US House Committee Expected to Hold Daily Fantasy Sports Hearing in November

on October 20, 2015
Rep. Jason Chaffetz, chairman of the House Committee on Oversight & Government Reform, is switching his focus from online gambling to potentially motioning to ban daily fantasy sports. (Image: AP/politico.com)

Rep. Jason Chaffetz, chairman of the House Committee on Oversight & Government Reform, is switching his focus from online gambling to potentially motioning to ban daily fantasy sports. (Image: AP/politico.com)

The House Committee on Oversight & Government Reform is expected to summon daily fantasy sports (DFS) operators to Washington, DC, sometime in November to consider the market that is briskly growing in popularity as well as controversy.

The New York Post is reporting that Rep. Jason Chaffetz (R-Utah), chairman of the committee, is planning to grill DFS leaders DraftKings and FanDuel on their operational procedures and corporate structures.

“The sites have done nothing in Washington to explain what they do,” an unidentified source close to the situation said. “They must have thought they could advertise their way out of regulation.”

Chaffetz Continues Crusade

No politician in Congress has been more outspokenly opposed to online gambling than Chaffetz. The House author of the Restoration of America’s Wire Act (RAWA), the bill that would block all forms of Internet betting on the federal level and circumvent state laws, Chaffetz is now focusing his attention to daily fantasy contests.

And unlike RAWA, which failed to gain much momentum among his colleagues, going after unregulated DFS is a much more popular proposition. Several congresspersons from both chambers have publicly expressed concerns regarding DFS and the need for government intervention.

Rep. Frank Pallone (D-New Jersey) is one the most vocal critics, saying Congress “should examine the relationship between fantasy sports and gambling and the relationships between professional sports leagues, teams, and players and fantasy sports operators.”

Pallone is angered that his state, which passed sports betting legislation last year, has been blocked by the Big Four (NFL, MLB, NBA, NHL) sports leagues and NCAA in implementing and offering betting lines to his residents.

Lawmakers in the Garden State point to the hypocrisy of the leagues in that many have invested interests in DFS platforms while they continue to decry traditional sports betting.

NFL Activates Political Power

Should Chaffetz’s Oversight & Government Reform or another committee schedule a hearing on daily fantasy sports, the National Football League might attempt to use its political power in Washington to obstruct such testimony.

Politico reports the NFL is stepping up its lobbying presence in the Capitol to hopefully ward off legislators.

In addition to the NFL receiving millions of advertising dollars from DFS, 15 teams have partnership deals with FanDuel. New England Patriots owner Robert Kraft also has minority stake in DraftKings.

The NFL’s political action committee “Gridiron PAC” spends upwards of $1 million annually on campaign contributions. The PAC has already donated to Chaffetz and the Oversight’s ranking member Rep. Elijah Cummings (D-Maryland), and recently gave Pallone $5,000, its second-highest recipient for the next election cycle.

But by all accounts, $5,000 won’t be enough for Pallone to look the other way.

“It’s no surprise that the NFL does not want a hearing on daily fantasy sports. They are deeply invested and are already engaging in hypocrisy by supporting fantasy sports betting while opposing sports betting at casinos and the tracks,” Pallone said to ESPN.

With Nevada already declaring DFS violates its current regulatory safeguards, several states inquiring on DFS legality, and the Department of Justice examining federal laws, it appears the discussion on daily fantasy contests is only just beginning.