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Daily fantasy sports would be legalized under tentative deal

In this photo illustration, FanDuel one of the

In this photo illustration, FanDuel one of the fantasy sports companies, shows on a smartphone. Fantasy sports companies FanDuel and DraftKings want to be legitimized in New York as games of skill not chance. Credit: Bloomberg News / Andrew Harrer

ALBANY -- State legislators said Wednesday they have a tentative deal to legalize daily fantasy sports in New York, though they would still have to get Gov. Andrew M. Cuomo on board.

Importantly, their proposal would define fantasy sports as a game of skill, not chance — to avoid being labeled illegal gambling, according to Sen. John Bonacic (R-Mount Hope), chairman of the Senate Racing and Wagering Committee. It would charge companies a $150,000 registration fee (or 1.5 percent of revenue, whichever is less) for a three-year license.

The state would also receive an estimated $3.5 million to $5 million by imposing a 15 percent tax on operators’ gross revenue, Bonacic said.

He added that Cuomo’s staff said it was seeking “technical amendments” to the bill, but it wasn’t clear what those might be. The legislation wasn’t immediately available in print.

“We have made considerable progress in terms of daily fantasy sports legislation and I am very optimistic that we will pass a bill before the session ends,” Bonacic said.

Cuomo’s office was noncommital.

“Negotiations on a variety of issues continue as we approach the end of the legislative session,” said Cuomo spokesman Rich Azzopardi.

The deal comes months after state Attorney General Eric T. Schneiderman sued to stop FanDuel and DraftKings — the companies that control 95 percent of the daily fantasy sports market — from operating in New York. Schneiderman contended the daily contests are illegal forms of gambling under the state’s constitution.

But the attorney general and the two companies agreed earlier this year to temporarily halt their legal proceedings to allow state lawmakers to debate whether to allow the contests and create state oversight and regulation of the industry.

The New York Gaming Association, which represents “racino” owners, has strongly opposed daily fantasy sports for money, saying it’s clearly gambling. Racino is an industry term for horse racing tracks that have video slot machines.

Anti-gambling legislators agreed.

“It’s being very deviously crafted to avoid it being looked at as gambling,” said Assemb. Michael Fitzpatrick (R-St. James). “They use words like ‘contests’ . . . But daily fantasy sports is not a game of skill. It’s gambling.”

A lobby group for sports fantasy companies didn’t comment directly on the legislators’ proposal, but sounded optimistic that a deal was near.

“We remain hopeful the sports capital of the world will welcome and support the newest national pastime — fantasy sports,” said Marc LaVorgna, spokesman for Fantasy Sports for All.

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