California closes in on fantasy sports as committee approves bill

California has moved a step closer to legalising daily fantasy sports (DFS) after a state Assembly committee approved a bill that would allow such operators to run websites in the US state under a licence.

AB 1437 would require operators to acquire the relevant licence in order to offer such games in the state, while such companies would also need to pay an annual regulatory fee.

DFS operators would also need to undergo a background check, in addition to paying taxes on profit and reporting player winnings, which would also be taxed.

Companies that successfully obtain a licence would also be made responsible for determining if players are eligible adults and that there is no fraud in the games.

During a hearing this week, Governmental Organisation Committee chairman, Adam Grey, said the bill offers California an opportunity to “lead the way” in DFS, after the industry suffered a number of setbacks in recent months.

Nevada recently ruled that DFS operators cannot offer such services in the state without the correct licence, while New York is also attempting to ban the sector.

“In California, we have an opportunity to lead the way…to balance consumer protections with consumer demand for daily fantasy sports,” Gray said.

“AB 1437 will put in place safeguards to ensure games are fair, prohibit underage usage, guard against identity theft and ensure that consumers are competing on a level playing field.”

Industry consulting firm Eilers Research has estimated that daily fantasy games could generate up to $3.7 billion ($3.4 billion) in entry fees, in addition to $370 million in revenue this year, with California responsible for 15% of these totals.

The move will come as a boost to California’s gambling market, which was this week dealt a blow after a bill that could potentially lead to the legalisation of online poker in the state was pulled from the same hearing where the DFS bill was approved.

Related article: California poker bill withdrawn from latest hearing