DFS advances in some markets, retreats in others; Caesars rubs your nose in it

Daily fantasy sports, the loud frat brother of sports betting, is close to a signal victory in Virginia. Both houses of the Virginia Assembly have passed DFS legalization with veto-McAuliffeproof majorities and sent the legislation to Gov. Terry McAuliffe (D). The requirements on DFS sites aren’t particularly burdensome, mainly a $50,000 annual fee to the state and a ban on play by individuals under the age of 18. It’s even tax-free. Oversight will be handled by the Department of Agriculture & Consumer Services. On another battlefront, Indiana, DFS is advancing in the Lege, even though the yearly fee was upped from $5,000 to $75,000 for Year One (and 20 grand a year after that). DFS providers will have to act as agents of the state, withholding winnings from delinquent parents, a requirement the state should hardly be imposing on the private sector.

Whether it’s because there is so much legal uncertainty surrounding DFS or because DraftKings and FanDuel have sucked all the air out of the room, smaller sites continue to shutter. FantasyHub closed, leaving players holding the bag, as did FantasyUp, although a third-party company made players whole in the latter instance.

And FanDuel and DraftKings continue to fight a holding action in New York, where they Schneidermanseek to delay a March 9 trial on the legality of the operations until an appeal of Attorney General Eric Schneiderman‘s cease-and-desist order has fully worked its way through the court system. “Not only do DraftKings and FanDuel overlook the ravages of gambling on New York communities highlighted by the court in its decision, they ignore the basic precept that justice delayed exacts its own price,” stated Schneiderman’s office. But DraftKings attorney Joshua Schiller told the Boston Globe that the injunction could have a “domino effect” on the DFS company’s business relationships. “It would have a catastrophic effect. It could be enough to put us out of business,” he added.

At worst, DraftKings and FanDuel are marketing their product to responsible adults. What’s truly odious in the NFL‘s attempt to hook little kids on fantasy sports with NFL Rush Fantasy, which promotes DFS under the guise of teaching math and language skills. While the league says it has cut out the prize-winning aspect of NFL Rush Fantasy, we have to agree with gambling opponents that this ‘get ’em while they’re young’ effort is far out of bounds.

* In case you’re wondering how Caesars Entertainment CEO Mark Frissora is increasing revenue at the company’s Strip properties, there’s a nasty, two-word explanation: resort fees. Today, the Los Angeles Times announced a new round of resort-fee boosts at The Cromwell, Paris-Las Vegas, Planet Hollywood, Nobu Hotel and of course at Caesars Palace. The fees will increase (before taxes are applied) $3, to $32. The move effectively segments Caesars’ Las Vegas properties into two tiers, with Bally’s, Flamingo Las Vegas, Linq, The Rio and Harrah’s Las Vegas positioned as “bargain” alternatives, although a three-dollar discrepancy doesn’t make much of a difference in the grand scheme of things. In any event, shame on Caesars for this petty, money-grubbing move.

* Although Kansas‘ four casino licenses are all maxed out, a change in state law is being pushed which would allow a racino at Phil Ruffin‘s defunct The Woodlands track. The ruffinoval is Ruffin’s third track in Kansas and his most recent purchase. An opposition group, Protect the Partnership, which appears to be a stalking horse for Hollywood Casino at Kansas Speedway, is attacking the Ruffin proposal because it would benefit from a bill that passed the state Senate, lowering the tax rate on a Woodlands racino. “I think it’s going to help [Penn National Gaming]. I think it will draw more people to the area,” said bill sponsor state Sen. Steve Fitzgerald (R). (Ruffin’s purchase of The Woodlands followed the passage of the bill, which still awaits action in the House.) “So far they haven’t made a lot of commitments,” said Unified Government of Wyandotte County & Kansas City spokesman Mike Taylor. “What we don’t want is for them to open a track for 60 days and then to have a giant slot parlor open for 365 days a year that steals revenue from Hollywood Casino.” Ruffin, at present, is keeping his plans close to the vest.

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