New York State Collects $3 Million from Legal Fantasy Sports
On January 10, 2017, at a hearing, Peter Schoenke, chairman of the Fantasy Sports Trade Association (FSTA), told the New York State Racing and Wagering Committee that New York State would receive more than $3 million in tax revenue generated between January and November 2017, from daily sports fantasy operations. The $3 million is just an estimate and is expected to increase considering figures from December 2017 have yet to be finalized. The object of the hearing was to review the Daily Fantasy Sports Law passed by the New York State Assembly in 2016. The 2016 law has yet to be finalized, it only implemented a set of temporary regulations and the state only issued 15 permits to operators, including FanDuel, DraftKings, and Boom Fantasy. Yet, the law appears to have been a moderate success.
The law has remained controversial and as we have previously reported, subject to litigation. However, prior to the passage of the law, a legislative memo said the state could use tax revenue generated from daily fantasy sports in order to help fund its $25 billion education tab. While in realty the $3 million in tax revenues from the 15 companies, was below expectations, Assemblyman Gary Pretlow, chairman of the Committee on Racing and Wagering, said that the results were better than nothing.
Another goal of the hearing was to discuss the regulatory scheme that is going to be put in place and also for the committee to hear suggestions from the industry leaders as to how to increase revenue. The company executives suggested that the state should allow more sports, like golf and soccer, so that the companies can add new gaming options for players. Peter Schoenke, asked the state to step back from its plan to require that all games be approved by the state. “Some of those little regulatory things that make doing business in the state a little more troublesome … we’re just trying to smooth those out,” Schoenke said. Company executives also requested that the state allow “real-time” fantasy wagering, meaning that fans could place live bets in order to attract more players.
The U.S. Supreme Court has yet to decide on the future of sports betting, but according to Ari Borod, Vice President of FanDuel, “The New York bill has served as a template for fantasy sports bills across the country and several states have since enacted similar laws.” While the future of sport betting in the country is still undecided, it has shown signs of success and the potential for growth in New York State.