Last year InsiderAdvantage was the first to report that the Georgia Lottery Corp. questioned the legality of fantasy sports games in the Peach State. Its Sept. 23 letter to the nation’s two major fantasy sports companies asked what “legal authority” they have to “independently operate fantasy sports games within the state of Georgia pursuant to Georgia law.” This week Attorney General Sam Olens gave an answer in a legal opinion: they are engaging in illegal gambling.
The letter by Georgia Lottery Corp. senior vice president and general counsel Joseph J. Kim reminded Nigel Eccles and Jason Robins, CEOs respectively of New York City-based FanDuel and Boston-based DraftKings, that “the Georgia constitution prohibits gambling generally and only allows certain games which are run by the state” (specifically, by the Georgia Lottery Corp. in order to fund the HOPE scholarship, pre-kindergarten and other educational programs).
A letter from Olens deputy Wright Banks Jr. says the online games (and presumably its statewide advertising) are illegal. That means Georgia becomes yet one more state threatening the lucrative industry’s cash flow.
The Olens opinion dynamited proposed legislation by Sen. Rene Unterman, R-Buford, that sought to carve out a legal protection and designated the betting game as one of “skill” rather than “chance.” Her protection bill has been pulled from consideration— one of many in 16 states seeking to protect fantasy sports operations.
Court battles and their outcomes will clarify the status of this gaming here and elsewhere. In the meantime, sources tell us to watch for Georgia politicians to start receiving fantasy sports operation-derived campaign donations in order to protect FanDuel and DraftKings.
In this context, a lawyer for DraftKings released this statement:
“There is no legal or other basis for depriving Georgians of this popular recreational activity.
DFS is a legitimate business activity that has operated openly and permissibly in Georgia for years. It is the citizens of Georgia, through their elected representatives, who should decide whether they can continue to enjoy fantasy sports.
DraftKings will therefore support legislation that regulates fantasy sports with thoughtful and appropriate consumer protections, and we urge Georgians to tell their elected representatives that they want to be able to continue to enjoy fantasy sports.”
