Without fanfare, Gov. Bill Haslam signed a bill pushed by online giants DraftKings and FanDuel allowing the companies and approximately 1 million Tennessee players who are already participating to do so legally, reports the Times-Free Press. The legislation will create an exemption from state anti-gambling provisions.
Sponsored by Sen. Jack Johnson, R-Franklin, and Rep. Pat Marsh, R-Shelbyville, the legislation was pushed by the companies here in anticipation of legal trouble after attorneys general in a number of states, including New York, Texas and Nevada, ruled fantasy sports violated their laws.
…Not long after the bill initially passed the Tennessee Senate, state Attorney General Herbert Slatery issued an opinion declaring that fantasy sports are indeed gambling — and illegal under Tennessee law.
While proponents said the online games are based on players’ skill in picking their teams, Slatery said there’s an element of chance and participants stand to gain financially. He said that’s gambling in Tennessee, and it’s illegal. The legal opinion was requested by House Minority Leader Craig Fitzhugh, D-Ripley.
Early on, DraftKings and FanDuel were taking no chances.
According to filings with the Tennessee Ethics Commission, they hired McMahan Winstead, a Nashville lobbying firm whose clients have included tobacco companies, liquor stores and payday lenders. The companies also enlisted Washington, D.C., lobbyist Scott Ward, who serves as government affairs counsel for the law firm Orrick. And DraftKings hired former House Democratic Caucus Chairman Mike Turner.
At least eight lobbyists were registered to speak on the bill.
Steve Brumfield, a Nashville-based public relations specialist hired by the companies, claimed the bill had nothing to do with fixing the state’s illegal gambling problem in Tennessee law. He said the issue was being misrepresented even after Slatery’s legal opinion was issued.
“The point is, after the bill is passed, it won’t be gambling,” Brumfield said in an April 6 email when asked about Slatery’s opinion. Brumfield likened it to the state lottery, which, after more than a decade, was finally sent to state voters, who snapped it up in 2002, making it legal through an amendment to the Tennessee Constitution.
“The lottery is ‘legalized gambling,'” Brumfield said. “If the bill passes, it will exempt fantasy sports from the definition of gambling. So a statement that after the bill passes, Tennesseans can now legally bet on fantasy sports or that ‘fantasy sports gambling’ is legal is factually incorrect.”
Rather, Brumfield said, “it would be correct to say that an activity that has existed in TN for 30 years without issue has now been determined to be gambling by the AG, and the bill will make clear that skill-based fantasy sports are not gambling in the state of Tennessee.”
Not everyone was buying that.
During a sometimes heated mid-April debate in the House Finance Subcommittee, bill opponent Rep. David Alexander, R-Winchester, suggested the chairman of the panel get a law enforcement official to arrest “various people for breaking law and promoting gambling,” according to an account in The Tennessean.
Moreover, Alexander said, bill supporters and the squad of lobbyists pressing the legislation might even be subject to arrest.
Rep. Curry Todd, R-Collierville, charged that Alexander’s assertion was “asinine.”