New Jersey has taken a definitive step towards legalizing daily fantasy sports (DFS) in the state after its legislature approved a bill that seeks to regulate and tax the DFS sector. The bill now awaits Gov. Chris Christie’s signature. The bill was cleared with a majority 29-6 vote.
Under the proposed bill, there will be a tax of 10.5 percent on the winnings offered by DFS companies. According to an Office of Legislative Services report, New Jersey could receive up to $6.6 million annually as tax revenue from the DFS market.
In a statement Sen. James Whelan said
It’s a consumer protection measure as opposed to something we’re looking to make a ton of money off of. Hopefully the governor will sign this and we’ll be able to keep daily fantasy sports going in New Jersey. That was always the goal
The measure is a part of many being taken by the state to give its struggling gaming industry a fillip, and comes in the wake of the decision by U.S. Supreme Court to hear New Jersey’s case against a federal law banning sports betting.
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New Jersey’s DFS bill has categorized daily fantasy sports contests as a game of skill and not chance. As a result, it isn’t considered as gambling and will not be under the purview of the Division of Gaming Enforcement. The State Division of Consumer Affairs, which comes under the Department of Law and Public Safety will instead be providing oversight for the industry.
The bill permits casino licensees as well as licensed race tracks to tie up with fantasy sports operators for offering DFS contests. The bill however requires casinos that are offering DFS services to locate all of its servers to Atlantic City. If the DFS site is being operated outside of New Jersey, then at least one of the servers needs to be located in Atlantic City.
The bill includes a number of provisions to protect customers such as restricting those below 18 years from accessing DFS websites. Players who have registered themselves in the casinos’ self-exclusion lists will not be allowed to play. The bill also prohibits DFS operators from running contests that are based on high school sports.
If the bill receives Christie’s approval, New Jersey will become the 12th state to have a legal DFS industry. Illinois is also close on the heels with the state legislature approving a DFS online gaming bill recently.
