York

Senate Bill 9044 marks a significant shift in New York’s regulatory stance on fantasy sports. Last year, the New York State Gaming Commission (NYSGC) adopted rules prohibiting pick’em-style contests, despite from operators and their customers. Addabbo’s bill challenges these regulatory changes, advocating for the legalization of such contests.

The bill also proposes changes to age restrictions for DFS participation. Since 2016, New York has allowed residents and visitors aged 18 and older to engage in DFS contests. Addabbo’s measure, however, seeks to raise the minimum age limit to 21 years old statewide.

PrizePicks Settlement and Industry

The introduction of SB 9044 comes amid heightened regulatory scrutiny in New York. In February, PrizePicks, an Atlanta-based operator, reached a $15 million settlement with the NYSGC for operating without a wagering license. The settlement covers revenue generated from banned contests between June 2019 and December 2023. PrizePicks has expressed for Addabbo’s bill, which seeks to lift the ban on pick’em contests.

As one of the most influential states in the US, New York is also considering the legalization of proposition betting, or prop bets, in fantasy sports. This move could potentially increase revenue for education and deter funds from going to illegal operators. However, prop bets have recently faced criticism, with instances of bettors sending threats to athletes who influence their bets. Several states, including New York, have banned or restricted such betting for college tournaments, impacting the fantasy sports market.

Accelerating Casino Licensing in New York

In parallel with efforts to reform fantasy sports, two New York state lawmakers are advocating for an accelerated timeline for granting casino licenses. They argue that the current schedule results in billions of dollars in lost potential revenue. Proposed legislation requires proposals to be submitted by July 31, with the New York State Gaming Commission expected to approve three casino licenses by March 31, 2025, ahead of the current deadline of December 31, 2025.

New York plans to issue three casino licenses for the state’s interior, with applicants needing to meet environmental standards, including those set by the State/City Environmental Quality Review (SEQR) Act. There are 11 known candidates, with major operators like MGM Resorts International, Wynn Resorts, Las Vegas Sands, and Caesars Entertainment expressing interest.

Source:

“Lawmaker aims to lift ban in New York on pick’em-style DFS contests”, SBC Americas, May 28, 2024.