Recent calls throughout the country for the formal regulation of daily fantasy sports have made their way to New Jersey. On October 30, 2015, New Jersey State Senator Jim Whelan (D – Atlantic City) proposed legislation to regulate daily fantasy sports and to supplement the New Jersey Casino Control Act, N.J.S.A. 5:12-1 et seq. ("Act"). In a letter to Casino Control Commission Chairman Matthew Levinson and Division of Gaming Enforcement ("Division") Director David Rebuck, Senator Whelan stated that New Jersey has an obligation to ensure that fantasy sports competitions are fair, impartial and transparent, and noted that the proposed legislation would allow the Division to regulate daily fantasy sports providers and casino licensees offering daily fantasy sports games similar to how Internet gaming companies are currently regulated within the state. A legislative committee hearing may occur as soon as Monday, November 9, 2015.
First of all, the proposed legislation brings needed clarity to the question of whether daily fantasy sports contests are legal in New Jersey by categorizing them as games of skill and not chance. Thus, they would not violate existing prohibitions against gambling. This is consistent with a regulation adopted by the Division in July of 2014, which provides that fantasy sports contests are not considered gaming under the Act and allows casinos to conduct fantasy sports tournaments.
Under the proposed legislation, casino licensees or "daily fantasy sports providers" seeking to conduct "daily fantasy sports games" must apply to the Division for a "daily fantasy sports permit" to conduct daily fantasy sports games. The Division would have jurisdiction over the permit holders, oversee the conduct of the games and investigate permit applicants. The proposed regulatory framework has similarities to the regulatory scheme currently in place within New Jersey in regard to Internet gaming. For example, all equipment, including computers and servers, used to conduct daily fantasy sports games must be located within Atlantic City. Further, the proposed legislation's definition of "daily fantasy sports provider" refers to entities offering persons who are physically present in New Jersey the opportunity to participate in daily fantasy sports games. In addition, the proposed legislation envisions and allows for casino licensees to partner with daily fantasy sports providers in offering daily fantasy sports games.
The proposed legislation allows for daily fantasy sports games based on both professional and collegiate athletic events, provided that the outcome is not based solely on the performance of an individual athlete or on the score, point spread or any performance of any single real team or combination of real teams.
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