TRENTON – Legislation sponsored by Senator Joseph Lagana which would modify the responsibilities of fantasy sports operators regarding participant funds cleared the Senate State Government, Wagering, Tourism and Historic Preservation Committee today.
“The current double capitalization requirement poses a significant hardship to the operators without any added protection for the players,” said Senator Lagana (D-Bergen/Passaic). “Removing this barrier will free up money to be used for business development, which will increase associated tax revenue and allow for greater innovation and investment in fantasy contests in New Jersey.”
The bill, S-2969, would amend existing law protecting participants funds held in fantasy sports activity accounts. The bill would require fantasy sports operators to either segregate participants funds from operational funds, or maintain a reserve in the amount of the deposits in participants accounts.
Fantasy sports operators allow participants to deposit money in accounts, create fantasy teams by selecting real players and then compete against other contestants to win money.
This bill would bring New Jersey fantasy sports operators’ responsibilities into conformity with those of the 18 other states who currently offer sports betting.
Current law requires fantasy sports operators to segregate the participants funds from operational funds and maintain a reserve equal to the amount in participants accounts. This has been interpreted to mean the operators must segregate the funds, and additionally set aside an equal amount of money from the operating funds to be held for the benefit of players.
The bill was released from committee by a vote of 4-0.