TRENTON — A bill that would regulate and tax daily fantasy sports in New Jersey is one step closer to landing on Gov. Chris Christie’s desk for approval.
The state Democratic-controlled state Assembly voted 56-15, with three abstentions, Monday to pass the Democratic-sponsored measure, which would establish guidelines and a tax rate for companies that operate such games in the Garden State.
Under the legislation (A3532), the state Department of Consumer Affairs would issue permits to daily fantasy sports operators, as well as casinos and racetracks who partner with the companies.
It would also impose a quarterly fee of 10.5 percent of gross revenues on the operators.
Plus, it would prohibit players who are under 18 and ban the offering of any fantasy games linked to high-school sports.
Top daily fantasy sports companies oppose N.J. regulation effort
The nonpartisan Office of Legislative Services estimates the bill would produce at least $6.6 million in revenue for the state each year.
The measure would regulate only operators of daily or weekly fantasy games run by professional companies — not small-scale season-long fantasy sports competitions conducted among family and friends.
Daily fantasy sports — run by companies such as FanDuel and Draft Kings — have skyrocketed in popularity in recent years, but they have faced scrutiny over allegations of insider knowledge and controversial advertising campaigns.
Sponsors of this bill — and similar legislation in other states — say regulation is needed to make the games more legitimate.
“The time is right for New Jersey to enter the fold with regulations aimed at providing strong consumer protections for our residents,” Assemblyman Vincent Mazzeo (D-Atlantic), a co-sponsor, said after Monday’s vote. “This legislation not only protects consumers, but promotes a positive business environment for fantasy sports operators and their thousands of New Jersey customers.”
Added Assemblyman Ralph Caputo (D-Essex), another sponsor: “This helps keep the games honest and consumers protected.”
The measure now heads to the full state Senate, which is also controlled by Democrats. If the Senate passes the bill, it heads to Christie, who will then decide whether to sign or veto it.
The Senate is considering a similar bill (S1927), though that legislation would impost a 9.25 tax rate on operators. Both houses must pass identical legislation before it becomes law.
Last month, the Fantasy Sports Trade Association estimated that two-thirds of companies have closed or been acquired by competitors since last year.
The industry has launched an expensive state-by-state lobbying campaign as about half of all U.S. states are considering similar bills.
The Associated Press contributed to this report.
Brent Johnson may be reached at bjohnson@njadvancemedia.com. Follow him on Twitter @johnsb01. Find NJ.com Politics on Facebook.
