Daily Fantasy Legality in the United States
Daily Fantasy Sports (DFS) rose to the front of America’s national consciousness like few things ever have, inundating the populace with a barrage of commercials touting the riches to be had on sites like DraftKings and FanDuel. With that increased prominence, however, comes increased scrutiny from the government and lawmakers that has led to legislation in a growing number of states with an eye towards regulating daily fantasy games.
To help those curious as to the legality of these games wherever they live, we have put together the below state-by-state map and following guide to help navigate the increasingly murky waters around daily fantasy. Both will be updated as necessary as laws and regulation are changed. With so many states proposing and passing laws so frequently, checking back here would be advised.
Non-US DFS players should be advised, daily fantasy sports exists outside the the United States, including the UK and Ireland but the volatility of its legislation in those jurisdictions pales in the comparison to the US. With gambling mostly outlawed in the States, this unique form of online gambling has taken hold but faces staunch rebuttal by some American lawmakers. The UK and Irish governments embraced the DFS-boom more smoothly and thus do no require maps for legislation.
State-by-State Map of Daily Fantasy Legislation in the US
***NOTE*** Any states not mentioned under any of the sections below currently accept players and have not made any moves towards legislation one way or the other.
US States that Currently Accept DFS Players
As of this writing, DraftKings and FanDuel - the two biggest names in the industry - still accept players from the majority of states, nearly 80%. In these states there is nothing to stop players from signing up and creating a team for later that same day, with any earned winnings in their account the next morning.
Daily fantasy is legal in these states thanks to an exception carved out in a 2006 law called the Unlawful Internet Gambling Enforcement Act (UIGEA). That law made it illegal for businesses to knowingly accept payments in connection with the participation of another person in a bet or wager using the internet where such activities are illegal according to state or federal law. By making it illegal for online entities to accept payments meant to be used for gambling, this law shuttered what was at the time a booming online poker industry in the United States, with many such sites essentially shutting down overnight.
Important because of how it relates to the current situation in the United States, however, the law included an exception for fantasy sports. Daily fantasy sports were still years away at the time the law was passed, but this exception is the very reason they were and are allowed to operate in the US without regulation. It is worth noting that several states have passed legislation specifically addressing Daily Fantasy and ensuring it's continued legality. They are as follows:
COLORADO
In June of 2016 Colorado passed a law legalizing daily fantasy sports in the state, and putting them under the Division of Professions and Occupations, with a major function of the office being to set the price of licensing and renewal fees. A nice touch is a provision that allows operators with fewer than 7,500 users to exist with state registration alone, no license required. Consumer protections are also written into the law such as annual audits with a third party and the banning of daily fantasy employees from contests. Amateur sports, including collegiate sports, are also prohibited.
INDIANA
Hoosiers were among the first in the nation to pass legislation legalizing Daily Fantasy, second to only Virginia. On March 24, 2016, then Governor Mike Pence signed the bill into law, spurred on by overwhelming support within the state legislature. Per the law, daily fantasy games are considered games of skill in Indiana and the industry is overseen by the state's gaming commission. There is a licensing fee of $50,000 for operators that buy in to the state early, increasing to $75,000 in the future, with an annual $5,000 renewal fee. Players must be 18 or older to play and operators are required to verify player ages. Similar bans on amateur and collegiate competitions as well as many of the same consumer protections as exist in Colorado are part of the Indiana law.
KANSAS
Kansas is a unique case in that a specific daily fantasy bill has never been presented, it is accepted that a 2015 memo relating to fantasy sports in general makes DFS legal throughout the state. The part of that memo that is of primary importance is the conclusion that State Attorney General Derek Schmidt reached that fantasy sports are games of skill. As of now there does not appear to be any plans or need for a specific daily fantasy law in Kansas and players are free to play at their leisure.
MASSACHUSETTS
In March of 2016 Massachusetts Attorney General Maura Healey outlined a number of regulations that any daily fantasy operators wishing to run games in the state would need to meet. Most notable among those was a playing age of 21 as opposed to 18, the requirement that high-level players be identified as such on the site, and restrictions on how many times a single user can enter a given contest. In August 2016 these regulations officially became law. Notable in the Massachusetts bill is the lack of fees and license costs for operators that follow the AG's regulations.
