Congress' research arm releases report on daily fantasy sports

Could Congress hold a hearing on daily fantasy sports this year? AP Photo/Pablo Martinez Monsivais

One week before Christmas, the Congressional Research Service (CRS) completed a report about the daily fantasy industry. The single-spaced, two-page report dated Dec. 18, 2015 was recently obtained by Chalk and may represent an incremental step towards a 2016 hearing on Capitol Hill.

"The recent emergence of the daily fantasy sports (DFS) industry ... has prompted many questions about the industry's legality," stated the CRS report.

The CRS report is entitled "You Win Some, You Lose Some: The Complicated Legal Status of Daily Fantasy Sports." A Congressional staffer with first-hand knowledge of the CRS report confirmed its authenticity to Chalk.

The report provides an overview of various issues and makes no legal conclusions. Likewise, it offers no recommendation as to further action by Congress or any federal agency.

As the in-house research arm of Congress, the CRS provides non-partisan analysis on a confidential basis upon request or on its own volition. Members of Congress have access to most CRS reports.

The possibility of a DFS-focused Congressional hearing has been percolating for months.

Republican U.S. Representative Fred Upton, chair of the House Energy and Commerce Committee has previously said a fantasy-related hearing is likely this year, although nothing is scheduled. A Congressional aide on the House Judiciary Committee said "a hearing should happen."

The topics covered in the CRS report are similar to the topics addressed in two legal opinion letters prepared for DFS companies -- one dated March 22, 2013 and another dated Nov. 10, 2014 -- made public during the on-going New York litigation.

"States have traditionally handled regulation of gambling, supported by federal law in situations where an interstate of foreign element might otherwise frustrate the enforcement of state law," posited the CRS report. "With respect to federal law, DFS may implicate at least four gambling-related statutes."

The CRS report concluded by acknowledging that "[s]everal Members of Congress have called for formal inquiries into the operation of DFS and have urged government oversight." The report also cited New Jersey Senator Robert Menendez and New Jersey Representative Frank Pallone as having requested the Federal Trade Commission "to take action to implement safeguards and ensure a fair playing field for participants in the DFS leagues."

On Monday, lawyers for daily fantasy companies DraftKings and FanDuel were told that the sites can continue to take business from New York-based customers until their appeal is heard in New York Supreme Court.