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.
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
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!
