DFS Updates: New Hampshire and Delaware
July 28, 2017 | By Kevin Vela
With Governor Sununu’s approval of H580 on July 18th, New Hampshire became the 13th state to legalize paid fantasy sports. Lawmakers achieved this victory with little pushback, as New Hampshire officials have never issued a negative opinion about DFS or passed any legislation explicitly banning contests in the state.
The law requires operators to register with the New Hampshire Lottery Commission and comply with standard consumer protection regulation, but is unique in imposing no taxes or fees. Representatives hope that this structure will allow smaller companies to compete in the growing DFS market.
Delaware also scored a major win on Wednesday with Governor Carney’s approval of HB249, becoming the 14th official state (and the 4th this year) to legalize DFS.
The new law is the result of a dramatic legislative shift in Delaware. Just last July the Office of the Attorney General concluded that fantasy sports contests were illegal under state law, a determination that forced FanDuel and DraftKings to leave the state. When the law goes into effect next month, the companies will be free to return and host DFS contests for Delaware residents.
While the passing of this legislation is an exciting development for DFS advocates, its crushing fee and tax structure will be burdensome for operators. The bill imposes the heftiest costs on operators to date—combining a $50,000 registration fee with a 15.5% tax on net in-state revenue. For DFS giants like DraftKings and FanDuel, this is likely considered a bittersweet victory. For smaller operators, the fees could pose an insurmountable obstacle to entering the Delaware market. Other than these unexpectedly high costs, the bill contains standard regulations and consumer protection provisions.
Delaware residents should be able to return to DFS just in time for football season this fall. Governor Carney celebrated the victory on behalf of his state, reporting, “It’s not often I get to sign fun bills, and I suspect this is a fun bill to sign.”
Kevin would like to thank his law clerk, Kristin Miller, for her help with this write-up.