A proposal to regulate the increasingly popular fantasy sports leagues for the first time in North Carolina was defeated in a House committee on Wednesday.
Opponents in the House Regulatory Reform Committee said House Bill 279 would legalize gambling, while supporters argued the virtual leagues were legal games of skill not chance. The bill was defeated by a vote of 4-7.
Fantasy sports entail online games between players who create lineups comprised of real-life athletes and compete based on the athletes’ real-life statistical performance during a specific time frame. Players accumulate points and can win cash prizes. They also pay entry fees to operators.
HB 279 would have required the operators to register with the Secretary of State, pay registration fees and give that department and the state Alcohol Law Enforcement the authority to enforce the law. The legislation would have also included protections, including prohibiting those younger than 18 from playing, prohibiting league operators or their families and employees from participating and ensuring operators maintain enough money to pay out prizes.
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Bill sponsor Rep. Jason Saine, a Republican from Lincolnton, said there are 1.6 million fantasy sports league players in North Carolina, and that the bill was an attempt to make sure a growing industry is regulated. He added that the bill would eliminate confusion by clarifying that virtual sports competition is not gambling.
“We’re trying to get out in front of it before potential bad actors come in,” Saine said in the committee meeting.
But Rep. Michael Speciale, a Republican from New Bern, said it still sounded like gambling.
John Rustin, president and executive director of the N.C. Family Policy Council, told the committee that the games constitute gambling because chance outweighs skill.
“It would represent a massive expansion of legalized gambling in North Carolina,” Rustin said.
Steve Krombolz of FantasyDraft, a fantasy league operator based in Cornelius, spoke in support of the bill.
Several years ago the video sweepstakes industry unsuccessfully lobbied for regulation and taxing, seeing that as a better option than being outlawed as gambling.
Wednesdays’s vote damaged the bill’s chances of approval this year, although it could be included in other legislation. There is also an identical bill in the Senate that hasn’t been considered in a committee yet. Both bills included bipartisan sponsors.