Will Olympia loosen rules for fantasy sports in Washington? That was the central question during hearings last week.
Inside sports business
OLYMPIA — Barry Gipson looked on attentively Thursday as the legalization of fantasy sports in Washington was discussed in front of those tasked with stomping out all paid versions of such games.
In a crowded hotel conference room in Olympia, commissioners from the Washington State Gambling Commission (WSGC) listened as two of their special agents gave a public presentation on the nation’s fantasy-sports industry. Washington is one of only five states that ban all fantasy-sports wagering, but efforts are under way in our Senate and House of Representatives to legalize some form of it.
And that would delight Gipson, 41, a Navy recruiter from Puyallup who plans next year to open a bar devoted to fantasy-sports play.
“I play with my buddies right now and it’s free, with no entry fees or cash prizes,’’ Gipson said. “I’m going to do the bar either way, but if they made it legal to play for some cash, that would be right up our alley because that would keep the customers coming in.’’
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There are two types of fantasy sports: full season and the more controversial daily version. Here in Washington, we consider both to be games materially impacted by “chance” and akin to gambling.
But advocates want to decriminalize some fantasy sports — mostly the full-season variety involving friendly, low-wager play among pals — as a game of “skill.” After all, there’s arguably more skill required to win those games than in buying state lottery tickets legally sold here.
Gipson plays season-long fantasy, which involves drafting a fictitious roster of players and accumulating points based on their statistics compiled in real-life games. He insists his biggest thrill comes from studying players, staying updated on injuries and making requisite roster changes as each season progresses.
“It’s not merely luck,’’ he says.
Daily fantasy sports (DFS) operate in similar fashion, but over just a single day, or lone NFL weekend. And critics say the luck component is huge because on-field sports performance fluctuates far more from game to game than it does over an entire season.
The DFS industry, launched in 2009, has surged in user numbers, investor funding and advertising the past two years. Two companies, FanDuel and DraftKings, control 95 percent of a multibillion-dollar industry that’s smaller than season-long play, but growing exponentially.
FBI and Justice Department investigations were recently launched after a DraftKings employee won $350,000 playing on FanDuel. Along with allegations of astronomical odds faced by players and “insider trading” by DFS employees, it’s possible daily fantasy could eventually be outlawed federally the way online poker was.
Federal law for now continues to exempt fantasy sports from gambling statutes. But it also declares that the exemption does not override state laws that ban such play.
Commission special agents Tyson Wilson and Dan Frey told WSGC commissioners during last week’s presentation that the situation remains “very fluid” nationwide as states review laws. Nevada last month outlawed unlicensed daily fantasy play, while New York moved to ban DFS and ordered DraftKings and FanDuel to cease operations there.
Here in Washington, where fans are banned from accessing DraftKings and FanDuel sites, it seems unlikely DFS has any chance of legalization amid the controversy. Wilson warned commissioners that any attempts here to legalize fantasy sports could waste time and money if the federal government ultimately pulls its legal exemption and outlaws DFS or all fantasy play nationwide.
Instead, those seeking legalization here are homing in on season-long fantasy sports, which, for now, seem less likely to face a federal ban.
Sen. Pam Roach (R-Auburn), sponsor of Senate Bill 5284, introduced last January to legalize fantasy sports, is seeking amendments that place “sideboards” around what defines a game of skill. Possible modifications include a 50-50 model — limiting games to a maximum $50 cash buy-in and 50 players.
“I want to make the water-cooler guys legal,’’ she told me in an interview. “And the rest of it, those (DraftKings and FanDuel) guys on TV commercials … is not what I’m doing.’’
Roach shared those views with the WSGC commissioners during a public-comment session following last week’s presentation.
“Once we decide what a game of skill is,’’ she told the commissioners, “then everything else becomes a game of chance.’’
And that rigid definition, she added, would make any legalized fantasy sports much easier to regulate.
The gambling commission can only enforce laws, not change them. But the WSGC says it organized the presentation to be “proactive” in informing the public and its commissioners about the issues and how to prepare for future changes.
“I think we’re all babes in the woods on this issue,’’ commissioner Ed Troyer told Roach.
A public hearing on Roach’s plan goes before the Senate Commerce and Labor Committee next Friday. It’s a first step in a potentially years-long process that future bar owner Gipson hopes will add low-stakes wagering to an activity now a focal point of his life.
“It’s addictive,’’ he says of the games.
And those tasked with a decision on altering the law will ultimately have to decide just how much “addiction’’ our state can tolerate, if any, before it becomes a problem.