Football Season and Fantasy Sports

Published September 1, 2016

As the world anxiously waits to see the Carolina Panthers and Denver Broncos open the season in a Super Bowl rematch, fantasy football fans are glued to their computer screens debating which of their fledgling teams is the cream of the crop.

Steven Titch, policy analyst at the Reason Foundation, explains how fantasy sports work in a recent R Street Institute article. “In fantasy sports, contestants pool their money and they each select a line-up of real-life players in a given sport—baseball, football, hockey, even golf and NASCAR. The performance of each player is tracked and the fantasy team is awarded points based on individual achievement—e.g., home runs in baseball and touchdowns in football.”

While this might sound like good, harmless fun to you, lawmakers across the nation have been working to ban or heavily regulate the growing fantasy sports industry, and fantasy sports businesses, such as FanDuel and DraftKings, and business associations, such as the Fantasy Sports Trade Association, have ramped up their efforts to stop government intrusion by lobbying in favor of fantasy sports freedom in legislative battles in numerous states, including Illinois and Texas. According to a recent Wall Street Journal article, Alexandra Berzon states the industry’s lobbying efforts are growing: “It involves 78 lobbyists in 34 states, up from four lobbyists a year ago.”

Numerous states are looking especially hard at daily fantasy sports (DFS), which has historically been more closely tied to pay-to-play operations compared to many traditional, season-long fantasy sports leagues. In a an August Off Shore Gaming Association article, writer Hartley Henderson says Florida, Kentucky, Michigan, Minnesota, Nebraska, New Mexico, South Carolina, and Wisconsin have all been invested in the fantasy sports debate. “Even states that were banned from the outset are having second thoughts. Arizona, Iowa, Louisiana and Washington all have some sort of bills to legalize DFS on the table. Only Montana has no bill on the table or desire to look at fantasy sports legalization.”

In the Empire State, New York Attorney General Eric Schneiderman declared DFS to be illegal, ordering a shutdown of all DFS activity in the state. Within a few months, the New York State Legislature passed legislation permitting DFS.

Citing an up-to-date DFS legislative tracker provided by ESPN, Titch said, “Mississippi, Missouri, Rhode Island and Tennessee are among states that also have legalized DFS, while it remains banned in Iowa, Louisiana, Arizona and Washington State.”

Jesse Hathaway, managing editor of Heartland’s Budget & Tax News, argues in a recent Pittsburgh Tribune-Review article state and federal lawmakers should refrain from cracking down on daily fantasy sports and let people have fun. “Instead of blitzing daily fantasy sports, lawmakers should resist the urge to ban popular, benign activities and products. Leaving consumers alone and letting them spend their money in harmless ways they enjoy is a touchdown for everyone.”


What We’re Working On

Budget & Tax
Research & Commentary: Kansas Needs to Adjust Its Assumptions on Pension Investments
Kansas is now facing a significant shortfall in its pension fund investments that could create substantial funding problems in the future. In 2015, Kansas issued a $1 billion bond in an effort to boost its public-pension system by investing the bond proceeds. While final figures are not yet available, the Kansas Public Employees Retirement System (KPERS) Director Alan Conroy indicated to the Topeka Capital-Journal investment returns for the first year are expected to be minimal. In this Research & Commentary, Senior Policy Analyst Matthew Glans examines state pension funds and assumed rates of return. “If the estimated rate of return for these pension funds continues to fall short of expectations, pension systems across the country may be in even more trouble than is currently thought. Pension experts recommend states use an expected investment return rate of 3.1 percent, which is based on 30-year U.S. Treasury bond yields,” Glans wrote. Read more

Research & Commentary: Louisiana Scholarship Program Saves Pelican State Tax Dollars
In this Research & Commentary, Policy Analyst Tim Benson writes about a new study by the School Choice Demonstration Project (SCDP) at the University of Arkansas, which has found the Louisiana Scholarship Program (LSP) – the Pelican State’s voucher program for low-income students that launched in 2008 – is saving the state money. SCDP says cancellation of the program would increase costs for four out of five local school districts. To be eligible for the LSP, students must come from families earning under 251 percent of the federal poverty level and must have attended a school C-rated or below during the previous school year. Greater than 7,100 Louisiana children took advantage of the program in 121 different schools in the 2015–16 school year. However, funding for the program will drop from the $42 million it received in 2015–16 to only $40.1 million in the fiscal year that started in July 2016. “Based on what we know about the educational benefits of school choice programs in general and the cost-saving integrationist benefits of LSP, it is not out of bounds to say LSP deserves a return to full funding from Louisiana legislators in the 2017 legislative session,” wrote Benson. Read more

Energy & Environment
Electricity Generation From Existing Sources is Cheapest, Report Says
Michael McGrady writes about a recent report published by the Institute for Energy Research (IER) that concludes most existing electric power plants produce electricity with significantly lower costs than new-generation resources, such as wind and solar energy. Renewable-energy subsidies and the current regulatory push to promote wind and solar power, McGrady notes, have forced the premature retirement of coal-fired power plants and led to energy price increases. Electricity from new wind and solar power is 2.5 times to five times more expensive than electricity from existing coal and nuclear power. “Our study suggests existing power plants should continue to operate until electricity from them is more expensive than power from new equivalent replacements,” said report co-author Thomas F. Stacy. “For each major power plant technology, the average existing plants produce at a cost well below the cost from new power plants that might replace them.” Read more

Health Care
Research & Commentary: Medicaid Expansion Costs Continue to Grow
Thirty-one states, in addition to the District of Columbia, have chosen to expand their Medicaid programs under the Affordable Care Act (ACA) and 19 have refused to do so. Medicaid is already placing severe financial strain on state budgets and the program has a proven track record of failing to provide cost-effective and efficient care for those in need. In this Research & Commentary, Senior Policy Analyst Matthew Glans examines state Medicaid programs, how costs are running out of control, and several proposals for reform. “In a new report from the Department of Health and Human Services (HHS), an examination of Medicaid’s finances found the average cost of ACA’s Medicaid expansion enrollees was nearly 50 percent higher in fiscal year 2015 than the levels HHS had projected the previous year,” Glans wrote. Read more

From Our Free-Market Friends
The Buckeye Institute Launches New Website, Logo, and Look
Much like Ohio’s beloved state tree, The Buckeye Institute has deep roots going back to the organizations founding in 1989. On August 30, The Buckeye Institute announced the launching of a new look, logo, video, and website, which will allow it to engage state policymakers, the media, and supporters like never before. The new website highlights important policy issues, including health care, criminal justice, energy policy, and access to jobs. The Buckeye Institute will continue to grow free-market policies that enable people to lead fulfilling lives and cultivate those successful policies in other states beyond Ohio. View the new website here