Georgia could take closer look at fantasy sports websites

ATLANTA -- On the last Friday in February, the Georgia Lottery Corp. received a letter it had requested from the office of Georgia's top state attorney. The state's gambling overseers wanted to know if daily fantasy sports games are legal in the state.

Nevermind that Georgians already pony up lots of money on fantasy sports websites such as DraftKings and FanDuel. They bet on dream teams of real players and get paid -- or not -- based on how those athletes perform in real games.

Online daily fantasy sports sites are among several tech-conjured industries that the state has considered trying to tame. Lawmakers have thought about regulations on apps to hail car rides, such as Uber, and websites that match amateur innkeepers with travelers seeking rooms, such as Airbnb.

So far, though, Georgia and its cities and counties have written few regulations on those industries.

As for daily fantasy sports sites, Georgia is searching through its playbook.

"Given that a number of other states had determined that fantasy sports were illegal gambling, we were looking for clarification to see if the same were true in Georgia," Georgia Lottery Corp. spokeswoman Kimberly Starks said in a written statement.

It's a question they have been looking into for months.

DraftKings and FanDuel make up about 90 percent of the market, according to a New York Times and "Frontline" investigative series. They serve millions of customers and offer million-dollar prizes. The companies spent a quarter of a billion dollars last year in advertising blitzes.

In time, daily fantasy sites began attracting legal scrutiny. Several states have declared daily fantasy sites illegal, saying that they're gambling. The daily fantasy industry is contesting those rulings.

The letter that Georgia lottery officials received from lawyers in Attorney General Sam Olens' office suggests that Georgia might follow suit with other states.

The "informal advice" in the letter is "that daily fantasy sports games are not authorized under Georgia law."

Asked for the lottery's reaction to the letter and what its board might do, Starks referred questions to Olens. Asked if the letter meant that even using such websites is breaking the law in Georgia, a spokesman for the Attorney General's Office said they had no comment either.

A FanDuel spokeswoman said her company had no comment on the letter. DraftKings did not respond to a request for comment.

But the debate is not new to any of the roughly 300 companies that are part of the Fantasy Sports Trade Association, an industry group that says some 57 million people across the U.S. and Canada played fantasy sports last year.

DraftKings and FanDuel are simply high-profile operators. When it comes to talk of state regulation, those companies and their industry group argue that their contests are games of skill that are permissible under federal online gambling laws.

'BET MORE THAN THEY HAVE'

Georgia is just one of several states to do a double take at daily fantasy sports lately. Some states are pretty sure what they see is unauthorized within their borders.

New York's Democratic attorney general has sued DraftKings and FanDuel, accusing them of violating state gambling laws and of deceptive advertising. Both companies are fighting the complaints.

Last year in Nevada, a Republican-led state familiar with gambling, gaming regulators ruled that daily fantasy sports websites needed to get state gambling licenses to operate.

In Virginia, a state that doesn't even have a casino, Republican-led legislators passed a bill this year to set rules on daily fantasy sports sites, such as limiting them to players ages 18 and older.

But it may be too early to suggest why the politicians who set the rules act as they do -- if their decisions have to do with existing gaming, the party in charge or anything else.

"To our understanding, there is no obvious trend or correlation between the states as to why each of them acts one way or another," said Jake Lestock, a policy associate with the nonpartisan National Council of State Legislatures, which tracks policies across states.

Daily fantasy sports, state attorneys general and state lawmakers have given them a lot to watch.

"After the legislative sessions conclude in mid-summer, we might then be able to determine if any trends actually exist," Lestock said.

Daily fantasy sports are also on the radar of the Georgia Council on Problem Gambling, said its president, Eric Groh.

"For us, it's the addictiveness of it and the proliferation of it and the ... difficulty of putting any consumer protection in place," he said.

Groh said a lot of people don't connect the idea of gambling to an activity they may know only via seasonlong office pools.

But it can be a problem, he said.

"People bet more money than they have, and it virtually all of the time results in net loss," Groh said.

To contact writer Maggie Lee, e-mail mlee@macon.com.

This story was originally published March 8, 2016 at 5:49 PM with the headline "Georgia could take closer look at fantasy sports websites ."