Fantasy sports bill fails in committee

Posted May 17

FanDuel, Fan Duel

— A bipartisan measure that would legalize fantasy sports gaming in North Carolina was voted down by the House Regulatory Reform Committee on Wednesday.

House Bill 279 would define fantasy sports as not a form of gambling under North Carolina law and would exempt operators from prosecution. League operators would be required to register with the Secretary of State's Office, pay an annual fee and agree to restrict participation to players 18 and over. They would also agree to ban operators from participating in the games and allow problem players to ask to have themselves banned from the site.

Bill sponsor Rep. Jason Saine, R-Lincoln, said 1.6 million North Carolinians are already playing the online games. He said 10 states have adopted similar legislation and 15 others are considering it.

No member of the committee spoke against the bill during its short hearing, but several had pointed questions for Saine.

"Under current law," asked Rep. Sarah Stevens, R-Surry, "is it clear or is it not clear that this is gambling?"

"There is not a definition because fantasy sports are fairly new," Saine responded, describing the legal status of the games as "ambiguous."

Under North Carolina law, gambling is defined as a game of chance, as opposed to a game of skill. Saine said that choosing members of a fantasy sports team and wagering on its aggregated performance requires more skill than chance. He added that fantasy sports differs from basic sports betting because players are betting on the outcomes of multiple game performances, rather than a single contest.

Rep. Michael Speciale, R-Craven, took issue with that characterization: "It’s the same thing. You’re going on past performance of the teams, and you’re guessing how they'll do."

"Then we should probably outlaw investing and other things in this state if you’re looking at past performance and guessing how they’ll do," Saine replied. "It’s a matter of definition, a matter of preference."

"Whatever’s happening now is going to continue to happen whether we do anything or not," said Rep. Jimmy Dixon, R-Duplin, in support of the bill. "This registration might in actuality more completely define what's happening and possibly prevent, further down the line, abuse."

But North Carolina Family Policy Council President John Rustin spoke against the measure, saying it "would represent a massive expansion of legalized gambling in North Carolina."

"There are an incredible number of variables which are really beyond the individual's control or ability to predict," Rustin said. "The elements of chance far outweigh the elements of skill, and that’s how gambling is defined under North Carolina law."

Rustin also pointed out that, while the bill would require registration, it contains no mechanism for regulatory enforcement of what's become a big and highly profitable business. He said the two largest fantasy sports sites, Fan Duel and Draft Kings, spent a combined $500 million on advertising alone in 2015.

After a close voice vote on a motion for approval, Chairman Rep. Chris Millis, R-Pender, who had already said he didn't favor the bill, called for a show of hands. The vote was 4-7.

Under House rules, the bill should be dead for the remainder of the two-year session, but its current status is uncertain.


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