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Friday, December 8, 2023 | Back issues
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California Makes Move to Regulate Fantasy Sports

SACRAMENTO, Calif. (CN) - A first-of-its-kind bill to regulate the daily fantasy sports industry easily passed the California state Assembly Wednesday, despite questions over the legality of the flourishing activity.

Assembly Bill 1437 received bipartisan support and hurdled the Assembly in a 62-1 vote. The bill heads to a Senate committee for consideration after blowing through the Democratic-led Assembly.

The bill's author, Assemblyman Adam Gray, D-Merced, urged lawmakers to take the opportunity to create safeguards for the hundreds of thousands of daily fantasy sports users in California. Gray acknowledged that while there are valid concerns over the legality of daily fantasy sports, it's up to the courts and California Attorney General Kamala Harris to decide the activity's future in the Golden State.

"The bill does not make a determination of the current legality of the games," Gray said. "That's a question that's been posed to our attorney general and I trust that she's thoroughly studying that question."

Gray said AB 1437 will create safeguards to keep underage users from playing on websites such as FanDuel and DraftKings, and prevent identity theft. If the bill clears the Senate and Gov. Jerry Brown's desk, California would become the first state to attempt to manage and create rules for the popular fantasy game.

Gray's bill received unanimous support from across the aisle, including from Assemblyman Donald Wagner, R-Irvine, who said the bill provides a textbook model of "how [the Legislature] ought to be conducting our business."

"This is an example of us and the industry working collaboratively, getting ahead of the curve by making sure the appropriate protections are in place," Wagner said.

Several states have banned daily fantasy sports, including Illinois, Texas and New York.

The lone lawmaker opposing the bill Wednesday was Assemblyman Marc Levine, D-San Rafael. He also voted against it in a Jan. 6 Assembly committee. Levine has been the target of radio in Northern California due to his strong opposition to the bill and said the fantasy sports industry is "coming after me."

"This kind of public bullying is misleading, and it's embarrassing," Levine said.

Several professional sports franchises are backing the consumer protection bill, including the Los Angeles Lakers and the San Francisco 49ers. The teams claim fantasy sports help market their product and connect with fans.

If the bill is approved, companies would have to apply for a state license, pay regulatory fees and report users' winnings to the state for tax purposes.

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