The New Jersey Assembly’s Appropriations Committee has passed a bill aimed at establishing fantasy sports regulations to govern fantasy sports contests and their operators within the State. Passage of the proposal in the Committee ensures advancement to the full Assembly for prospective debate and vote.

What are some of the key components of New Jersey’s proposed fantasy sports regulatory regime?

The requirements contained in New Jersey’s proposed legislation to establish fantasy sports regulations include many obligations imposed by similar regulatory schemes enacted across the country including, but not limited to, the following:

  • Permitting requirements;
  • Prevention of employees from participating in contests and sharing confidential information with third parties;
  • Requirements that operators must verify that participants are at least 18 years of age;
  • Providing participants with the ability 999to restrict themselves from participating in contests;
  • Disclosure of the number of entries that a participant may submit to a single contest and taking steps to prevent a participant from exceeding that number;
  • Prohibition against offering contests based upon high school athletics;
  • Mandatory segregation of participants’ entry fee funds from operational funds;
  • Fines for violations of the regulations in amounts up to $50,000 for individuals and up to $200,000 for entity-violators;
  • Requirements that operators must contract with third parties to conduct annual audits.

The proposal envisions enforcement authority vested with the Division of Consumer Affairs in the Department of Law and Public Safety. Additionally, the bill provides for a quarterly tax to be levied upon the gross revenue earned in New Jersey, calculated at 10.5% of such quarterly gross revenue.

Evolution of Fantasy Sports Regulations and the Ongoing Need for a Fantasy Sports Lawyer

The fantasy sports industry, and the laws and regulations that govern it, continue to grow and evolve. New Jersey is just the latest State whose legislators and/or regulatory authorities have sought to intervene in the fantasy sports space. Accordingly, it is essential that fantasy sports operators continue to maintain a watchful eye over the developing legal landscape. To effectively navigate this rapidly changing regulatory framework, operators should work closely with knowledgeable fantasy sports lawyers to regularly review their respective contest platforms, entry fees, prize structures and marketing campaigns.