The Legislature is expected to take up the growing conundrum surrounding daily fantasy sports (DFS) when Minnesota lawmakers convene for the year March 8.
But other state officials have neither the plans nor the jurisdiction to make splashier moves banning daily fantasy sports, as three high-profile states have done in recent months.
On Tuesday, Texas became the third heavily populated state to constitute DFS as illegal gambling when state attorney general Ken Paxton wrote that websites DraftKings and FanDuel, two major players in the billion-dollar daily fantasy industry, were taking illegal bets under state law.
New York and Illinois recently took the same stance, prompting the two largest daily fantasy sports companies to file lawsuits against both states' attorney generals. FanDuel and Draft-Kings stand to lose 25 percent of their business without Texas, New York and Illinois, according to Eilers & Krejcik Gaming, a research firm dealing with the gaming industry contacted by the New York Times.
Daily fantasy sports sites offer participants who pay entry fees the chance to win big cash payouts for successfully picking the most productive players in weekly or daily sports lineups.
Minnesota has no laws prohibiting fantasy sports, and state Attorney General Lori Swanson has no jurisdiction over this growing conflict. The Minnesota Department of Public Safety (DPS) handles such concerns.
"Each state is different in terms of their regulation on this," said Ben Wogsland, spokesman from the attorney general's office. "The legislation has delegated the Department of Public Safety with the authority to investigate any violations of gambling law. In some states — for instance, New York — that authority is vested with the attorney general's office."
Despite the recent steps taken by Texas and other states, a spokesman for the Minnesota Department of Public Safety said Wednesday that they have no reason to investigate fantasy sports betting websites.
"Minnesota currently follows federal law, which permits fantasy sports," said Bruce Gordon, director of communications for the DPS. "Currently, there is no prohibition in Minnesota in regards to fantasy sports. We enforce the laws that are on the books in the state. So if there was to be a law change, that would have to happen at the Legislature."
With the Legislature next convening in regular session in less than two months, the booming sports fantasy business and how it affects state taxes has some lawmakers looking to make changes to how the industry operates in Minnesota.
Rep. Greg Davids, chairman of the House Taxes Committee, told Bloomberg BNA in December that he expects the issue of fantasy sports websites would be the subject of legislation in March. Davids added that while any Minnesotan claiming winnings from the websites would be required to pay income tax on them, legislators would like clarification on the revenue generated and whether these games constitute an expansion of gambling.
State Rep. Joe Atkins, DFL-Inver Grove Heights, will propose a bill that makes the betting legal, but regulates and taxes the billion-dollar industry.