An Ohio lawmaker is proposing a bill to restrict daily fantasy sports (DFS) by expanding state regulators’ authority to control the business practices of websites facilitating online DFS competitions.
In late September, state Sen. Robert Coley (R-Liberty Township) introduced Senate Bill 356, which would prohibit DFS companies from profiting from players’ contest entry fees. Coley proposes requiring DFS companies to pay out the full value of collected entry fees, instead of allowing them to withhold a percentage of the proceeds to pay for facilitating the competition.
Daily fantasy sports services, such as DraftKings and FanDuel, allow players to compete online by selecting professional athletes for fictional “fantasy” teams. Players compete by comparing real-world performance statistics over an agreed-upon period. Teams with the best results often win prizes or cash.
If enacted, SB 356 would also place restrictions on wagering on “e-sports” events, competitions between players or teams of players in electronic games, such as Dota 2, League of Legends, and Overwatch.
Restriction or Ban?
Michelle Minton, a fellow at the Competitive Enterprise Institute, says Coley’s bill would effectively ban DFS in Ohio.
“As I understand it, DFS sites make most, if not all, of their revenue from entry fees,” Minton said. “Without these fees, they would be unable to advertise, pay staff, or even keep their websites up and running.”
Minton says prohibiting or restricting such popular forms of entertainment makes things worse for consumers instead of protecting them.
“Outlawing fantasy sports won’t stop consumers from gambling,” Minton said. “It will simply push their activity under the rug, onto the multibillion-dollar sports gambling black market run by criminal syndicates, where there is no oversight and few consumer protections.”
Instead of treating consumers like babies, lawmakers should trust people to know the rules of the games they play, R Street Institute Associate Fellow Steven Titch says.
“Gamblers are used to and understand what the wagers are,” Titch said. “No one is being dishonest about it. You know going in that a portion is being withheld to basically charge for brokering the site. It’s like telling a real estate agent that you cannot collect commission because you would be cheating the person buying or selling the house. Cheating implies dishonesty.”