In its first meeting, the NC Lottery Commission’s Sports Betting Committee briskly laid out its first batch of rules.
Deputy Executive Director of Sports Betting, Sterl Carpenter, indicated that this batch would be “heavy on definitions,” which it is. Still, it does clearly outlaw player-versus-house fantasy products.
Carpenter made no mention of targeted launch dates in the meeting, further calling into question whether the state will launch at any point before the deadline of the North Carolina sports betting launch window.
NCLC carves out “prop-style” fantasy sports brands
In the long definitional section of the North Carolina State Lottery Commission Rules Manual For Sports Wagering And Pari-Mutuel Wagering, the Sports Betting Committee clarifies what will and, more importantly, will not qualify as fantasy sports.
Under Rule 1A-001 Definitions,
“‘Fantasy contests’ means fantasy or simulated games or contests in which one or more fantasy contest players compete and winning outcomes reflect the relative knowledge and skill of the fantasy contest players and are determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sporting events.”
Carved out of this definition are all of the following, including contests:
– Based on proposition wagering or contests that involve, result in, or have the effect of mimicking proposition wagering or other forms of Sports Wagering.
– In which an Individual chooses, directly or indirectly, whether individuals or a single real-world team will surpass an identified statistical achievement, such as points scored.
– In which an Individual submits a fantasy contest team which does not involve the knowledge, skill, input, or control of such person.
– In which an Individual submits a fantasy contest team composed of: (i) a single individual; (ii) the entire roster of a real-world team; or (iii) solely individuals who are members of the same real-world team.
– In which an Individual fantasy Player does not compete against at least one other Individual fantasy player.
The focus on outlawing fantasy-versus-the-house (pick ‘em-style fantasy) brands comes on the heels of multiple states taking legal action against the many brands that offer this style of “fantasy sports.”
In some states, brands like PrizePicks and Underdog, two of the leading pick ‘em-style brands, have received cease and desist letters for offering illegal sports bets.
Other states have changed the law around fantasy sports to outlaw these brands specifically.
In North Carolina, where fantasy sports is legal because no current law authorizes or prohibits it, the NCLC is following the interpretations of both states with (New York and Michigan) and without (Florida) legal online sports betting to outlaw brands that skirt the line between fantasy and sports betting.
Coalition for Fantasy Sports caught off guard by proposed rules
This year’s sports betting law, House Bill 347, explicitly leaves fantasy sports out of its purview, stating:
“Nothing in this Article shall apply to fantasy or simulated games or contests in which one or more fantasy contest players compete and winning outcomes reflect the relative knowledge and skill of the fantasy contest players and are determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sporting events.”
Therefore, the NCLC’s first batch of rules, establishing parameters for fantasy sports, would create the bright line needed to outlaw pick-’em style fantasy contests.
The Coalition for Fantasy Sports, representing brands like PrizePicks and Underdog, released a statement after the NCLC meeting. The statement suggested the proposed rules unraveled an understanding the fantasy industry had with North Carolina.
“The legislature ensured that our contests would continue to be offered as fantasy sports when it passed its sports wagering bill just a few months ago,” the statement reads.
Whatever was “ensured” between the CFS and the North Carolina General Assembly wasn’t reflected in HB 347. The law only broadly defines fantasy sports, but the supposition is that it would allow pick-’em products to run in the state.
For the more than two dozen brands that offer pick-’em formats, the new rules proposed by the NCLC Sports Betting Committee would put a clear stop to that practice.
Deadline for feedback on round one of rulemaking
A public hearing on the first round of rulemaking is scheduled for Oct. 27, and public comments can be submitted until Nov. 1. At that point, the Committee will vote on the rules, and a new batch of rules will be proposed.
If states like Ohio are any indication, this process could include three or four more rounds of rulemaking.