New York Racinos Aim to Offer Daily Fantasy

New York's racetrack-based casinos are under fire from two key legislators for trying to get the industry included in a measure under consideration at the state Capitol to legalize fantasy sports wagering.

The New York Gaming Association, which represents the state's nine racino operators, including Genting's sprawling casino at Aqueduct Racetrack, is pressing a plan to limit operation of sites offering daily fantasy sports contests to the racinos and three commercial casinos now under construction in New York.

"The (NYGA) is trying, in a power play, to take a piece of the fantasy sports action,'' said Sen. John Bonacic, chairman of the Senate Racing and Wagering Committee. He made his comments after his committee reported out a bill he authored to legalize DFS contests in New York.

In the committee meeting, Bonacic said the racinos are "basically being greedy.''

Assemblyman Gary Pretlow, the chairman of the Assembly Racing and Wagering Committee, did not disagree.

"They've shown no interest in the past. (DFS) has been around for years. We've not heard a peep out of anyone. Now that we're going to legalize them and the state's going to reap some benefits from the operations, the racinos and casinos say they want a piece of the action,'' he said.

The state's attorney general, Eric Schneiderman, several months ago ordered DraftKings and FanDuel to shut down their New York operations. He called their daily contests illegal forms of gambling because they are games of chance. The companies have insisted their contests are games of skill. Litigation in the matter, though, is on hold after an agreement by Schneiderman and the companies to give time for the Legislature to weigh in on the issue before it ends its 2016 session June 16. If there is no deal in the Legislature, the court case will resume again later this year.

Bonacic and Pretlow both have introduced DFS legalization bills, but they would have to be amended to become "same as" bills for final enactment to happen. Bonacic said the only major differences between his bill and the Pretlow legislation involves payments to the state by the DFS operators. Bonacic's bill has a fee from the operators to the state that would amount to the lesser of $500,000 or 5% of DFS gross revenues, while Pretlow's has a sliding scale fee structure intended to protect the smaller DFS companies that do not have the deep pockets of DraftKings or FanDuel.

The NYGA, in a memo opposing the Bonacic bill, said the measure "would do substantial damage to New York's gaming industry.'' The trade group says the market is already saturated and that the bill would put New York track-based casinos at a competitive disadvantage.

Pretlow, though, dismissed the concerns.

"There's nothing to stop them from starting their own fantasy sports platforms if they want,'' he said of racinos.

Bonacic said the racino industry is engaged in a "full-court press," including putting pressure on lawmakers with racinos in their districts, to link DFS licenses with brick-and-mortar racinos and casinos. "It really doesn't work,'' he said.

After his committee meeting, Bonacic said: "We're putting legislation forward saying DFS is legal, that it is a game of skill. And now you're going to put it in a gaming facility and bet on sports? That's clearly a violation of the (Federal) Wire Act and some of the other federal legislation," such as the Unlawful Internet Gambling Enforcement Act of 2006.

Bonacic also said existing DFS operators "don't want any part" of racinos, citing the potential legal consequences of being aligned with operators that offer games already deemed games of chance.