Daily fantasy sports players in Idaho and Alabama have been advised that the biggest DFS companies—DraftKings and FanDuel—will no longer accept players from the state.
The two companies agreed to stop taking Idaho-based players after negotiating with the state’s attorney general Lawrence Wasden.
Wasden announced that he had reached a settlement with the two sites after three months of negotiations. Wasden has ruled that the games violate the state’s gambling laws.
“The concern I have is that the paid daily sports offerings provided by these companies constitute gambling under Idaho law,” Wasden said in a press statement. “I have a duty to enforce and uphold that law. I commend the companies for negotiating in good faith and agreeing not to make these contests available in Idaho.”
According to the Idaho Statesmen newspaper, the companies, as of May 1, will not allow any consumers based in Idaho to participate in any of their daily paid online fantasy football, baseball, basketball and other sports contests.
DraftKings and FanDuel have agreed to process requests by Idaho participants to withdraw their account balances in a timely manner. The companies will monitor Idaho players based on geoblocking technology or through IP addresses, the agreement says.
Wasden began a review of daily fantasy sports in January. The state’s Constitution prohibits gambling except for the state lottery, pari-mutuel betting, and bingo and raffle games.
“Idaho defines gambling, in part, as risking money or other thing of value for gain that is contingent in whole or part upon chance or the outcome of an event, including a sporting event,” Wasden said in his statement. “My concern is that the daily fantasy sports offerings my office reviewed require participants to risk money for a cash prize contingent upon individual athletes’ collective performances in various future sporting events. As I see it, this falls within Idaho’s definition of gambling.”
The agreement allows the companies to reinstate the games if Iowa’s Legislature legalizes them or if a court with authority and jurisdiction in Idaho rules in favor of any form of such contests, the Statesmen reported.
The companies can also restart offering such contests at any time, but executives have agreed to provide the attorney general written notice 30 days prior to doing so. The notice serves to give the attorney general time to evaluate the proposed contests to determine whether they comply with Idaho law.
The agreement does not constitute an admission of liability nor evidence of wrongdoing by the companies, Wasden said.
Effective May 2, Alabama residents will no longer be able to bet on fantasy sports including DraftKings and FanDuel. Attorney General Luther Strange said the fantasy sports websites reached a settlement to cease all operations in the state. They are required to block access from any Alabama-based IP address and must process requests to withdraw account balances within seven business days. “I am pleased to report that fantasy sports operators DraftKings and FanDuel have complied with my order that they halt paid contests within the state of Alabama,” Strange said.
Alabama is the 10th state to ban fantasy sports betting. More than 700,000 Alabamians, about 20 percent of the state’s population over age 18, played fantasy sports last year, primarily through NFL and NASCAR fantasy leagues.
Strange sent DraftKings and FanDuel cease and desist letters one month ago. He said fantasy sports betting sites are illegal according to Alabama law, because they require an individual to stakes something of value on a contest of chance, even when skill is involved, in order to win a prize. That argument—whether fantasy sports betting is based on skill or chance—is the key to the debate. Strange contends that they are clearly contests of chance, but online fantasy sports enthusiasts disagree.
The legislature considered two bills that would clarify that fantasy sports are legal in the state and “establish the Fantasy Contests Act to regulate the operation of fantasy or simulated contests in the state.” Both bills have been indefinitely postponed.
In Illinois, the Chicago Crime Commission recently said a proposed bill allowing fantasy sports betting in Illinois does not provide enough safeguards. J.R. Davis, president of the non-governmental group, said the legislation “should not pass as drafted.” At issue are background-check provisions in the bill provide that have too many loopholes and could invite organized crime.
Last December, Illinois Attorney General Lisa Madigan determined fantasy sports betting is illegal in Illinois. But the bill’s supporters said it is designed to protect participants from unregulated fantasy-sports betting. The measure also states only individuals age 21 and older can play, and it establishes operator licensing fees.
