Missouri lawmakers recently passed a measure that both legalizes and regulates daily fantasy sports sites in the Midwest state, but not everyone is happy about the new law.

A group of smaller daily fantasy sports operators are saying that H1941 is tailor made for DraftKings and FanDuel and will drive their competitors out of business. A group of those competitors have even gone so far as to say that H1941 will create a DFS duopoly in the state.

On its face, the bill seems pretty innocuous, but the devil is in the details. In this case, those details stipulate that Missouri-facing DFS sites must:

  • Pay an annual licensing fee of $10,000 or 10% of net revenue (whichever is smaller).
  • Submit to a background check – a background check that comes with a $50,000 fee.
  • Pay an 11.5% tax on net revenue.
  • Submit to an an annual third-part audit.

These requirements won’t be much of a bother for the industry’s two heavy hitters, DraftKings and FanDuel, but they’re a major burden for smaller operators.

Even worse, these smaller operators say that their interests are not being represented by the FSTA (Fantasy Sports Trade Association), a daily fantasy sports industry trade group. To counteract that dynamic the smaller operators have formed their own group, the Small Businesses of Fantasy Sports Trade Association (SBFSTA).

In a recent press release, SBFSTA co-founder Alex Kaganovsky spoke about how recent legislative efforts to regulate DFS have been controlled by the FSTA saying:

We appreciate that the legislature wants to address this issue but this bill will kill us…the FSTA (Fantasy Sports Trade Association) tells legislators that they are representing small businesses but in reality they are representing the interests of the two Goliaths in the industry, FanDuel and DraftKings.

Kaganovosky went on to say that the SBFSTA is actually in favor a regulated daily fantasy sports industry, they just want to make certain that the interests of smaller operators are represented in those regulations.


Tags: ,

Related posts: