The battle lines in the sports fantasy gaming debate were drawn and the sparring was under way: game of chance vs game of skill. Then the entirely unpredictable jolted the Alabama House of Representatives on Tuesday. The chamber’s electronic vote monitor blinked out and went kaput.
Once the voting system was temporarily fixed, House members passed the “Fantasy Sports Act” by five votes, an outcome that surprised gambling foes.
One of them was Joe Godfrey, executive director of Alabama Citizens Action Program, which is funded by churches that oppose gaming of any kind. He doubted that the “Fantasy Sports Act’ would stand up to legal scrutiny.
He suggested that the bill was subterfuge of sorts. Alabama’s constitution sternly prohibits gambling, but the bill isn’t written as a constitutional amendment that would have to go before voters. Instead, Godfrey said, it’s written as a straightforward statute for lawmakers to decide.
Proponents of the bill couldn’t disagree more. They contend the bill aligns with the public’s wishes, will stand up to legal challenge, and further, that there’s no gambling going on in daily fantasy sports.
Watching events play out in Montgomery are two daily fantasy sports giants: FanDuel and DraftKings.
The two provide fast-paced fantasy sports through online portals, allowing gamers to create teams of real-life players, then enter into myriad competitions in which winners are decided by real-life performance statistics. Gamers can put in their own dollars, and possibly claim cash payouts if their teams do well.
“Exhaustive research on years of data conclusively demonstrates that fantasy sports are dominated by skill; they are not chance-based games, and thus they are not gambling,” said Marc La Vorgna, spokesman for the two companies.
Risky for GOP
The House approved HB354 following a lengthy and sometimes animated discussion that included a decree from bill supporter Rep. Alvin Holmes, D-Montgomery, that he was prepared to “out” lawmakers who privately wager on sports events.
HB354 now heads to the Senate and could be on Gov. Kay Ivey’s desk before month’s end. Senate President Pro Tem Del Marsh’s spokesman William Califf said the bill is likely to surface next week in committee.
Sen. Tom Whatley, R-Auburn, who sponsored an earlier version of the bill and who scoffs at the notion that daily fantasy sports is akin to casino gambling, said he believes that it has a good shot of clearing the Senate.
But Steve Flowers, a political columnist and commentator based out of Troy, said Republican supporters of the bill may risk a backlash back home. “A vote for that would be perceived among evangelical or right-wing Republican voters as a vote for supporting gambling,” said Flowers. “It can be construed that way by a political action committee.”
The bill calls for a 6 percent tax on fantasy contest operators’ gross revenues from Alabama gamers for the preceding 12 months. Revenues from that tax would be funneled into the state’s General Fund, and the state estimates collecting least $216,000.
Also, major fantasy gaming operators would have to pay annual registration fees of $85,000 each to the state. The payments by DraftKings and FanDuel alone would deliver an immediate $170,000.
The House gave approval on a 43-38 vote, with 21 Republicans joining Democrats in support. Only one Democrat, Rep. Rod Scott, D-Fairfield, voted against.
“I think a lot of Republicans look at it as a source of revenue,” said Godfrey. “They are seeing it as a revenue stream and are convinced it’s a game of skill and not gambling. Some of them play it and are not addicted to gambling so it’s not a big deal to them. But people addicted to gambling get caught up in it.”
Godfrey referenced Auburn resident Josh Adams, whose story was played out nationally in both The New York Times and the PBS Show “Frontline.” Adams was featured as a recovering gambling addict whose foray into fantasy sports gaming led to further problems.
Adams, though, told AL.com last month that he favors the bill, believing that responsible players ought to be able to enjoy daily fantasy sports if they wish. His caveat: That the industry provide clear warnings to players – such as advertisements for 1-800-Gambler — so addicted gamblers stay away.
The industry doesn’t support any kind of mandatory warning. To La Vorgna and others, fantasy sports gaming is similar to a golf or fishing tournament in which the skill of the player enables him or her to rise above competitors.
Godfrey said that despite the industry’s claims, powerful interests in Las Vegas and elsewhere view daily fantasy sports as gambling, and thus as major rivals. Most notably, Godfrey said, were comments from casino executive Sheldon Adelson that “there is no question about it.”
For now, no one can play daily fantasy sports within Alabama’s boundaries. In 2016, then-Alabama Attorney General Luther Strange – now a U.S. senator – declared that fantasy gaming is illegal, and prohibited it effective last May 1. DraftKings and FanDuel each received cease-and-desist letters.
And, it’s no sure thing that fantasy gaming could quickly get up and running again if the bill becomes law.
Alabama’s new attorney general, Steve Marshall, shares Strange’s concerns.
Jess Brown, a retired professor of political sciences at Athens State University, said the bill’s backers would have to “walk very carefully” in how they presented its merits to a judge.
In his opinion, the “politics surrounding the state constitutional interpretation of the issue” appear to “favor those who will go on to challenge it.”
But supporters in the Legislature say they are merely responding to their constituents. Some have said they’ve been inundated with calls to get on board with the bill.
Alabama is among 20 states known to be considering laws to legalize fantasy sports gaming. Ten other states, including Mississippi – which allows casino gambling – have passed such laws already, most within the past year.
“The House passed a sensible, thoughtful bill that takes the best regulations in 10 other states with fantasy sports laws and crafts the right framework for Alabama,” said La Vorgna, the FanDuel and DraftKings spokesman.