Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: January 16, 2020
The Firm
201-896-4100 info@sh-law.comThe State of New Jersey recently adopted regulations governing fantasy sports operations. The regulations implement the New Jersey Fantasy Sports Act (FSA), which was enacted in 2017. The FSA legalized internet fantasy gaming activities in New Jersey. It also established a regulatory scheme for businesses conducting such activities, specifically requiring fantasy sports operators seeking to conduct fantasy sports activities in the state to obtain a permit.
The FSA tasked the Division of Consumer Affairs (Division) with oversight over the New Jersey fantasy sports industry. The Division first proposed its rules to regulate fantasy sports operators on November 18, 2018. Following a public comment period, the final rules took effect on December 2, 2019. Below are several key provisions:
In August, New Jersey regulators brought their first enforcement action under the FSA. SportsHub, which operates “Fanball,” “CDM Sports,” “National Fantasy Football Championships,” “Whatif Sports,” “Leaguesafe,” and other fantasy sports games, agreed to pay a $30,000 civil penalty for unlawfully operating an online fantasy sports site in New Jersey without a permit. According to the Office of Attorney General Gurbir S. Grewal, an investigation by the Division found that despite SportsHub’s failure to file a permit application by the deadline, the company continued to conduct business in New Jersey, in violation of the FSA.
The Division also alleged that SportsHub violated the Consumer Fraud Act by failing to clearly and conspicuously disclose to consumers in its Privacy Policy and/or Terms and Conditions that it collects personal information from consumers’ social networking accounts and shares it with third parties. According to the Division, SportsHub also failed to disclose that it requires consumers to bring any claim or cause of action against the operator through binding arbitration and to waive class action rights.
The fantasy sports industry provides a wealth of opportunities. However, as the industry grows, it will likely attract increased attention from regulators. For assistance navigating the evolving legal landscape, we encourage fantasy sports operations to work with a knowledgeable attorney.
If you have any questions or if you would like to discuss the matter further, please contact me, Ashley Brinn, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
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