Alabama Legislature Passes Daily Fantasy Sports Regulation

Alabama Legislature Passes Daily Fantasy Sports Regulation

The South is moving toward more sports betting legalization, and Alabama is the latest state in the South to move toward sports betting, being a signature away from legalizing daily fantasy sports.

Lost in the mix of more controversial laws, daily fantasy, despite not being official sports betting, is on its way of being legal in Alabama. If it goes well, daily fantasy could lead Alabama to opening up to actual sports betting in the future.

HB 361 was given final passage on May 28 and sent to the desk of Governor Kay Ivey. It has yet to be signed into law, but there’s been no indication that she would veto the bill.

Alabama and Sports Betting

Alabama’s relationship with daily fantasy operators hasn’t been particularly cordial, with Attorney General Luther Strange sending daily fantasy operators a cease-and-desist letter in 2016. At the time, Strange wrote that he believed that daily fantasy violated Alabama gambling laws.

"Daily fantasy sports operators claim that they operate legally under Alabama law. However, paid daily fantasy sports contests are in fact illegal gambling under Alabama law."

The rational is one that’s been echoed across several states in the US, that while daily fantasy players might need to rationally assemble a team, how the players perform will affect the outcome and daily fantasy players have no control over how a player performs, leaving it up to chance.

That exact sentiment is what is about to change in Alabama. The new law scratches the previous definition of fantasy contest in favor of a new interpretation that allows daily fantasy into the state. HB 361 changes the definition to read as such:

Fantasy Contest. A simulated game of skill in which both of the following are true:

  • A. Winning outcomes are determined predominately by accumulated statistical results of performance of individual athletes in actual sporting events.
  • b. Winning outcomes are not based on the score, point spread, or any performance of any single actual sports team or combination of teams or solely on any single performance of an individual athlete in any single sporting event.

The difference between this and the previous definition comes down to section B, which specifically prevents people from betting on score, points spread, our single-factor bets, meaning it has to be essentially a parlay of multiple athletes from multiple teams.

The only other major change is that the tax rate on revenue from daily fantasy operators goes up from 6% to 8%. Not a significant change for players, but one that might make smaller fantasy operators hesitate. DraftKings and FanDuel will likely not care because their name-power will keep them going.

Will Alabama See Sports Betting Soon?

Not likely. Alabama is likely going to need to see some returns from daily fantasy before they delve further into sports betting.

However, with Mississippi being close by and watching revenue from sports betting slowly rise for them, Alabama might be tempted to begin accepting bets sooner rather than later. There’s certainly plenty of sports fans in the state between the two major SEC teams.

But for now, sports fans in Alabama will have to content themselves with playing daily fantasy sports. That should be plenty to hold sports fans over until sports betting itself becomes available.

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