Following the terms of an agreement that DraftKings and Fanduel had signed with the Attorney General’s office in Idaho, they have stopped offering real money games to residents in the state, on Monday, 1 May 2016. The sites have also signed a similar agreement with the Alabama AG and have stopped offering real money games in the state this week as well.
Idaho AG on DFS
Lawrence Wasden, the Attorney General (AG) of the state of Idaho issued a press release explaining the details of the agreement that was reached with the daily fantasy sports (DFS) operators, FanDuel and DraftKings after “three months of negotiations.”
The agreement went into effect on May 1, 2016 and the sites stopped offering their paid services in Idaho.
DFS is Gambling
While over 30 states in the country are clamouring to pass legislation to decide the fate of DFS in their states, many have reached the conclusion that DFS should be considered illegal gambling; Wasden is amongst those State AGs that have decided that DFS violates gambling laws in the state.
Wasden said, in the press release, “The concern I have is that the paid daily sports offerings provided by these companies constitute gambling under Idaho law. 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.”
As mentioned in this press release, Wasden and his office started to review FanDuel and DraftKings and their websites in January 2016, as he realised concerns regarding the legality of the contests that were under offer. Gambling is prohibited in the state of Idaho except for the state lottery, pari-mutuel betting as well as 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 added in the press release. “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.”
Besides stating the legality of DFS under Idaho laws, the AG mentioned several other points with regards to such online offerings.
He mentioned that while the request sent to the DFS operators asked them to shut down their real money services, they were still welcome to offer contest that were free to play, as risking money for the chance to win a prizes is what is considered illegal in Idaho; the attorney General had no other reason to ban DFS in his state.
Wasden also mentioned that the legislature could activate measures to legalise and regulate DFS contests, or that contests could “resume if a court with authority and jurisdiction in Idaho rules in favour of any form of such contests.”
The letter also stated that the DFS sites could resume offering alternative paid tournaments in the state, provided they give the Attorney General’s office a 30 day notice, to “evaluate the proposed contests to determine whether they comply with Idaho law.”
It has also been clarified that by signing this agreement the DFS sites, DraftKings or FanDuel did not provide “an admission of liability or evidence of wrongdoing”.
Lastly, it was mentioned in the release that while they named the DFS giants, FanDuel and DraftKings, and made general statements about the services fantasy sports operators provide, they made no specific mention of any other DFS operators.
DFS operation around the country
Idaho became the 11th state where the State AG delivered an opinion stating that daily fantasy sports constitutes as gambling under state law; these negative opinions have largely resulted in DFS providers withdrawing paid services for residents of that state.
Outside of the five state, where DFS sites have never operated – Louisiana, Washington, Iowa, Montana and Arizona, DraftKings and FanDuel have both left five other states in the last six months – Nevada, New York, Mississippi, Hawaii and Alabama. The AG of Tennessee, Herbert Slatery, also delivered a negative opinion regarding the legal standing of DFS but that was rendered moot by a bill, which shortly after, was signed into law. Both the DFS giants also provide services in the state of Georgia, Vermont and Illinois, despite negative opinions that were delivered by their AGs. Texas is the only state where there is divergence between the two providers, while FanDuel pulled their services, on Monday, after reaching an agreement with the State AG, DraftKings decided to challenge the motion and fight the AG in court. Finally, Mississippi could become another state where paid DFS services may become reinstated; State Governor, Phil Bryant has a bill on his desk that could change the law, once signed.
Reaction from the DFS Giants
FanDuel released a statement for the players in Idaho saying, “We believe FanDuel has always operated within the law in Idaho, however, as we continue to evaluate the legal framework, we have decided to suspend our paid operations in the state. As has always been the case, users in Idaho can withdraw their funds at any time.”
FanDual requested their fans go online and sign a petition to show support for the game and further added,“We are continually working to clarify the law and look forward to working with legislators to enact consumer protections so that we can bring our paid contests back to Idaho sports fans once again.”
DraftKings also made a statement saying, “While we disagree with the Attorney General’s conclusions and know that daily fantasy sports players join in our disappointment that we are ceasing operations in Idaho, we look forward to continued and constructive engagement with state legislators. DraftKings is working with lawmakers across the country to enact fantasy sports legislations, so that our loyal fans can continue to enjoy the games they love.”