Congressional subcommittee to analyze daily fantasy

A congressional hearing to examine the daily fantasy sports industry will take place next month, an Energy and Commerce senior staffer told ESPN.

The Subcommittee on Commerce, Manufacturing, and Trade plans to hold the hearing May 11, the staffer, who is a Democrat, said. The committee will consider the legal status of daily fantasy, online gaming and sports betting and to what extent proactive consumer protections are needed.

The hearing was requested in September by Rep. Frank Pallone, D-N.J., after a barrage of daily fantasy advertising hit the airwaves and industry leaders DraftKings and FanDuel came under fire for allowing employees to compete in cash games on other sites.

The NBA has equity in FanDuel, and MLB and the NHL have equity in DraftKings. The NFL does not have an equity deal at the league level, but 28 of 32 teams have sponsorship or marketing deals with one of the companies, and New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones have equity investments in DraftKings. Discussions are ongoing to determine who will be asked to appear at the hearing.

The NFL, NBA and Major League Baseball did not immediately return requests for comment

The hearing also will focus on actions that states have taken regarding daily fantasy and whether there is a need for federal involvement, according to the source. Nine state attorneys general have said that daily fantasy sports violate their states' gambling laws. Last week, Alabama Attorney General Luther Strange issued cease-and-desist orders to DraftKings and FanDuel, giving the companies until May 1 to stop offering paid contests in the state. The sites also are in legal battles with New York, Illinois and Texas.

Virginia and Indiana have passed bills this year clarifying fantasy sports' legal status in their states, and Massachusetts has created regulations for daily fantasy. More than 20 states have considered bills this year that would clarify the legal status of fantasy sports.

NBA commissioner Adam Silver has been outspoken in his belief that federal regulations are needed for a future he believes will include expanded legalized sports betting in the United States.

New Jersey is awaiting a ruling from the 3rd Circuit Court of Appeals in its fight to bring Las Vegas-style sports betting to the Garden State's racetracks and casinos.