The legislative and regulatory differences between paid fantasy sports and online sports wagering continue to spark discussion between key stakeholders in gaming.
Those discussion continued at SBC Summit Americas in Fort Lauderdale, where a group of industry experts spoke about the variation in legislation and regulation for fantasy sports compared to sports betting. The topic was discussed by a panel that included Wallach Legal LLC founder Daniel Wallach and Heitner Legal PLLC partner Alan Wilmot.
The group of industry experts was also joined by VelaWood partner Kevin Vela and Ohio Casino Control Commission General Counsel Andromeda Morrison.
Paid fantasy opening new doors in gaming
The growth of paid fantasy is creating new opportunities for operators and suppliers.
“It [fantasy sports] allowed operators to enter the gaming space who previously weren’t allowed to do so because state-by-state regulations made it difficult,” Wilmot told attendees. “We gave those operators a chance to enter into certain markets like California, Texas and Florida that don’t offer licensing for gambling.”
Fantasy operators are present in some of the markets Wilmot mentioned, operating as a skill game, but questions remain about the overlap between fantasy sports and sports betting.
“Fantasy sports and sports betting are two completely different concepts of data,” continued Wilmot. “Fantasy sports is governed under its own subset of rules and regulations and you have gambling that has its own subset of rules and regulations.”
State gaming regulator defines paid fantasy
The varying standards regarding paid fantasy and sports betting led Ohio gaming regulators to create a framework to regulate and monitor both gaming verticals.
Ohio House Bill 132, passed in 2018, defines fantasy contests while providing the state’s gaming commission with the authority to issue licenses and regulate fantasy sports.
“[Ohio’s fantasy sports measure] opened the door for companies to take advantage of new marketplaces,” said Morrison during the discussion. “But it also works well for the state’s legislative office for regulators to take notice and to decide whether there needs to be more consumer protection or whether there needs to be more regulation.”
Ohio regulated paid fantasy before the state legalized online sports betting. The state’s willingness to first regulate DFS was sparked by its perceived contrast to betting.
“The General Assembly made it very clear that there was a difference,” added Morrison. “The environment in which that was happening was ‘hey we are not ready to open the doors for sports betting in this state’ therefore there needs to be a clear definition.”
Ohio provides its gaming regulator and players with clarity as other markets across America continue to have varying stances on paid fantasy and online sports betting.
With close to 30 states offering some variation of both sports betting and paid fantasy, some argue there is still a misperception of the regulatory differences between the two verticals.
“There’s confusion, especially when you have companies like Betr, Underdog and PrizePicks, which offer a product that bears similarities to player proposition wagering, said Wallach. “There is a heavy differentiation between the two when it comes to integrity.”
Regulators across the country will continue to try to draw a line between paid fantasy and sports betting as operators and players nationwide take advantage of their popularity.
