New Jersey appears poised to begin taxing and regulating daily fantasy sports.

Last week, New Jersey Senate passed legislation seeking to tax and regulate daily fantasy sports operators in the state. It passed by a vote of 29 to 6. The legislation was also passed by the state Assembly in May 2017. Now, the bill will head to the desk of New Jersey Gov. Chris Christie. Christie will either veto it or sign it into law.

It remains unclear whether Christie will sign the bill into law. He previously expressed an interest in allowing New Jersey residents to play daily fantasy sports. However, he also said he thought the state legislature had more pressing issues to deal with.

Daily fantasy sports: A game of skill

Under the terms of the legislation, daily fantasy sports will be categorized as a game of skill. As a result, it will not come under the control of the Division of Gaming Enforcement.

Should Christie sign the bill, operators would be invited to apply for a permit from the New Jersey Department of Consumer Affairs. Licensed operators would then be forced to pay a 10.5 percent tax on revenues.

The state estimates this legislation will bring in approximately $6.6 million in tax revenue from daily fantasy sports operators.

Casinos and racetracks

Existing daily fantasy sports operators like DraftKings and FanDuel will not be the only ones permitted to apply for a permit. In fact, New Jersey casinos and racetracks will be invited to apply and partner with existing operators. However, casinos partnering with daily fantasy sports operators will be required to host at least one of the operators servers in Atlantic City.

Daily fantasy sports regulations included in the legislation will require players be at least 18 years old. Plus, operators will not be allowed to run games based on high school sports.

The legislation was passed just days after the United States Supreme Court announced it would hear New Jersey’s case challenge to the federal ban on sports betting.

New Jersey’s sports betting challenge

New Jersey Congressman Frank Pallone, Jr. also recently released a draft of a bill calling for the repeal of the 1992 Professional and Amateur Sports Protection Act (PASPA).

Plus, the American Gaming Association just launched a new campaign aimed at ending the federal ban on sports, pushing to see PASPA repealed.

Of course, sports betting is not considered a skill game like daily fantasy sports. In daily fantasy sports, players create teams made up of pro athletes and compete against each other in tournament-style competitions.

DraftKings and FanDuel merger

On the industry side of things, the Federal Trade Commission announced at the end of June it would be taking action to prevent the merger of daily fantasy sports’ top two sites: DraftKings and FanDuel.

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Martin Derbyshire

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In his over 10 years covering the US online poker, legal NJ online gambling, and land-based casino industries, Martin Derbyshire has worn the hats of award-winning journalist and video and film producer. He has logged countless miles reporting on the world of high stakes gambling.