ALBANY – When the Legislature OK’d a bill legalizing daily fantasy sports contests in New York in June, Michael Leone came home.
Leone is a semi-professional player of daily fantasy sports, aka DFS, and he had moved to North Carolina in March so he could keep playing the online contests that the attorney general had shut down in New York State. He returned in late June to Tonawanda after New York legislators voted to make the games legal.
But Gov. Andrew M. Cuomo has not acted on the bill or signaled whether he will sign or veto it. That leaves hundreds of thousands of DFS players like Leone feeling anxious. They see the contests as a mix of business and hobby.
Watching just as closely are industry giants DraftKings and FanDuel, two companies that run the games online. They have lost undisclosed millions of dollars since March, when Attorney General Eric T. Schneiderman declared daily fantasy sports an illegal form of gambling and the two companies shut down their operations.
“We’re still cautiously optimistic that it will get signed, but there’s this anxiety creeping in like, why hasn’t it been signed yet?” said Leone, 29, who is also a partner with several others in a website that provides players with free and paid advice, suggested player picks, strategies and forums. The forum allows players to act as general manager of a sports team while plunking down money on the performance of their players.
The future of the nation’s daily DFS industry, which has seen rapid growth until coming under growing government scrutiny in the past year, could well be shaped by Cuomo’s decision to join lawmakers in legalizing the contests in New York.
But Cuomo has not yet revealed his stance on the fantasy contests. That was the case again late last week, when the governor’s office would not reveal his position or say when he will ask the Assembly to send the legislation to him to sign or veto. A spokesman would only say the bill is still under review.
The inside word in June was that Cuomo did not want the Legislature to OK the bill, but that he would sign it if both the Senate and Assembly passed it.
For DFS tea-leaf readers, there was this: Cuomo’s office made some last-minute technical wording suggestions to the bill’s sponsors. Backers took that as a sign of Cuomo’s support, which is always a risky venture when it comes to predicting the ways of Albany.
The Legislature acts
In the final hours of the Legislature’s session in June, the clash at the Capitol over legalizing the contests was intense, bitter and even loud during some moments.
Lobbyists squared off against each other in the hallways. ESPN and Yahoo joined DraftKings and FanDuel as they went up against casinos and some racetracks concerned about the growing online competition for a piece of the gambling dollars placed by New York’s bettors.
The measure attracted a who’s who of corporations, both for and against the bill: Walt Disney Co., the owner of ESPN and ABC; Delaware North; DraftKings and FanDuel; a coalition of track-based casinos in New York, as well as Caesars Entertainment in Las Vegas and the Borgata Hotel Casino in Atlantic City; OTBs in Western New York and Nassau County; 21st Century Fox; NBC Universal; Verizon; Yonkers Raceway; Yahoo; a Nevada slot machine maker; MSG Sports; and a conservative religious group called New Yorkers for Constitutional Freedoms.
After passage by the Assembly, the Senate approved the measure in the early morning of June 18. At 2:10 that morning, the Senate’s web stream of its session had 630 viewers, which was two to three times the number of viewers from earlier in the day’s session.
Since then, the bill’s opponents have largely walked away from the matter, seemingly resigned that Cuomo will sign it.
“Our position was we shouldn’t do it. We expressed our point of view. The majority of the Legislature disagreed with it. We’ve moved on … It’s not worth burning bridges over,’’ said James Featherstonhaugh, president of the New York Gaming Association, which represents casino operators in New York, such as Buffalo’s Delaware North Cos.
Boston-based DraftKings and New York-based FanDuel, which spend millions on marketing and has equity deals with the NBA, NHL and MLB, as well as sponsorship deals with teams like the Buffalo Bills, declined comment for this story. The two companies control an estimated 95 percent of the market.
Some of possibilities why Cuomo has not yet acted: the governor wants more time to examine the legislation, he opposes it and wants to time his veto in some way, or he supports it and wants to time his approval in some way, such as the start of the NFL season, which attracts the most DFS players of the various sports offered for the daily and weekly contests.
A waiting game
The DFS bill is being closely watched nationwide, not just because of the sheer number of New York players, or number of pro sports teams or pro leagues based in New York.
“Every company is looking to see what’s going to happen in New York,’’ said Peter Schoenke, chairman of the Fantasy Sports Trade Association and owner of RotoWire.com, a sports information site.
“The New York bill will show all the other states that, ‘Wow, here’s the state that had the attorney general with the most aggressive action against the industry and even they were able to come together with a bill to satisfy everyone,’ ” he said.
Attorney General Schneiderman has said he will enforce the law if Cuomo signs it.
“I’m just waiting also,” said Assemblyman Gary Pretlow, a Westchester County Democrat and DFS bill sponsor.
Per a longstanding Albany understanding, governors request when specific bills are sent for signing or vetoing as a way to control the hundreds of bills that pass at session’s end.
Governors often spread out the signings over many months for legislation with good publicity potential. As of Friday, 381 bills that passed this year still haven’t been sent to Cuomo.
“I have every indication he’s going to sign it, but I don’t know when,” Pretlow said.
Why does he think that?
“He made some suggestions to the bill before it was finally passed and he did mention to someone he wanted to do a public bill signing, but he’s not spoken to me,” he said.
Football season nears
DFS companies are getting anxious as they face their busiest schedule with the NFL season and are restricted in their ability to market without knowing if one of their biggest states will permit DFS contests this fall, said Daniel Back, a DFS expert, player and executive with Tennessee-based RotoGrinders.com.
“We saw the impact New York had in terms of keeping daily fantasy sports out of other states, or their attorney generals following in the footstep of Eric Schneiderman. The industry hopes if New York can fully legalize it and give clarity to DFS, then maybe others will follow,” Back said.
Leone, the Tonawanda resident, moved to North Carolina in March to continue playing DFS, in part he said, because he didn’t feel it was right for him to offer contest advice to followers of his site if he, too, wasn’t playing the games. He lived temporarily with his sister in Charlotte, while his wife remained in New York. He returned soon after the bill passed. But, like other DFS players unaccustomed to governing in New York, Leone said: “I didn’t anticipate the governor taking this long to sign off on it.”
Leone, who uses his Canisius College mathematics degree in his full-time DFS trade, says his business has been affected by the shutdown and loss of what he says is about 15 percent of the DFS market that comes from New York State.
“I just want to be able to play,” Leone said.