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Sen. John Bonacic wants to legalize, tax daily fantasy sports

These are apps for online gaming sites, DraftKings

These are apps for online gaming sites, DraftKings FanDuel on Oct. 5, 2015. Credit: Bloomberg News / Andrew Harrer

A key senator has introduced a bill that would make clear that daily fantasy sports games are legal, while charging companies $500,000 to operate in New York and taxing them 15 percent of their gross revenue.

Sen. John Bonacic (R-Mount Hope), chairman of the Senate Racing and Wagering Committee, acknowledged that a lot rides on an ongoing lawsuit filed by state Attorney General Eric T. Schneiderman that aims to shut down DraftKings, FanDuel and other daily fantasy sports companies in the state. But the senator thinks New York should regulate and tax the businesses rather than boot them.

“These are established businesses. Let’s keep it going and regulate it,” Bonacic said Wednesday.

Bonacic isn’t the first legislator to propose a bill effectively legalizing daily fantasy sports – Assemb. Dean Murray (R-East Patchogue), Assemb. Felix Ortiz (D-Brooklyn) and Sen. Michael Ranzenhofer (R-Amherst) proposed similar measures last fall. But as a committee chairman, Bonacic is the most influential legislator to join the fight to date.

Schneiderman, a Democrat, filed a lawsuit last fall to shut down DraftKings and FanDuel -- the two largest daily fantasy sports companies, controlling 95 percent of the market -- calling them illegal gambling operations. The companies claim they offer games of skill, not chance, and are, therefore, legal.

Last month, the appellate division, New York’s midlevel court, issued a stay of an injunction that allows the companies to continue to operate while battling in court.

After the lawsuit began, New York-based FanDuel suspended New York residents from participating in its games, noting that the attorney general has pressured its payment processors.

Boston-based DraftKings, in contrast, successfully sought a temporary restraining order from a Massachusetts judge that prohibits payment processors from halting business with it.

In a memo supporting his bill, Bonacic wrote: “Questions have arisen regarding the legality and integrity of these contests. This legislation seeks to address such concerns and enact a registration process and regulatory oversight to ensure that these contests are conducted fairly.”


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