The Senate Tourism and Marketing Committee unanimously approved legislation on Wednesday that would legalize fantasy sports contests.
Under existing law, there are no regulations relating to fantasy sports.
Sponsored by Huntsville-Republican state Sen. Paul Sanford, SB325 would establish the Fantasy Contests Act and provide for the registration of certain fantasy sports operators conducting fantasy sports contests within the state.
Specifically, the bill:
- Sets the registration and annual renewal fee for operators
- $5,000 for new operators
- $85,000 for existing operators with more than 5,000 customers
- Sets the minimum playing age at 19
- Excludes contests based on collegiate and amateur events
- Installs consumer protections comparable to those in other states
History of Fantasy Sports in Alabama
In April 2016, former state Attorney General Luther Strange sent cease-and-desist letters to two Daily Fantasy Sports companies — DraftKings and FanDuel — after determining that paid daily fantasy sports contests constitute illegal gambling.
In daily fantasy sports (DFS), participants pay to create a roster of players, then pit their roster against those of other participants. Whomever’s roster performs the best that day within a certain pool wins prize money through the site.
According to Alabama code section 13A-20-12, a person participates in gambling if he or she “stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.”
Gambling in Alabama is illegal, with a few exceptions including buying securities and commodities, insurance, and some grandfathered activities.
DFS sites often contend they are games of skill, not of chance, and thus aren’t covered under most states’ gambling laws, nevertheless the companies complied with Strange’s request.
Sanford contends 400,000 Alabamans played fantasy sports before it was banned from the Yellowhammer State.
Previous legislative attempts to legalize fantasy sports
For three years now state lawmakers have endeavored to legalize fantasy sports. Last year the House passed its version of a bill doing just that, but the Senate adjourned for the session without ever taking it up.
The bill now advances to the full Senate.