A Republican lawmaker is drafting a bill that would protect online fantasy sports in Wisconsin, a matter already drawing scrutiny from opponents of legalized gambling.
The move comes as the fantasy sports industry is promoting legislation in other states to protect the growing online business from being banned. Some state legislatures, as well as recent attorney general decisions in Illinois and New York, have banned fantasy sports as illegal gambling because they involve an element of chance. The bills classify fantasy sports as a game of skill, not subject to gambling restrictions.
The issue is particularly thorny in Wisconsin, where the state constitution bans most forms of gambling. There are exceptions for raffles, bingo halls, the state lottery and tribal casinos. Wisconsin’s native tribes have compacts with the state that regulate the expansion of gambling and yield $50 million a year in state revenue.
Online fantasy sports web sites such as Draft Kings and FanDuel allow participants to pay to join a league where they assemble an imaginary team of real professional athletes and win money based on the athletes’ statistical performances during a season.
Such fantasy sports leagues, also known as rotisserie leagues, have been around for decades, even before computers and the Internet allowed companies to make it easier for players to track statistics. In recent decades fantasy sports have grown from a hobby among friends and coworkers to a multibillion-dollar industry.
Wisconsin law doesn’t address the legality of fantasy sports leagues or web sites. Anne Schwartz, a spokeswoman for Attorney General Brad Schimel, said Schimel hasn’t received any complaints about sites such as Draft Kings and FanDuel and doesn’t have an opinion as to whether they are a game of skill or chance.
Rep. Tyler Vorpagel, R-Plymouth, is drafting an Assembly bill that would spell out that fantasy sports are legal in Wisconsin, similar to bills in other states, his legislative aide Ariana Ringelstetter said Wednesday. But she said Vorpagel won’t comment on details before a draft is finalized.
Senate Majority Leader Scott Fitzgerald, R-Juneau, has not been approached by any senators who intend to author a Senate companion bill at this time, spokeswoman Myranda Tanck said Wednesday.
On Dec. 22, two lobbyists were authorized to represent the Fantasy Sports Trade Association in Wisconsin, including Ryan Murray, a former aide to Gov. Scott Walker. The other is Buddy Julius, president of The Firm Consulting and a former lobbyist for AT&T.
On Monday the Forest County Potawatomi notified the Government Accountability Board of its interest in the subject of online fantasy sports. A spokesman for the tribe declined to comment on the issue before seeing a bill.
Many technology companies that are part of the fantasy sports industry, such as Madison-based Rotowire.com, are located in Wisconsin, according to Peter Schoenke, Rotowire.com president and chairman of the Fantasy Sports Trade Association. The first fantasy sports magazine, started in 1989, was founded in Iola.
In 2006, Congress banned financial institutions from authorizing transactions for online gambling websites, but it carved out an exemption for fantasy sports. However, that exemption doesn’t supersede state law, Schoenke said.
He said what distinguishes fantasy sports from illegal gambling is “it takes a lot of knowledge to play.”
“It’s not like traditional gambling where there’s the spin of the dice and the turn of the card,” Schoenke said. “It comes down to how well you know the players, how well you can figure out the game,” he said.
Julaine Appling, president of Wisconsin Family Action, which opposes gambling expansion in the state, said fantasy sports become a form of gambling once the websites charge and pay out money.
“They want to call this some other name so it’s not gambling, but it is,” Appling said. “It’s going to have the same kinds of addiction problems with other online gambling,” she said.