An industry representative last month told state gambling regulators who decided they have no authority over online fantasy sports that the contests are legal in South Dakota.
Finan told the state Commission on Gaming last month that fantasy sports is predominantly based on skill rather than chance, making it legal in South Dakota. The games in which customers pay to put together rosters of real-life professional athletes in order to compete against others in online leagues have come under heavy scrutiny this year after both Boston-based DraftKings and New York-based FanDuel spent millions of dollars on advertisements pitching the games to casual sports fans ahead of the 2015 NFL season.
Jackley has reminded South Dakota residents that they could run afoul of other states’ laws, depending on the jurisdiction where the wager is received.
Jackley said he would like state lawmakers to provide a clearer definition of where daily fantasy sports wagering falls under state law.
“I’m a strong believer that if you’re going to take away somebody’s liberty and freedom, you need to be satisfied the law is clear,” he said.
Jackley said his decision was based in part on uncertainty over whether the contests are predominantly skilled-based or constitute illegal gambling under state law. The industry may pursue legislation to clarify that fantasy sports are exempt from state gambling oversight and impose consumer protection measures on operators.
A DraftKings employee winning $350,000 in a contest on rival FanDuel earlier this year beating more than 200,000 other players raised questions about possible insider trading.
Marty Jackley, South Dakota’s top prosecutor, released a statement Monday that he won’t prosecute those who assemble their own fantasy football teams and bet on the game results.
“I will continue to consider other alternatives including potential civil remedies and National Attorneys General joint action aimed at protecting the intent of our constitutional and statutory provisions.”
The popularity of fantasy sports betting has spread online to become an industry of billions of dollars trading hands.
“Based on the current state of uncertainty, including the ongoing debate on whether daily fantasy sports wagering is predominately a permissive game of skill or and an unlawful game of chance, it will not be my intent to seek felony indictments here in South Dakota absent a clearer directive from our state legislature,” Jackley said.
Daily fantasy has gained popularity after both Boston-based DraftKings and New York-based FanDuel unleashed a flurry of on-air, online and billboard ads promoting the games to casual sports fans.. Finan spoke for the Fantasy Sports Trade Association, DraftKings and FanDuel, two companies that are the target of the New York attorney general’s office.
Last month, a gambling advocate and lobbyist said that fantasy sports betting is based on skill and is not a game of chance, so it is not illegal in South Dakota.
Jackley said Monday he will continue reviewing alternatives such as civil remedies through the courts and action with other state attorneys general.
Finan, director of public affairs at DraftKings, said in a statement Monday that the company welcomes Jackley’s decision and said the firm looks forward to working with the attorney general and the Legislature.
“We strongly agree that any government authority should review the facts and the relevant law very carefully before taking away one’s liberty and freedom to play the fantasy sports games they love and have been playing for years,” Finan said.
Industry lobbyist Griffin Finan has said more than 25,000 South Dakota residents are estimated to participate in daily fantasy sports contests each year
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