NEBRASKA LEGISLATURE

LINCOLN — Fantasy sports betting is a risky activity that takes advantage of participants, could cost the state millions and benefits only the companies running the games, gambling foes said during a legislative committee hearing Monday.

They testified against Legislative Bill 862, which would define fantasy sports contests as games of skill. A game must be predominantly a game of skill, rather than a game of chance, to be allowed in Nebraska.

But Nate Grasz, research and policy analyst for Nebraska Family Alliance, said it doesn't matter whether skill is involved — fantasy sports games are still gambling.

"It doesn't mean it's good policy," he told the General Affairs Committee.

Gambling bills waste time and face filibusters on the legislative floor, said Pat Loontjer of Gambling With the Good Life, who called fantasy sports games expanded gambling in a state that historically has shot down gambling proposals.

"We would hope you vote all of these down and get on with the good things the state needs to accomplish in this short session," she said.

The popularity of fantasy sports, particularly daily games, has exploded in recent years. The online games allow users to act as a "general manager" and create virtual teams of real players. Users compete based on the players' statistical performance in real sporting events. Some fantasy games are played over a sports season. Daily fantasy games let users pick new teams more often.

DraftKings and FanDuel, the leading daily fantasy sports teams, collected $200 million in entry fees in New York alone last year, Grasz said. Meanwhile, the vast majority of players lose money, he said.

"It seems like the only real winners are the companies who operate them," he said.

State Sen. Tyson Larson of O'Neill, the bill's sponsor and chairman of the General Affairs Committee, has said he believes fantasy sports are already legal under the Nebraska Constitution.

Nebraska Attorney General Doug Peterson hasn't issued an opinion on the legality of fantasy sports here.

Fantasy sports companies are facing legal battles in other states, mostly notably in New York. DraftKings can't operate in six states, including Iowa.

LB 862 would make sure that the 300,000 Nebraskans who play fantasy sports now can continue to play, Larson said.

"The last thing we want to do is criminalize 300,000 people," said Paul Charchian, president of Fantasy Sports Trade Association.

Derek Hein, manager of government affairs for DraftKings, said his company is open to the State of Nebraska regulating the games. But he said his company already has safeguards in place, such as verifying ages to prohibit minors from playing and banning players from having multiple accounts.

The most common entry fee is $3, Charchian said.

Anecdotal evidence exists that Nebraskans who play fantasy sports have been diagnosed as problem gamblers, said David Geier, director of the Nebraska Gamblers Assistance Program.

His group, the Nebraska Commission on Problem Gambling, took a neutral position on LB 862, because the organization is unsure how to assess fantasy sports.

"People in the field say that every kid in high school has a casino in his pocket," Geier said. "That's what the smartphone is doing, so we really don't know what's going on with this."

Lincoln Sen. Colby Coash, a member of the General Affairs Committee, said he doesn't want fantasy sports users to risk everything they own but also doesn't want to cast his vote "based on a sound bite" by anti-gambling groups.

"It's easy to come here and say it's expanded gambling," he said. "But I think it's important to understand how this form of entertainment actually works and what it does and doesn't do."

As introduced, Larson's bill would have no fiscal impact on the state, a legislative estimate shows. Among the other bills before the General Affairs Committee was LB 820, sponsored by State Sen. Dan Hughes of Venango.

Under that bill, lotteries and raffles based on the timing of naturally occurring events, such as the weather, would be allowed. In Alaska, for example, people guess on when the spring ice thaw will occur.

Nonprofit groups could use such games as fundraising events, Hughes said.

Opponents said the bill doesn't define naturally occurring event, leaving the potential for the games to be based on the first home run of a baseball game or the first touchdown of a football game. They also said it would suck dollars from the marketplace.

The committee took no action on either bill.

Contact the writer: 402-473-9581, emily.nohr@owh.com

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