Daily fantasy sports, long living in a legal gray area in many states, are now 100 percent OK in Pennsylvania — and 15 percent taxed.
Six fantasy sports sites, including DraftKings and FanDuel, are registered to legally operate under a state law that went into effect Saturday and was part of a larger statewide gaming expansion.
But don't sweat, players: Competitors on those six sites aren't likely to see any change in play and won't need to reregister.
"As far as the game participation for the player, they're really not going to see anything different than they have before," Gaming Control Board spokesman Doug Harbach said Tuesday.
Daily fantasy sports, where users pay an entry fee to participate in contests with payouts, are different from traditional fantasy sports played by friends who create their own leagues and compete over the course of a sports season.
Considered a game of skill, daily fantasy sports have not been considered by the courts to be gambling, Harbach said. The money players spend is considered an entry fee, not a bet. But in recent years, some states have called it illegal gambling, so a wave of bills nationwide have been introduced to formally legalize it in various states. Pennsylvania is now out of the gray area.
And, of course, there's the tax benefit. The point of legalizing the games was not just to formalize the activity but, "candidly, to collect tax revenue," said Harbach.
Each operator will be taxed 15 percent on its revenue, with the money going into the state's general fund. How much that will generate — and whether or how much the operators pass those added costs on to their players — is not yet known.
New Jersey legalized the sports in August, with a 10.5 percent tax on operator revenue. Last year, 59.3 million people in the United States and Canada played fantasy sports, according to the Fantasy Sports Trade Association.
It's not the only piece of the gaming package that is being tapped for revenue — pretty much every other type of wagering in Pennsylvania is subject to hefty taxes, and the state expects to bring in a big chunk of new dough with online gaming, satellite casinos, and more.
The Gaming Control Board believes it has most daily fantasy sports players covered with the six sites, but doesn't have a way of monitoring who is playing where, Harbach said. In a year, the first batch of tax revenue collected will offer a look at how many fantasy sports players are making entries in Pennsylvania.
The sites will be regulated by the Gaming Control Board to ensure fair playing environments and that each licensed operator meets state standards. Requirements for the operators include verifying player identities, ensuring players are aware of rules and prizes before playing, limiting beginner contests to beginning players, and establishing channels for responding to player complaints.
There's one catch for players: Anyone using sites not on the list will technically be playing illegally going forward. Harbach said it was possible that one or two more operators could be added to the list in the future. The legalized operators are DRAFT, Fantasy Football Players Championship, FanDuel, DraftKings, Boom Fantasy, and FastPick.
A FanDuel spokeswoman said players would not see any change due to the new regulation.
"Pennsylvania is the 19th state to pass legislation regulating fantasy sports and we're very pleased to have a regulatory regime in place that makes our legal status clear and lets consumers feel confident playing fantasy sports in the state," FanDuel said in a company statement.