Login | December 13, 2018

New law removes any doubt to legality of fantasy sports in Ohio

Special to the Legal News

Published: January 8, 2018

By the time Major League Baseball's 2018 spring training wraps up in late March, a new state law placing fantasy sports contests within the regulatory scope of the Ohio Lottery Commission will have become effective.

People who play fantasy baseball or any other fantasy contests shouldn't notice anything remarkable about the change, according to the Ohio lawmakers who sponsored the bill Gov. John Kasich signed into law recently.

Rather, the regulation is meant to provide consumer protection to the millions of Ohioans who play and sensible standards to the industry.

"It is critical that common-sense protections are in place for fantasy contest participants, while maintaining an environment that allows this emerging industry to grow within our state," said Rep. Jonathan Dever, R-Madeira.

House Bill 132 was developed and carefully drafted in coordination with Attorney General Mike DeWine's office, the Ohio Casino Control Commission, stakeholders from the fantasy sports industry and Ohio fantasy sports participants.

It updates antiquated state laws to make it clear fantasy contests are legal in Ohio and implements important consumer protections. The reforms aim to create a clear set of regulations fantasy sports companies must follow to operate in Ohio.

HB 132 defines a fantasy contest by using the guidelines already defined in federal law, which specifically states fantasy contests are legal contests of skill.

Lawmakers believe the precise definition removes any doubt about the legality of fantasy contests in Ohio.

The consumer protection regulations by which companies operating fantasy sports contests in Ohio must subscribe are characterized as "light touch."

In addition to protecting players' privacy and promoting online security of players' accounts, other provisions of the bill include:

• Ensuring players are at least 18 years old;

• Requiring all fantasy game operators to obtain a state license;

• Offering introductory, new-player on-boarding;

• Restricting employees of fantasy sports contest companies from playing;

• Requiring "highly experienced players" to be clearly identified to all users; and

• Disclosing the number of entries a player may submit to each contest and the number of total entries allowed for each contest.

Another notable provision of the bill is the prohibition of any contest based on a collegiate or high school sport or athletic event.

"House Bill 132 takes steps to protect the rights of millions of Ohioans who engage in the fantasy contest industry," said the bill's other joint sponsor Rep. Robert McColley, R-Napoleon. "This bill strikes a balance of consumer protections and economic growth, ensuring that all fantasy sports businesses, large and small, continue to operate and thrive in our state."

The Senate was able to pass the bill after lawmakers adopted several amendments, one of which was proffered by the Ohio Harness Horsemen's Association to exclude any pari-mutuel or other horse or horse-racing wagers from inclusion as a fantasy contest.

Without the amendment, the association's Executive Director Rene Mancino wrote in testimony, horse racing pari-mutuel pool wagers handled by out-of-state entities, such as Derby Wars, would fall under the purview of the bill.

"While Derby Wars identifies their wagers as a 'contest,' the program is a pari-mutuel pool, horse racing-based wager on live Ohio racing, where all money in the pool is not returned to the players," Mancino said. "Regulation and oversight for horse and horse racing pari-mutuel pool contests, like Derby Wars, properly lies under the jurisdiction of the Federal Interstate Horseracing Act and O.R.C. Chapter 3769.

"Additionally, regulatory oversight of pari-mutuel pools on live Ohio racing and horse racing licensees is handled by the Ohio State Racing Commission."

The measure passed both houses by large majorities.

Ohio joins 10 other states that have passed similar legislation.

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