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Is Ohio gunning for fantasy sports leagues?

According to Sen. Bill Coley, some fantasy leagues and pools on DraftKings and FanDuel violate Ohio law. Coley's Senate Bill 356 would put an end to it.

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Apparently, Ohio lawmaker Sen. Bill Coley is concerned about protecting people from financial ruin in fantasy leagues. With S.B. 356, Coley wants to give the Casino Control Commission authority to regulate not just traditional casinos, as it does now, but the new "gambling" of our time - online fantasy football leagues on DraftKings and FanDuel.

It's no secret that government has had trouble with regulation as the Internet has grown and evolved over the years, in everything from taxes on goods shipped by Amazon to online games of chance. But the majority of fantasy league players, in all likelihood, probably would not think of what they do as gambling in the traditional sense.

For-profit vs. non-profit

The problem, according to Coley, is when leagues and pools operate for profit by taking a cut off the top out of the entry fees. Thus, Coley characterizes his legislation as one that provides for consumer protection.

The Toledo Blade quotes Coley: "If you are currently operating pools that pay off less than 100 percent of the entry fees as prizes to pool participants, then you need to change your business models. [...] Whether you're operating a Queen of Hearts game, fantasy sports, e-sports, or any other pool in the state of Ohio, we're going to see to it that you have clear rules to safely operate the pool not for profit."

In other words, you had better not be making money running any kind of game that could be characterized as a gambling operation.

S.B. 356 comes out of the long-held notion that gambling, unless regulated by the state, is a criminal activity. In Ohio, for-profit gambling is not legal unless it takes place in a casino or at the horse track. When the organizers of a league, pools, or any game of chance in Ohio that isn't explicitly regulated take a cut of the entry fees, it counts as an illegal for-profit activity. Coley's bill essentially takes the position that that's exactly what fantasy leagues are.

The players might beg to differ.

Sources:

http://www.toledoblade.com/State/2016/09/27/Bill-calls-for-Ohio-casino-regulators-to-oversee-fantasy-leagues-pools.html

http://www.cincinnati.com/story/money/2016/09/26/coley-some-daily-fantasy-sports-games-break-ohio-law/91118770/

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