UPDATE: The Georgia House Economic Development and Tourism Committee approved DFS bill HB 1329 by a split vote this afternoon. It will now head to the House rules committee. An amendment to funnel daily fantasy sports revenue to higher education facilities to train students to enter the fantasy sports market was voted down.

Time is running out on a proposed Georgia daily fantasy sports bill.

The Georgia House Economic Development and Tourism Committee today held a hearing on HB 1329, a bill to legalize daily fantasy sports contests in the state, but no action was taken as the legislature moves closer to Thursday’s crossover deadline.

If a bill is not moved out of its originating chamber by Thursday, it will be dead for the session.

Georgia DFS not legal, but contests occurring in state

The bill was introduced by Rep. Ron Stephens (R-165), Rep. Trey Kelley (R-16), Rep. Yasmin Neal (D-79), and Rep. Al Williams (D-168).

Stephens presented the bill to the committee this morning, urging members to consider the legislation as DFS contests are currently being hosted in the state, but no tax revenue is being collected from them.

Georgia is considered a gray state for DFS contests. DFS is not legal in Georgia, but not banned outright, so contests are offered by operators and not regulated or taxed.

“Ladies and gentlemen, more than 250,000 Georgians entered daily fantasy sports in 2023. As of 2022, the total number of U.S. fantasy sports players eclipsed 50 million,” Stephens said.

The DFS bill will define fantasy contests as “any online fantasy or simulated game or contest of skill with an entry fee.” Participants will be able to assemble, own, or manage a fictional entry or roster of actual professional or amateur athletes who participate in real-world sporting events. Winning outcomes will be determined solely by clearly established scoring criteria based on one or more statistical results of the performance of individual athletes in a sporting events.

Stephens estimated that licensing fees will generate $8 million in the first year and an additional $40 million in annual revenues will be collected if Georgia legalizes his bill. Tax revenue from DFS contests will go to the Georgia Lottery to fund HOPE scholarships and pre-kindergarten programs in the state.

“Today we’re asking you to accept the revenue of games that are already going on. You’re going to have to make the decision. Do you want to kill the lottery? Do you want to fully fund HOPE? Or do you want to capture the revenue and for the first time regulate the industry that is going on today,” he said.

Despite the more than hour-long committee hearing, no action was taken on the bill. Stephens said he was open to hearing amendments and several committee members noted they were interested in proposing them, but nothing official was introduced.

Time is becoming a factor with this bill, as legislators are moving closer to Thursday’s crossover day. If HB 1329 is not approved by the House at the end of Thursday’s business, it will not be considered for the rest of the session.

The next committee hearing has yet to be scheduled.

Public has their say on Georgia DFS

A mix of industry representatives and family values lobbyists shared their opinions on the bill. The typical comments citing a need for a regulated industry to protect consumers and the dangers of expanded gaming dominated the hearing.

Taylor Hawkins, director of advocacy at Frontline Policy Action, said there is no question that the legalization of DFS would be an expansion of gambling in Georgia. Problem gaming rates, gambling addiction rates will increase if the legislation goes through, he said.

However, if the bill is approved, Hawkins said it can be strengthened to reduce its impact on state residents. A mandatory “cooling off” period can be instituted after users deposit funds into their account and caps on how much a customer can lose in a day, perhaps 30% to 50% of their account, can be instituted.

The Coalition of Fantasy Sports fully support the framework of the bill, spokesperson Kayla Scott told the committee. The coalition represents Underdog Sports, PrizePicks, and Betr, while also representing the 400,000 residents who currently play DFS in the state.

Further bill details

The Georgia Lottery will oversee and regulate DFS in the state. Georgia legislators have set the state’s tax rate at 20% of an operator’s adjusted gross fantasy contest receipts. License holders will be split into “large operators” and all other organizations, which will determine what they pay for a DFS license.

Large operators are defined as those, at the time of receiving its initial or renewed fantasy contest operator license, who have adjusted gross fantasy contests receipts greater than or equal to $5 million within the last 12 months.

Large DFS operators will be required to pay a nonrefundable application fee of $100,000 and an annual licensing fee of $1 million. All other operators will not be charged an application fee and will pay an annual licensing fee of just $5,000.