Politics & Government

Fantasy sports companies want North Carolina to regulate them. Why legislators didn't do it.

A bill to regulate the fantasy sports industry failed -- again -- to move forward in the North Carolina legislature, despite backing from the industry itself as well as a bipartisan group of lawmakers.

Christian groups opposed the bill, fearing that it would legitimize what they see as gambling. Despite arguments from the industry that winning requires far more skill than luck, some legislators said that it felt too much like gambling. And other lawmakers said they opposed the bill because the state wouldn't have much power to go after bad actors if it passed.

In the end, that all spelled defeat for the bill Wednesday in a committee meeting, where the bill's sponsors pulled it from consideration just before it was about to go up for a vote. That means it lives to fight another day -- but probably not until 2019. The bill also failed to win support last year.

Republic Rep. Jason Saine, the bill's main sponsor, said he worked closely with fantasy sports companies to write the bill, and that he thought it hit a good middle group between regulating the industry while not being overly intrusive.

"It protects consumers and allows for an increasingly popular industry to grow in our state," he said.

An unregulated industry

Saine said that in North Carolina, anyone can play the games, and the companies won't necessarily face penalties if they harm the people playing them. This bill would address both of those issues, he said, by banning anyone under 18 from playing fantasy sports and by creating a system through which the companies have to register with the state and can be fined if they violate various rules and regulations.

Fantasy sports occupy a gray area in state law, where they're legal and unregulated. That's different than sports gambling, which the Supreme Court ruled recently could be legalized state by state. It remains illegal in North Carolina.

Read Next

So for fantasy sports, the bill's failure on Wednesday means that nothing changes in North Carolina. People of any age can keep playing with their friends and co-workers, or against strangers. Some people play just for bragging rights, and others play for money.

Waffle House
A North Carolina man lost his fantasy football league, and had to spend 24 hours at Waffle House as punishment. Screenshot of Justin Poliachik’s Twitter

Major media companies like ESPN and Yahoo!, as well as specialized businesses like DraftKings and FanDuel, run fantasy sports games for the NFL and other sports leagues.

The games let people act like a coach or manager, picking players from any team to create their own custom-tailored teams that then earn points based on how their players do in real life games that week.

Like the 'Wild West'

Christopher Grimm, a lobbyist for DraftKings and FanDuel, said that when they've matched experienced players against a randomly generated lineup, veteran players win 80 percent of the time. That proves , he said, that it takes skill and is not the same as gambling.

But opponents like Rev. Mark Creech, president of the Christian Action League, were not swayed. Creech called fantasy sports a type of gambling and "moral erosion," and urged legislators to vote against the bill.

Even though Creech and his allies ultimately won the debate Wednesday, Saine found some support for the bill across the aisle. Rep. Kelly Alexander, a Charlotte Democrat, said he wanted to regulate the industry because it's better than doing nothing.

"Whether it’s gambling or not gambling, it’s going on," Alexander said. "It’s a reality. At least in my district, I'm told that some 20,000 to 25,000 people are participating in fantasy sports. ... We ought to at least start a regulatory framework, we ought to have some elementary protections to make sure that minors are not involved. So to vote against this measure is to vote in favor of the wild west.”

But Alexander's fellow Charlotte Democrat, Rep. Mary Belk, disagreed. Belk has been open about her own past struggles with alcohol addiction, and said Wednesday she wants the legislature to do more to help people who get addicted to gambling.

She and Rep. Deb Butler, a Wilmington Democrat, both said that if the state does decide to regulate these businesses they should also levy fees on the companies that can then be used to fund programs aimed at fighting gambling addiction.

"There's nothing in here," Belk said. "We’re not asking these people who are benefiting from people playing to make sure people get help."

Doran: 919-836-2858; Twitter: @will_doran