For that type of bill to become law, the state would first need to legalize Internet gambling altogether, he said.
In California, the Assembly's Committee on Governmental Organization has scheduled a hearing this month, to which representatives of the big daily fantasy sites, consumer groups and other interested parties have been invited. Committee Chairman Adam Gray, a Democrat, has a bill that would license and regulate the sites through the California Gambling Control Commission.
Gray said the emergence of daily fantasy sports this fall was hard to miss. "For a sports fan as I am, I didn't miss the barrage of commercials. It seemed clear to me that we were quickly going to get to a place where regulatory oversight was needed."
He said there seems to be both an element of skill in the games, as well as an element of chance. California law has a "predominant purpose test," which determines an activity to be gambling if greater than 50 percent of the outcome is derived from luck.
In New York, the state has something called the "material element test," which determines that the activity is one of chance, as long as chance plays a "material role" in the outcome.
The differing standards may influence each state's rules on daily fantasy sports.
Gray said his bill would include a revenue element, probably a licensing fee, to help pay for the costs of administering the regulations.
Daniel Wallach is a sports and gaming attorney with Becker & Poliakoff in Florida, where he said lawmakers are considering regulations that Wallach characterized as "friendly" to the daily fantasy industry.
He said many lawmakers in Florida and in some other states think the sites should be legal, but unavailable to minors, and the public should be protected from insider gambling.
Insider trading was raised this fall when allegations surfaced that site employees were placing bets using secret information. A DraftKings employee won $350,000 at FanDuel in a week. Employees of the two sites have now been banned from playing on either site.
Protecting the public from scams and insider trading factored into the regulations from the Massachusetts attorney general, and other states are considering similar rules.
Wallach, who does not represent fantasy sites, predicted that a year from now, there will be “more legislative clarity, but it will be a hodgepodge.”
"It will be legal, but how it's regulated will vary state to state," he said.
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