Fantasy sports makes a Play for legitimacy

Fantasy sports, the lucrative online industry that blends virtual worlds with professional sports, was looking for an easy target and found one in Virginia.

Conditions were favorable: Virginia has no casinos or entrenched gaming interests to throw up a roadblock, and it had well-connected lobbyists available for hire and a business-friendly governor, Terry McAuliffe (D).

And two weeks ago, the industry succeeded in persuading lawmakers to make Virginia the first state to regulate fantasy sports, lending legitimacy to a business that has occupied a gray area of Internet trade even as it has exploded in popularity.

Virginia is the beachhead in a national fight by the industry for friendly state regulations to establish daily fantasy sports as part of American culture and commerce.

Top operators DraftKings and FanDuel are racing from statehouse to statehouse to craft favorable laws before attorneys general shut down their business as illegal gambling, as has happened in seven states.

In the space of a year, the campaign has ballooned from a couple of lobbyists in two states to more than 75 lobbyists in 35 states, according to the lawyer spearheading the effort. The companies, ordinarily business competitors, have joined forces for the lobbying effort.

“DraftKings and FanDuel don’t get a lot of bites at this apple,” said Chris Grove, a partner at the gaming consulting firm Narus Advisors. “They have a window to make this happen, to allow them to survive.”

Policymakers, many of whom have little personal experience with daily fantasy sports, are faced with regulating a young industry that is signing deals with some of sports’ and media’s most powerful players, including the National Basketball Association, Major League Baseball, the National Hockey League, Fox Sports, Comcast, Google Capital and NBC Sports. High-profile investors include Mark Cuban, the billionaire owner of the Dallas Mavericks.

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