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Daily Fantasy Sports Regulation in State Legislatures

18 August 2016

Daily Fantasy Sports Regulation in State Legislatures

Daily fantasy sports is a concept that is as tricky to say as it is to understand.  It exists in a legal gray area that has remained unregulated for years.  Recently, after several scandals that brought widespread public attention, legislators have attempted to define and regulate the practice.  

Daily fantasy sports involve a person creating a daily or weekly virtual roster of players for the sport they are interested in based on the real player’s performance.  The reality of that real player’s performance on the field or court, then, dictates whether the virtual roster is a winner or loser.  

Entry requires payment of a fee for each roster.  The winning roster collects a monetary prize. This model has attracted billions of dollars in entry fees (as actual player numbers are unknown, this is the best metric to measure their reach) and has proven to be highly lucrative for those running the fantasy game.   

But allegations of fraud and insider knowledge, as well as concerns over the impact of the industry on people with gambling addictions has led lawmakers to attempt to create industry guidelines.  These regulations and guidelines are highly dependent on whether daily fantasy sports are defined as a “game of chance” or a “game of skill.”

Of the handful of state legislatures that have worked on legislation regarding daily fantasy sports, I have chosen four to focus on.  Two states (Indiana and Virginia) have, as of July 1st, passed bills regulating the daily fantasy sports industry. Two other states (Illinois and Iowa) have had votes on bills regarding the industry, but have not yet successfully passed them into law.   

Let’s take a look at the bills to see how lawmakers have addressed the industry.

To begin with, none of the bills make the activity illegal.

Illinois’s HB 3655 treats daily fantasy sports essentially as legalized gambling, requiring the organizers to obtain gaming licenses or by simply placing their regulations into the “Gambling” section of the state penal code. Iowa’s SF 166 calls for a study to determine the impact of daily fantasy sports, before listing it as gambling.

In contrast, Indiana’s SB 339 and Virginia’s SB 646 have defined that fantasy sports contests are not gambling. Virginia defines it as a “fantasy contest” and Indiana states that a paid fantasy sports game does not constitute gambling.

Illinois, Indiana, and Virginia establish age requirements for participating.

Illinois, Iowa, and Indiana prevent daily fantasy sports from running contests for college or high school level athletics.

All of the states take measures to ensure that the contests are not based on a single event to avoid betting on particular matchups (for example, that Sports Team X beats Sports Team Y today), ensuring that the win will be a result of skill of the person choosing a roster and not as a result of a single lucky choice.



“Yea” Votes

“Nay” Votes

Age  requirement

College/high school contests?

Illinois (HB 3655)

Treated as legal gambling; not explicitly defined as either gambling or not gambling


8 Republican

24 Democrat

12 Republican

10 Democrat



Indiana (SB 339)

“Does not constitute gambling”


31 Republican

7 Democrat

9 Republican

2 Democrat



Iowa   (SF 166)

Not defined; bill calls for a study to determine the impact before listing as gambling


10 Republican

22 Democrat

13 Republican

3 Democrat



Virginia (SB 646)

“Fantasy contest” under the jurisdiction of the Department of Agriculture and Consumer Services


10 Republican

18 Democrat

9 Republican

1 Democrat



How do lawmakers on both sides of the aisle feel about these regulations?

Using Vote Smart’s Key Votes tool, we can examine how Democrats and Republicans have voted.

In Indiana and Virginia, a majority of Republicans supported the bill, albeit by a narrow margin, especially in Virginia. It is interesting to note that these were also the two states in which daily fantasy sports was explicitly not categorized as gambling.

In Illinois and Iowa, the majority of Republicans voted against the bill while the majority of “yea” votes came from Democrats. Neither party voted unanimously in either of the states.

In this era of increasingly partisan politics, it is certainly interesting to see splits within both parties caused by disagreements over this type of legislation. Another possible takeaway is that the parties have yet to develop an overall platform on this issue, leaving individual legislators to decide for themselves.

But what does this mean in the grand picture, especially for those of us who don’t live in these 4 states?

These pieces of legislation have set the agenda for conversation and will undoubtedly serve as models for other states seeking to pass similar bills.

The way that lawmakers have drawn the distinction between “games of chance” and “games of skill” will certainly be a model for other bills, both at the state and national level, which address this issue. And the lack of party unity in these votes means that voters will have to be watchful of their representatives, to ensure their voice is heard.

Eric Bishel is a student at Franklin University Switzerland, majoring in History and International Relations, and a current intern with Vote Smart. For more information on internship opportunities with Vote Smart, contact us at or by calling 1-888-VOTE-SMART.


Related tags: blog, fantasy-sports, Illinois, Indiana, Iowa, online-gaming, Virginia

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