Daily fantasy sports was an unauthorized activity in the state of New York until August of last year when lawmakers of the state decided to approve DFS contests. Once legislation was approved and regulations were in place, sites such as DraftKings and FanDuel were able to offer contests for real money as the activity is considered a game of skill instead of chance.
The TimesUnion reported data provided by the New York Gaming Commission about the first five months of daily fantasy sports operation which showed that over $2.8 million was earned in tax revenues from late August to January. Gross revenues hit over $18.6 million during that time frame which saw the state earn close to $3 million from the activity.
The tax funds go towards the New York Lottery fund with the money being used for education aid. For the five month time frame, operators in New York took in close to $180.4 million in entry fees. The month of November was the most successful for the industry when $4.4 million in combined gross revenues were earned and the state received $667,129 in taxes.
New York was one of the first to name daily fantasy sports an illegal activity when the Attorney General Eric Schneiderman made his opinion of the industry known in late 2015. This basically created a firestorm in which DFS was considered by several states, with many choosing to name the activity illegal. In early 2016, states began to create legislation to regulate the industry inside their borders, with New York passing legislation in August 2016.
Now nine operators offer DFS services in New York State including:
- Fantasy Draft
- Synkt Games
Each of these companies are currently operating under a temporary permit as permanent rules for DFS are being considered.
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