Daily Fantasy Sports OK’d in New York

Just in time for football season, New York state has legalized daily fantasy sports sites such as FanDuel and DraftKings.

The New York State Gaming Commission issued temporary permits to those two interactive fantasy sports operators, as well as Yahoo, FantasyDraft and Draft. In a news release, the commission said the companies may resume operations immediately in New York.

The games were halted when Democratic Attorney General Eric Schneiderman ruled late last year that they constituted illegal gambling. The sites maintain they are games of skill, which require players to be knowledgeable about football and individual players. A series of court challenges has been ongoing since.

“While the Commission continues work on formal regulations for these games, these temporary permits get companies up and running in New York State while assuring resident players that safeguards are in place,” said Robert Williams, who heads the commission.

At a time when state taxes from traditional gambling like lotteries and casinos are flat or declining, a majority of states are now seeking to regulate — and possibly raise revenue — from daily fantasy sports sites. Fifteen states, including New York, had blocked the games, pending regulation. Other states permitted the games, but were also considering promulgating rules.

With the temporary permits in New York, fantasy operators are required to pay a tax equivalent of 15 percent of their interactive fantasy sports gross revenue generated in the state, the commission said. In addition, the operators must pay a tax equal to one-half of one percent, up to $50,000 annually.