Legislators discuss pros and cons of growing fantasy sports industry

08/30/2016 05:46 PM

FRANKFORT – Oversight legislation for the growing business of fantasy sports was on the table today at the monthly meeting of the Interim Joint Committee on Licensing and Occupations.

Cory Fox, counsel, for Policy and Government Affairs for Fan Duel, a web-based fantasy sports game and the largest daily fantasy sports company, told legislators that his industry is looking for oversight legislation in the commonwealth to protect not only the sports fantasy companies, but consumers as well.

“We’ve been operating in 45 states at the beginning of last fall, but we knew we wanted to put bills in place to ensure our legal clarity was there and also put in place consumer protection,” Fox said.

The question was raised about how much tax revenue is collected as a result of the growing fantasy sports enterprises.

Sen. Chris McDaniel, R-Taylor Mill, questioned Derek Hein, Manager for Government Affairs for Draft Kings, a Boston based daily fantasy sports contest provider, about what taxes are currently paid by the fantasy sports companies, and the players who win.

Draft Kings Manager for Governmental Affairs Derek Hein said that at this time, only winners who collect over a certain amount are taxed on their winnings.

“If a consumer wins more than $600 on our site, they are currently issued a 1099, and that’s what we pay currently,” Hein said. “There’s nothing in law that requires us to pay anything else.”

Sen. Damon Thayer, R-Georgetown, expressed similar concerns about fantasy sports conflicting with the state’s signature thoroughbred racing industry.

“How do you co-exist with pari-mutuel horse tracks in the states where you passed legislation,” asked Thayer.

“In other states with pari-mutuel horse racing we’ve co-existed for years,” Fox said. “The horse men and the horse tracks have been supportive of our legislation and some had some concerns, but more relating to their own business than the actual competition from fantasy sports, so it hasn’t been an issue in other states.”

Legislation which has been passed across the country include the following mandates for operators.

o Contests limited to persons 18 and over
o Ban on employee play
o No college sports
o Resources for responsible play
o Must segregate player funds from operating funds
o Include beginner games and designation of highly experienced players

The meeting was originally scheduled to take place at the Jim Beam Distillery in Clermont, but was moved to the Capitol Annex by co-chair Rep. Dennis Keene, D-Wilder, so that Democrat House members could attend Democratic House Speaker Greg Stumbo’s meeting in the House chamber concerning pensions which was boycotted by Republican members.

Thayer criticized the change of venue as partisan politics.

“I think Chairman Keene and Speaker Stumbo did a tremendous disservice to the legislative process today, and to the people of Bullitt County, and to the employees and management of Jim Beam,” Thayer said.

About Don Weber

Don Weber joined cn|2 when it launched back in May 2010 and soon became a reporter for Pure Politics. He is a graduate of Northern Kentucky University and has spent many years covering everything from politics to sports. Don says he loves meeting new people everyday as part of his job and also enjoys the fact that no two days are the same when he comes to work. Don Weber can be reached at donald.weber@twcnews.com.

2 Comments

Comments

  • nutjob wrote on August 31, 2016 07:40 AM :

    if there isn’t any new tax revenue then it will be a non-starter. It is kind of pay for play. If Kraft Kings and others are going to make money from Kentucky “gamblers” the state is going to demand a cut just like from the race tracks. If they want legislation it is going to be expensive in the form of a higher tax. The state can’t count on revenue from winners to make up all those holes in the pension system

  • viewer wrote on August 31, 2016 11:01 AM :

    I went back and watched this hearing this morning. Marc Wilson or Leigh Ann , would have been better suited , if they had spoken for these companies. Don’t know if that one in the middle had a bad night , too much Kentucky Bourbon , or just a bad day , but he didn’t seem to be a happy camper….

    This Draft King is a lot like day trading. Very few winners , and the time spent researching , takes its toll on the player. Smart players , professional gamblers , know that this is for junkies or just fans to pass the time. A fade that will be around but like with keno games , will be hit and miss going forward…

    Sports betting is a big deal in America. NFL is biggest gross for bookies. NBA , college basketball, and MLB is the only games that the bettor has the advantage over the House…

    Professional Horse Players and Horse Owners in Kentucky , bet the majority of their bets offshore. Keeneland and Churchill Downs handle from the Sharps is not even 20percent of the action being played.

    Congress has moved 90percent of the action out of view. Similar to the days of Capone prohibition era… The viewer

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