What Could This Fantasy Sports Bill Mean for New Jersey?
The New Jersey Assembly recently passed legislation that would regulate daily fantasy sports games.Analysts project that taxing the growing industry could generate annual revenue of $6.6 million.
The New Jersey fantasy sports bill, Assembly Bill No. 3532, would regulate large-scale fantasy sports operators like DraftKings and FanDuel. It would not apply to leagues between friends and family. Daily fantasy games differ from traditional season-long fantasy sports leagues because the daily fantasy winners are determined on a daily basis based on the statistics generated by sports players during that day’s games. While individual fantasy players typically only bet a few dollars, the sheer number of fantasy players participating on national websites can generate prizes reaching millions of dollars.
Regulatory Scheme Under Assembly Bill No. 3532
Sports betting is generally illegal under federal and state law. However, because fantasy sports are considered a game of skill rather than simply luck, they are not considered gambling.
Assembly Bill No. 3532 would expressly legalize “fantasy sports activity,” which is defined as a “contest with an entry fee in which a participant owns or manages an imaginary team and competes against other participants or a target score for a predetermined prize with the outcome reflecting the relative skill of the participants and determined by statistics generated based on performance by actual individuals participating in actual competitions or athletic events.”
As stated in the Bill, the goal of the proposed legislation is to “protect participants and promote a positive business environment in the conduct of fantasy sports activities.” Accordingly, operators would be required to obtain a permit and meet several other compliance obligations.
Fantasy sports operators would be eligible to obtain a permit so long as the following conditions are satisfied:
The outcome of fantasy sports activities must be determined by statistics generated based on the performance of actual individuals participating in real competitions or athletic events;
All prizes offered to participants must be established and disclosed in advance;
The outcome must not be based solely on the performance of an individual athlete, or on the score, point spread, or any performance of a single real team or combination of real teams;
A fantasy sports operator may permit participants to use a mobile account or a participant deposit account;
A casino licensee may partner with, or enter into a contract with, one or more fantasy sports operators to offer fantasy sports activities; and
A participant in a fantasy sports activity must be at least 18 years of age.
More requirements under Assembly Bill No. 3532
The proposed fantasy sports bill also requires fantasy sports operators to use commercially reasonable practices to prohibit the sharing of statistical information with third parties that could impact a fantasy sports activity until that information is publicly available, and contract with a certified public accountant to perform a financial audit of the operator to ensure compliance with the law. The proposed legislation also mandates that operators segregate participants’ funds from operational funds and maintain certain monetary reserves and financial instruments in the amount of the deposits in participants’ accounts.
Operators would also be required to adopt procedures to ensure that any prohibited participant does not participate in fantasy sports activities and that all participants are at least 18 years of age. To help address the potential for gambling addiction, operators must offer individuals the ability to restrict themselves from participating in fantasy sports activities and take reasonable steps to prevent a participant from exceeding the number of entries a participant may submit to each fantasy sports activity.
The proposed legislation also provides for the imposition of fines on fantasy sports operators who fail to obtain a permit. Fines may also be imposed on anyone who knowingly tampers with software, computers, or other equipment used to conduct fantasy sports activities to alter the payout.
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future
For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
