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Alabama Legalizes Daily Fantasy Sports

As one of the most conservative states in the US, it is surprising to see that Alabama lawmakers have approved daily fantasy sports betting. The state is one of a select few that does not have a lottery or commercial casino gaming. It has been over three years since the attorney general of the state decided to declare that daily fantasy sports was illegal and now the governor has signed legislation into law allowing the activity.

DFS Approved

Now that DFS is back in action in the state, companies such as FanDuel and DraftKings will be able to offer services. The bill involving the activity was signed by Governor Kay Ivey with the signature coming just a few days after the bill was passed in May.

The daily fantasy sports operators are ready to be back in action in Alabama. FanDuel commented on the legislation’s passage by stating the company is excited to be bringing back FanDuel Daily Fantasy Sports to the people of Alabama. The company thanked Representative Kyle South, an individual who fought hard to see the activity back in action in the state.

FanDuel also announced that they plan on having more details in the near future as to their relaunch in the state.

Details of Alabama DFS

With the new law, the contests involving daily fantasy sports will be overseen within the office of the attorney general. Larger operators like FanDuel and DraftKings, who make over $10 million in revenues, will have to pay a fee for yearly registration of $85,000. Smaller operators will only have to pay a fee of $1,000.

Gross revenues of the industry will be taxed at 10.5%. This amount is slightly higher than the original 8.2% that was proposed. Rep. Kyle South added an amendment just a few days ago that pushed the tax rate up just a bit.

The bill sought to see the activity of daily fantasy sports declared a game of skill. This definition would make the activity exempt from gambling laws of the state that then AG Luther Strange said the activity was in violation of.

Additional Gambling

For residents of Alabama, the legalization of daily fantasy sports has many questioning lawmakers. Why were they so willing to pass DFS but cannot seem to get started with lottery gaming? Revenues from DFS have been estimated at around $4 million annually. However, a lottery would bring in much more money. It has ben estimated that a lottery would created over $160 million in one year.

The money could be used in a variety of ways. In the US, the state is one of the poorest. Education, health care and senior programs would be just the beginning of what could benefit from the lottery revenues. The lawmakers tend to be more conservative and vote based on religious beliefs, but daily fantasy sports is essentially a form of gambling.

So, why are lawmakers so gung-ho for it but not other forms like the lottery? It will be interesting to see if the success of DFS in the state helps to push even more gambling options for Alabama.