MISSISSIPPI
In January of 2016 daily fantasy sports were declared illegal in Mississippi, but that decision was overturned just six months later, with the Governor overruling the Attorney General. The Mississippi law is just a temporary measure, with a built-in expiration date in 2017, at which time it will be revisited and the state will decide how to proceed into the future. As it currently stands, however, players in Mississippi can enjoy DFS without fear.
MARYLAND
Maryland passed a law way on back in 2012 affirming the legality of general fantasy sports in the state. A 2014 legal opinion seemed to confirm that daily fantasy sports were covered under this law, but the state is currently seeking further clarification on that point. A law specifically focused on DFS could be in the works, but would certainly come out in the industry's favor.
MISSOURI
June 2016 saw Mizzou Governor Jay Nixon sign a bill legalizing daily fantasy sports in the state. The bill puts such games under the purview of the Missouri Gaming Commission and stipulates that operators must pay an annual fee as well as a tax to operate in the Show-Me State. In effect, those fees and taxes can reach over 20% of an operators revenue total, which has met major criticism from within the industry. Nonetheless, daily fantasy is legal in the state effective August 28, 2016, but operators already in the state will be allowed to continue operations until that date, at which point they must apply for a license.
NEW YORK
This is the big one, as New York was at one point home to 10% of all daily fantasy players in America were located in the state. Legal challenges from the state Attorney General were major news and spurred protests in the state, with many fearing that a loss in the Empire State would signal a near-fatal blow against the daily fantasy industry.
Thankfully for millions of players New York went the opposite direction, becoming the seventh state to pass legislation expressly legalizing the games in early August of 2016. A nearly year-long legal battle has resulted in victory for the daily fantasy industry, with temporary permits allowing operators to get back up and running in the state almost immediately after the ruling, with more permanent regulations to come. This legislation could not have passed at a better time for daily fantasy companies, as the start of the 2016 NFL season is just around the corner.
RHODE ISLAND
State Attorney General Peter Kilmartin wrote in February of 2016 that daily fantasy sports are legal according to extant Rhode Island law. He did, however, recommend the legislature pass an official law ensuring the industry's standing in the state, something that has been introduced.
TENNESSEE
The Volunteer State takes the bronze medal when it comes to passing daily fantasy legislation, finishing behind only Virginia and Indiana. Governor Bill Haslam signed the state's bill allowing the games into law at the end of April 2016, with the bill scheduled to go into effect on July 1. Tennessee also represents the first state where a State Attorney General's NEGATIVE opinion (issued just weeks before the bill became law) was overturned by legislation. The Tennessee law is also notable for being much friendlier to small-scale operators, charging only a 6% tax on revenue from the industry.
VIRGINIA
Virginians took the lead in the daily fantasy industry, becoming the first state to sign a bill into law specifically designed to legalize and regulate daily fantasy, which was done in March 2016. Noteworthy in the Virginia legislation is the $50,000 fee an operator must pay to operate in the state, which was met with criticism from smaller daily fantasy operators. Time will tell how influential that provision will be in future laws.
WEST VIRGINIA
July 2016 saw the West Virginia Attorney General's office issue a statement that state law does not prohibit the playing of fantasy sports games. This is in relation to a recently-passed bill that made fantasy sports legal without specifically singling out daily fantasy games.
US States that Currently DO NOT Accept DFS Players
Despite the exception in UIGEA, there are a number of states that have seen fit to classify daily fantasy sports similarly to traditional gambling, and as a result most (if not all) trustworthy sites will not accept players from those states. There is some hope, however, as legislators routinely attempt to introduce bills that would legalize the industry in these states. If any gain major traction, we will update the status of that state, but until then here is a rundown of the states that do not allow daily fantasy players, and some specifics on the relevant laws.
ALABAMA
Early April saw state Attorney General Luther Strange decree that daily fantasy sports are illegal gambling under Alabama law. He also sent letters to DraftKings and FanDuel telling both companies to leave the state by the start of May, which they complied with. There is still active legislation in the state that could legalize the industry.
ARIZONA
In Arizona, it IS legal for a group of friends to run a fantasy league, called social gambling in the state. This is legal even if money changes hands. However, gambling regulated by an outside company is not permitted, and since fantasy sports are considered social gambling when allowable, they fall under the state’s law. In Arizona, the only legal forms of gambling are all run by Native American tribes, with 1 to 8 percent of gross gaming revenues from the agreement going back to the state. Since the passage of the law Arizona has received over $1 billion from tribal casinos.
