Alabama Legalizes Daily Fantasy Sports

Three years after the state’s attorney general declared that daily fantasy sports were illegal in Alabama, lawmakers found a way to legalize daily fantasy in the state in early June of 2019.

Legislators passed a bill in mid-May legalizing daily fantasy games that was just signed by Governor Kay Ivey before the end of Alabama’s current legislative session.

However, hours before Gov. Ivey added her signature to the measure, the state Senate added a measure to boost the tax on revenue for operators.

By a vote of 22-8, the Senate moved the tax rate from 8% to 10.5%. The House later voted to approve the tax rate amendment.

After the amendment was finalized, Gov. Ivey signed the bill into law.

Expected to bring in roughly $4 million in revenue per year for the state, the legislation caps registration fees based upon nationwide revenue for a licensed operator.

Operators that bring in more than $10 million in nationwide revenue will pay a yearly fee of $85,000 to the attorney general of Alabama.

Smaller outlets that make far less than the $10 million number will be subjected to a minuscule fee of $1,000 annually.

Will FanDuel and DraftKings Return to Alabama?

The fees won’t stop operators such as FanDuel and DraftKings from entering the market three years after Attorney General Luther Strange ordered the two companies to stop business in the state.

At the time, AG Strange wrote, “Daily fantasy sports operators claim that they operate legally under Alabama law.”

“However, paid daily fantasy sports contests are in fact illegal gambling under Alabama law,” Attorney General Strange said in his statement.

Now that the legal hurdle has been climbed, both companies are expected to enter the market with enthusiasm.

In a statement, FanDuel welcomed the legislation and said that they would be finalizing plans soon for a return to Alabama.

“We are excited to bring FanDuel Daily Fantasy Sports to the great people of Alabama. We would like to thank Rep. Kyle South, who fought tirelessly to bring fantasy sports back to Alabama.”

“We also are grateful for the support from Speaker McCutcheon, Sen. Del Marsh, and Sen. Tom Whatley.”

“We are working hard to bring our fantasy sports products to Alabama residents and we will have more details very soon,” the statement concluded.

Neither FanDuel nor DraftKings had a concrete date for their return to the Alabama market.

After Approval of the Alabama Law, How is Daily Fantasy Growing in America?

With Alabama and Iowa both legalizing daily fantasy games in recent weeks, that leaves just six states in America that have yet to permit some form of DFS play.

Those states include Arizona, Hawaii, Idaho, Montana, Nevada, and Washington.

Three other states, Texas, Illinois and Florida, all have attorney generals that have spoken negatively about DFS but have allowed companies to operate in their states in the meantime.

Unlike other states, the Alabama bill is unique in that players must be 19 years of age and college sports are not off limits.

This means that residents will be able to build rosters around their beloved Crimson Tide football team in September, although the start date for legal DFS is unknown at this time.

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