Daily Fantasy Sports Now Permitted in Missouri

June 2016

On June 10, 2016, Missouri Governor Jay Nixon signed a bill (HB 1941) into law exempting daily fantasy sports (DFS) from state gambling regulations and placing them under state gaming regulations. The new law gives the Missouri Gaming Commission oversight over DFS operators. It also requires DFS websites to pay the Commission an annual license application fee of $10,000, or 10% of the applicant's net revenue from the previous year. Additionally, the law imposes an annual operation fee of 11.5% of a licensed operator's net revenue from the previous year.

Any DFS operators already operating in Missouri prior to April 1, 2016 must apply for a license before October 1, 2016.

The Status of Daily Fantasy Sports in Other States

Missouri joins Indiana, Kansas, Maryland, Massachusetts, Mississippi, Rhode Island, Tennessee and Virginia in permitting DFS. These nine states view DFS as games of skill rather than chance, thus putting them outside the definition of illegal gambling.

Regulating fantasy sports has been a hot-button topic in state legislatures. Many states have proposed legislation regarding DFS and might soon be permitting it. In fact, 21 states introduced legislation favorable to DFS in 2016. In fact, Colorado's governor signed HB16-1404, legalizing DFS in Colorado, on June 10, 2016, the same day the Missouri bill was signed.

Although 18 states have not legislatively addressed DFS, many attorney generals within those states have made statements on its legality. For example, Alabama Attorney General Luther Strange has called paid DFS contests illegal under Alabama law. He noted that although elements of skill are involved, DFS are ultimately games of chance because contestants have no control over their players' performances. Similarly, the New York and Illinois Attorney Generals have deemed DFS illegal gambling. However, South Dakota Attorney General Marty Jackley has stated that he does not intend to seek felony indictments of DFS operators absent a clear directive from the state's legislature.

Arizona and Montana are the only two states in which legislation has been enacted to support the ban of DFS.

If you believe that you might be at risk of violating the gambling laws of the state in which you conduct or play games, contests, or sweepstakes, please contact an attorney in our Advertising, Promotions & Social Media Practice Group.

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