It was two years ago when InsiderAdvantage was the first to report that the Georgia Lottery Corp. questioned the legality of fantasy sports games in Georgia. Its Sept. 23, 2016 letter to the nation’s two major fantasy sports companies questioned what “legal authority” they had to “independently operate fantasy sports games within the state of Georgia pursuant to Georgia law.” Later then-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 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 2016 letter from Olens deputy Wright Banks Jr. said 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.
Enter Rep. Trey Kelley, R-Cedartown. He seeks to carve out a legal protection and designate the betting game as one of “skill” rather than “chance.” In this context, his “consumer protection” bill– House Bill 118— has risen from the dead and last Thursday the Senate Regulated Industries Committee voted unanimously to approve the legislation. (Legislatures in 19 states have laws seeking to protect fantasy sports operations.)
The Kelley legislation makes it illegal for anyone 18 or younger to participate in contests on websites such as those run by FanDuel or DraftKings, college athletes would be barred from playing the games and a 6 percent tax on companies that run the leagues would be imposed. That tax could generate hundreds of millions of dollars for the state.
Prospects seem good for Senate passage, but time is running out as General Assembly adjournment looms next week.
