New York Legislature Looking to Tax Daily Fantasy Sports

With four days left in the legislative session, a full field of players and their lobbyists are upping the ante on bets that their gambling-related measures will become law.

The final week of any session brings out a full coterie of interest groups pushing to be seen and heard by lawmakers.

But the numbers — and potential economic impact — of gambling-related measures are bringing them to the fore.

Both the Republican-led and Democratic-dominated Assembly have bills that would allow legal online betting by fantasy sports companies including the industry leaders, FanDuel and DraftKings.

Lawmakers early on agreed that such activities should be taxed at 15 percent of their gross betting revenue.

But details remain to be worked out, such as whether Yahoo should have to pay for its free platform which lets groups of players set up their own competitions.

In addition to Fantasy Sports, promoters of online poker, which is backed by companies like MGM and an interest group known as the Poker Players Alliance, is also pushing for legalization.

Supporters cite the $50 million in taxes that New Jersey realized after legalizing online poker, contending that New York could easily surpass that.

A bill sponsored by Senate Gaming Commission Chairman John Bonacic and Assembly Chairman Gary Pretlow would allow up to 10 poker operations in the state.

But unlike the $500,000 license fee for Fantasy Sports, this measure calls for a $10 million, 10-year licensing fee, as well as 15 percent of their annual gross, which is what Fantasy Sports operators would pay.

These proposals have opponents, including operators of “racinos” or video lottery machine parlors that fear Internet gaming will detract from their business. They are facing new threats in the next year with the opening of three new casinos in upstate New York, including one in Schenectady. Anti-gambling activists dislike the online gaming option as well.