MARCH 1, 2017

Sports fans in Oregon will be able to participate legally in daily fantasy sports (DFS) competitions, competing for cash and prizes, if lawmakers approve a bill currently before the state’s legislature.

Sports fans in Oregon will be able to participate legally in daily fantasy sports (DFS) competitions, competing for cash and prizes, if lawmakers approve a bill currently before the state’s legislature.

In January, Oregon state Rep. Jodi Hack (R-Salem) proposed House Bill 2549, which would legalize DFS transactions in the state and regulate the financial structure of DFS companies such as FanDuel and DraftKings.

In DFS competitions, consumers pay entry fees to enter competitions in which a set of professional athletes’ real-world performance during a set period is tracked, scored, and compared to other participants’ choices.

If approved by the Oregon Legislative Assembly and signed by Gov. Kate Brown (D), the bill would require DFS companies to keep players’ funds separate from operational funds.

HB 2549 grants the Oregon State Lottery Commission oversight authority over DFS, including restrictions on how often individuals may participate in DFS.

A Gambling ‘Hybrid’

Marc Edelman, a law professor at Baruch College, says DFS combines elements of fantasy sports with sports gambling.

“Daily fantasy sports, in earnest, is a hybrid product between traditional fantasy sports and sports gambling,” Edelman said. “In some ways, DFS looks just like traditional fantasy sports, in that participants select a collection of players that they believe will perform well. These players will compete against players selected by other contestants, and points are accumulated due to the performance of the players in the real-world sporting events.

“On the other hand, however, DFS bears certain characteristics reminiscent of more-traditional sports gambling,” Edelman said. “For example, an entire contest is played over the course of a single day and not a long duration. In addition, in most instances, the participants in DFS do not know each other, and they use mathematical analysis when predicting their players’ performance, rather than objective watching of the players and negotiating with club owners over a period of time.”

Resisting the Regulatory Urge

Edelman says state lawmakers should not make new regulations on DFS if existing regulations will suffice.

“The first thing state legislators need to do is look at the existing gaming law within that state,” Edelman said. “Everybody is rushing to create new laws with respect to DFS. They’re just fantasy sports in the form of online gaming. I think many already regulate it under general gaming laws.”

Get Government Out of Gambling

Steve Buckstein, a senior policy advisor with the Cascade Institute, says government shouldn’t be in the business of hosting or micromanaging gambling.

“The state ultimately should get out of the gambling business itself,” Buckstein said. “Sell or dissolve the Oregon Lottery and stop either promoting or discouraging gambling or other peaceful activities by Oregonians.

“Government should not be mandating limits on the number of entries a fantasy-contest player may submit to each contest,” Buckstein said. “If it’s legal, which it should be, such rules should be up to the company running the game, not the government.”

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