Daily fantasy sports faces major defeat in Minnesota Legislature

A bill formally legalizing daily fantasy sports hit a wall in a Senate committee Thursday.

Sen. Rod Skoe, DFL-Clearwater, and Senate Majority Leader Tom Bakk, DFL-Cook, expressed opposition in the Taxes Committee that Skoe chairs, and bill author Sen. Sandy Pappas, DFL-St. Paul, surrendered and tabled the bill for the year.

A House version sailed through with no opposition and would have ensured that thousands of Minnesotans can continue to test their skill and luck against other players for cash every day at the touch of a cellphone. Minnesotans by the thousands currently play daily fantasy, in which the contestant pays a fee to pick a roster, winning or losing based on the athletes' performance.

But the industry wanted formal recognition that the games are legal. Attorneys general in some states have declared daily fantasy play to be illegal online gambling, a fate industry advocates hope to avoid here.

In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act but left an exception for "skill-based" contests such as fantasy sports, which quickly became a multimillion-dollar market dominated by DraftKings and FanDuel. The two companies have flooded the airwaves with ads and formed partnerships with the major sports leagues.