In 2014 a bill was introduced in the state that would have allowed Arizona residents to play fantasy sports with prizes on the line, but did not pass due to concerns over how it would impact existing agreements with the tribes. The reason for the caution in that case is due to a provision that would see Tribal contributions to the state drop below a percent if the state legalizes new forms of gambling, which makes it extremely unlikely that anything will change in the state anytime soon.
DELAWARE
Delaware put it's foot down on daily fantasy in July 2016, asking industry leaders to add the state to it's list of states that do not allow users to play for cash prizes. This is a particularly disappointing result for Delaware players as it came about largely as a result of failed attempts at legalizing and regulating the games in the state.
HAWAII
Hawaii is a state of dueling bills in both the house and the senate. Currently players are not accepted from America's youngest state following a decision from state AG Doug Chin that daily fantasy sports constitute illegal gambling per state law. A pair of bills have been introduced in the state that would classify DFS as games of skill, while opposing bills would definitively classify them under gambling law. All of which implies that the status quo in Hawaii will remain as is for the foreseeable future.
IDAHO
May 2016 saw Idaho AG Lawrence Wasden release a statement concluding that the structure of daily fantasy contests falls under his state's definition of gambling. That same statement announced that FanDuel and DraftKings had agreed to leave the state and discontinue running any cash games in Idaho.
IOWA
Iowa has rather unique gambling laws regardless of the contest in question, as penalties for breaking them can change based on the amount of money wagered. As it applies to daily fantasy, however, the term social gambling once again comes into play. While social gambling is legal, if a certain amount or more is wagered (generally considered to be around $50), it crosses a line and becomes a form of gambling that requires a license.
Since the prizes for daily fantasy games regularly exceed that amount, sites have decided not to accept Iowans as players. A pair of bills are working their way through the state, however, that would exempt daily fantasy sports from the state’s definition of gambling, but as of now daily fantasy remains a no-go in The Hawkeye State.
LOUISIANA
Louisiana is home to a number of riverboat casinos, and is one of the most liberal states in the nation when it comes to land-based gaming. However, a bill passed nearly 20 years ago in 1997made online gambling in the state illegal, and the definitions therein are very strict. That bill was passed at the dawn of the online gambling age, and has remained on the books as is despite advancements in the industry.
Also causing trouble in the state is a judgement written in 1991 by the Louisiana Attorney General that classifies fantasy sports of any kind as gambling whenever a cost is incurred by participants. While the judgement is non-binding, it was taken into consideration when designing subsequent legislation. Finally, while social gambling is legal in the state, it becomes illegal if someone takes a cut or fee for managing the transaction, which is pretty much the definition of daily fantasy’s business model.
In Early 2015 a state representative introduced legislation that would have carved out an exception for fantasy games similar to the one present in UIGEA, but was met with enough opposition that it was voluntarily deferred so that it could be amended to address concerns from other representatives and interest groups. There is currently no timetable for re-introduction of the Louisiana legislation.
MONTANA
Montana players run into trouble because online gambling is illegal, even though fantasy sports gambling is allowed. Montana’s current Gambling Control Division Administrator Rick Ask has been quoted as saying, "You can run a live fantasy league, where guys get together at a tavern and run a season-long league."
The Internet is the sticking point for many of the states that do not allow daily fantasy, as fears over security and the ability to enforce age restrictions drove early legislation that is still on the books. That couples with differing standards of differentiation between games of skill and chance to create no-go zones for daily fantasy games.
Perhaps most noteworthy when it comes to daily fantasy in Montana is the fact that the state actually runs their own daily fantasy football contest, which players can enter by purchasing entries at Montana Sports Action retailers. A bill that would exempt certain fantasy contests from the state gambling code was introduced in early 2015, but was quickly tabled and is currently dead.
NEVADA
The gambling Mecca of the United States took a thorough look at daily fantasy games recently and determined they qualified as sports gambling. Interestingly, this does not make daily fantasy games illegal in the state, instead meaning that operators wishing to run those games can do so as long as they obtain a Nevada sports pool license.
This effectively outlawed daily fantasy in Nevada, however, as acquiring such a license would be a tacit acknowledgement that their games are gambling, which would invalidate their operations throughout the rest of the country. In the nearly year-long period since the initial announcement not a single major operator has applied for a Nevada gaming license.
