What has more than 56 million participants, is worth more than $2 billion and will generate at least $3 billion in cash prizes this year?
The answer might surprise you: The online fantasy sports industry in the United States.
Led by giants FanDuel and DraftKings, fantasy sports has rapidly grown from a small-money diversion for baseball and football fanatics into a mainstream, money-making juggernaut.
And the state of Indiana wants to cash in.
State Rep. Alan Morrison, R-Terre Haute, is drafting legislation that would regulate fantasy sports league activity in Indiana under the state’s licensed casinos.
Currently, there is no federal oversight of the online sports fantasy industry. So at least 15 states have moved to regulate it. Some are seeking to capture a portion of the money that is changing hands while also establishing rules to protect consumers. Other states want to ban for-profit fantasy sports leagues as illegal gambling.
Sports betting is illegal in most states. But fantasy league operators and proponents argue that their contests are not gambling, because they are based more on skills — understanding the sport and anticipating how players will be used week to week — than luck. On Tuesday, the New York attorney general ruled that daily fantasy sports betting sites are illegal gambling operations.
Morrison drafted a bill last year to legalize sports betting in Indiana. But the political climate wasn’t friendly. Gov. Mike Pence and some Statehouse Republicans have resisted the expansion of gambling at every turn.
With the fortune being reaped by FanDuel and DraftKings growing ever larger, a similar bill might have a better chance in the Indiana General Assembly next year.
“The rest of our gaming businesses are subject to taxes,” said Noblesville Republican Luke Kenley, chairman of the state Senate Appropriations Committee. “It seems appropriate that this should be, too.”
Many Indiana legislators, however, might take a wait-and-see attitude, given that the federal government is likely to weigh in.
But Morrison has the right idea. Indiana should aggressively seek to regulate fantasy sports betting in our state, both to protect consumers and to reap a windfall in tax revenue.