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Proposed DFS regulations would effectively ban contests in Ohio

A new bill introduced by Ohio Senator Bill Coley aims to establish strict controls on daily fantasy sports (DFS), barring operators from taking a cut from contests they offer.

Senate Bill 356, if signed into law, would effectively drive DFS companies from the state. It sets a condition that bans DFS operators from taking a cut from any prize pool they offer to customers.

This means that if 10,000 people pay a US$5 entry fee for a contest, the operator must may out $50,000 in prizes. It would be breaking Ohio law if it takes some rake from the entry fees.

This ultimately makes DFS totally unprofitable in the state, and in effect serves as a ban on operating contests in Ohio.

eSports would also be affected by the proposed legislation. Alongside DFS, it would be classed as a “scheme of chance.” Any contest based on eSports would also be required to pay out all entry fees to participants.

While a number of states have been proactive in either legalising DFS and introducing a tax rate for contests or a licensing regime for the game, Ohio’s Attorney General issued an opinion saying that DFS was not specifically regulated or banned under the Unlawful Internet Gaming Enforcement Act (UIGEA).

However it added that current consumer protection legislation may not provide enough controls for daily fantasy customers. This helped DraftKings and FanDuel throw out a lawsuit accusing the pair of operating illegally in Ohio.

Coley’s legislation will be fought by DraftKings and FanDuel. In a joint statement the operators accused the Senator of being isolated from Ohio fantasy sports players and isolated from his caucus, which they say does not support his efforts.

“Just this year, eight states have already passed laws affirming millions of fantasy sports fans can continue to play,” they said. “These policies have been vetted, proven and established and we hope Ohio is the next state on the list.”

Having been introduced earlier this week, the bill is yet to be scrutinised in committee.

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