Alabama Governor Kay Ivey Quietly Legalizes Daily Fantasy Sports

Posted on: June 5, 2019, 11:18h. 

Last updated on: June 5, 2019, 11:18h.

Alabama DFS fans could soon be logged back onto DraftKings and FanDuel, three years after the operators were warned off by then-state attorney general Luther Strange for offering “illegal gambling.”

Alabama DFS
Gov. Kay Ivey’s signing of the Alabama DFS bill on Friday, two days after it had been passed by the legislature, was not picked up by media until this week. FanDuel said it was “working hard” to reenter the market. (Image: Toronto Star)

Republican governor Kay Ivey signed the Alabama DFS bill on Friday, two days after it had been emphatically approved by the Senate — a fact that flew completely under the radar until it was spotted by Bloomberg Tax this week.

Under Alabama’s new law, the contests will be overseen by the attorney general’s office. The biggest operators, with more than $10 million in revenues, will pay an annual registration fee of $85,000, while small operators will pay just $1,000 a year.

Operators will be taxed at 10.5 percent on gross revenues, due to an amendment added last week by the Senate. Main sponsor Rep. Kyle South (R-Fayette) had originally proposed an 8.2 percent tax.

No Timeline for FanDuel

South’s bill sought to have DFS declared a game of skill and therefore exempt from the gambling laws Strange said it violated in 2016.

No offense to my mom, but if we play ten times, I’m going to beat her all ten times,” he told Yellowhammer last month.

It was a simple but compelling argument and one enthusiastically swallowed by Senators last week by a margin of 22-8, despite the Senate having become the graveyard of previous Alabama DFS bills over the past few years. The bill had previously been passed by the House by 74-22.

“One thing you can point to are all these major league baseball teams, these professional sports teams are going to an analytics-based system for choosing their players, and that’s all we’re doing here,” South explained.

No word yet on a timeline for DraftKings and FanDuel to return to Alabama, although a FanDuel spokesman told LegalSportsReport that the company was “working hard to bring our fantasy sports products to Alabama residents.” The spokesman thanked South for his hard work and promised to provide more details soon.

Legislative Lottery

Meanwhile, some state residents are scratching their heads and wondering why the legislature can so enthusiastically pass a bill legalizing daily fantasy sports but cannot get their heads around authorizing a lottery.

Revenues states generate from DFS are modest — Alabama expects to bring in around $4 million in annual revenue – while it’s estimated a lottery would produce revenues of $167 million a year for Alabama, one of the poorest states in the nation.

The state is one of only six -– along with Alaska, Hawaii, Mississippi, Nevada and Utah — that does not have a lottery, and the legislative push to introduce one fails year after year.