TEXAS
Texas AG Ken Paxton has been a vocal opponent of daily fantasy since January 2016, when he wrote a decision that concluded that daily fantasy games count as a bet according to Texas law, and are therefore illegal. FanDuel settled with the state in March of that year and withdrew from Texas in May, while DraftKings filed a lawsuit in that same month of March and continues to operate in the state while battling with Paxton.
So while it is technically possible to play daily fantasy sports in Texas, the atmosphere in the state is tense and could turn at any moment, making it impossible for users to play with confidence. While there was legislation seeking to legalize the industry introduced in 2015, it has since been dropped by the wayside with no new bills in sight.
WASHINGTON
As of right now, all fantasy football when played for money is illegal in Washington, not just the daily variety. This is because Washington defines fantasy football as a game of chance, not skill. Interestingly, a bill is working its way through the state that would legalize season-long fantasy contests by claiming them as games of skill, but keep daily games illegal as games of chance.
US States that Currently Accept DFS Players and have Introduced Regulatory Legislation
The following states are currently in the process of legislating the daily fantasy industry, mostly with an eye towards legalization of the industry. Occasionally, however, bills are being introduced to ban daily fantasy games.
CALIFORNIA
First revealed in February of 2015, California Assembly Bill 1437 was created by Democrat Adam Gray and introduced in its current form in September 2015 after a major overhaul. The bill seeks to introduce state oversight of daily fantasy sports, placing them under the purview of the state’s gaming commission. Licenses would be required to operate in the state, additional regulations would be put in place, and the state would collect licensing fees and taxes from operators.
The bill passed the California Assembly with ease in January 2016, but has hit a major snag in the senate thanks to concerns from a pair of Native American tribes and the noticeable silence from the state's Attorney General. As of August 2016 it appears there will be no further progress on the bill for the remainder of the calendar year.
CONNECTICUT
A bill has been introduced to legalize and regulate DFS in the state, and appears to have relatively smooth sailing towards passage.
FLORIDA
Florida joins California as a state where their Attorney General, Pam Bondi in this case, are remaining pointedly silent on the issue of daily fantasy sports. Bondi has deferred her own judgement until the conclusion of a federal probe into the industry taking place in Tampa. At the same time, bills legalizing the games in both the state house and senate passed with ease in January 2016, but have since stalled, failing to reach committee. A prime suspect in this lack of progress appears to be tied to existing gaming compacts that the state has with the Seminole tribe and concerns as to how a standalone daily fantasy bill might affect those agreements.
GEORGIA
Legislation was introduced in the Peach State in the past made it past a Senate committee vote but was put aside and now appears dead following a February 2016 announcement from Wright Banks Jr., the Georgia deputy AG. That letter made clear the state's desire that DFS leave the state based on current laws, and may have had a hand in scuttling existing legislation seeking to legalize the industry. While FanDuel and DraftKings still operate in Georgia, that status could change at any time.
ILLINOIS
This bill received a lot of attention, coming as it did on the heels of a number of alarming stories in the New York Times about daily fantasy. Officially filed on October 27, 2015 by Representative Mike Zalewski, the bill seeks to apply a number of regulatory restrictions on daily fantasy in Illinois. Chief among those concerns are ways to ensure that daily fantasy employee and residents under 18 can’t participate, and would allow sites to check if players have child support or tax lien judgements against them and potentially deny them access because of those judgements.
Taken together, it becomes apparent that the major focus of the bill is consumer protection. It is important to note that the current version of the bill would NOT classify daily fantasy as gambling in Illinois. One of the bill’s co-sponsors has stated a belief that the bill will not make any legislative advancement until spring of 2016.
Update: In late December, Illinois Attorney General Lisa Madigan issued an opinion stating that daily fantasy sports constitute illegal gambling under state law, and said she expected FanDuel and DraftKings to amend their terms of service to reflect her opinion and no longer accept players from Illinois. However, both sites filed separate countersuits against Madigan challenging the opinion, allowing them to continue operating in the state until a conclusion in the case is reached.
The most recent developments in Illinois are not promising, as Zalewski did not bring his bill up for a vote before the state legislature adjourned at the end of May. Theoretically the bill could be voted on during a summer session or veto session, but neither seems likely. With the bill tabled for now, the shift focuses to the specter of a court case between Madigan and the daily fantasy titans.
At the same time, a bill that would outright ban the games in the state was introduced by Representative Scott Drury in early June 2016. Drury's bill would focus solely on daily fantasy games and classify them as illegal gambling throughout the Land of Lincoln. With so much in play and New York coming to a favorable resolution, Illinois may very well be the next major DFS battleground.
KENTUCKY
A house bill has been introduced to legalize and regulate the industry.
MICHIGAN
The state of Michigan saw a member of the state Gaming Control Board question the legality of daily fantasy games in late 2015, but no official actions or decisions were made beyond that. Since that time a bill has been introduced that would create an exception for the industry within the existing state gambling laws.
MINNESOTA
On October 26, 2015, state representative Joe Atkins announced his intention to introduce daily fantasy legislation in 2016. Atkins says that his bill would allow for daily fantasy to continue as a lawful activity in Minnesota, but require websites offering the games to be licensed through the state. The plan is focused on consumer safety, with the state gaining the ability to perform background checks and audits on licensed sites. As of August 2016, three different house bills have been introduced with an eye towards legalizing and regulating the industry in Minnesota.
NEBRASKA
A pair of legislative bills have been introduced that would regulate and legalize daily fantasy sports in the state.
NEW JERSEY
Former Atlantic City Mayor and current Senator Jim Whelan has created a draft of legislation that he plans to introduce, but has not yet filed. Currently he is circulating it among a variety of groups in the state, including a number of gaming-related government divisions, seeking input on how best to proceed.
New Jersey already has some of the strictest gaming laws in the country, meaning legislators have plenty of experience in that area. To that end, Whelan’s bill is much more focused than similar bills from around the country, and it outlines a regulatory scheme that draws on the ones the Garden State already has in place for online poker and gambling.
As it currently exists, the bill would require daily fantasy operators to acquire a license from the state, which would come with a fee. It would allow casinos to partner with daily fantasy sites to offer games, and classify daily fantasy as a game of skill, not chance. The state’s Division of Gaming Enforcement would have regulatory authority over license holders.
Two of the more unique aspects of the bill, however, might not be all that palatable to operators. First, the legal age to play daily fantasy in New Jersey would be set at 21 instead of 18. Second, the bill would classify daily fantasy as an intrastate game, not and interstate one. In practice, this would require the computers and servers that provide the games to New Jersey customers to be physically located within Atlantic City’s boundaries.
Industry leaders also object to the fact that the bill does not expressly declare DFS as a game of skill. A second bill has been introduced that would bar DFS employees from participating in the games.
NEW MEXICO
A house bill has been introduced that would regulate and legalize daily fantasy sports in the state.
OKLAHOMA
Oklahoma has one of the more interesting cases of precedent in the nation, as a 1999 dog hunt contest in the state forms at least some of the basis for the Oklahoma AG considering daily fantasy games to count as bets under state law. A bill has been introduced that would legalize and regulate the industry in the Sooner State, however.
PENNSYLVANIA
Pennsylvania lawmakers have tried a number of different ways to bring fully legal daily fantasy sports to the state, with the odds of success in near-constant flux. The most recent attempts constitute a house bill that was originally designed to address fantasy sports specifically but has since been tied to larger gambling legislation in the state, which may end up being the only way to ensure progress going forward.
As of now (July 2016), that version of the bill has passed the state house and been presented to the senate, where it has not seen any further action. A senate bill addressing DFS alone is also working it's way through the system in Pennsylvania.
SOUTH CAROLINA
A state senate bill has been introduced to legalize and regulate daily fantasy games in the state.
VERMONT
In January of 2016 Vermont announced that daily fantasy games count as illegal gambling under state law. Legislation to legalize the games has been introduced, however, and as of now the majority of DFS operators still accept Vermonters.
WISCONSIN
A pair of bills, one in the assembly and one in the senate, have been introduced to legalize and regulate daily fantasy games in the state.
Other Considerations for DFS Legislation in the US
Any states not specifically outlined above allow residents to participate in daily fantasy sports without any legislation in the works. This means those states exist in the sort of "Wild West" style of the industry, which is the style that the country and the world were were first introduced to. Users in those states may want to proceed with slight caution as the industry remains unregulated in those states, making them more susceptible to shenanigans from operators and fellow players. However, the general increase in scrutiny on daily fantasy should go a long way towards keeping the games on the up-and-up, especially when it comes to major operators like DraftKings and FanDuel.