New Jersey Congressman Frank Pallone has questioned the “hypocrisy” of the legal status of daily fantasy sports (DFS) contests while sports betting continues to be blocked by the federal government, after hearing testimony Wednesday on the legality of DFS.

Pallone, a ranking member of the House Energy and Commerce Committee, said in his opening statement to the Subcommittee on Commerce, Manufacturing and Trade that despite its popularity, DFS contests are operated “in a murky legal framework by an industry that is mostly unregulated”.

“It is crucial that consumers know what they are purchasing when they sign up for DFS and that they understand the risk of losing money in the process,” he said.

Pallone also criticised the fact that neither DraftKings nor FanDuel accepted an invitation to present testimony at the hearing, although they were represented by the Fantasy Sports Trade Association.

According to Pallone, DFS operators and the sports leagues that support them have failed to demonstrate how daily fantasy sports contests differ from sports betting, highlighting the fact that DraftKings has “quietly” secured a United Kingdom gambling licence in order to offer its contest.

“I must also mention the hypocrisy of those arguing that Daily Fantasy Sports is readily distinguishable from traditional sports betting,” said Pallone. “While quietly applying for and receiving gambling licenses in the United Kingdom, Daily Fantasy operators continue to argue to interested states in the U.S. that—unlike sports betting—it is not gambling. Their reliance on the arbitrary distinction of skill and chance is also unconvincing, especially since both the Department of Justice and the NFL have asserted that sports betting also is a game of skill.”

“In New Jersey, voters approved a 2-to-1 referendum in 2011 to allow sports betting at casinos and racetracks,” Pallone added. “In response, every major professional sports league joined together and sued the state to stop the plan’s implementation and stifle the will of the voters. How can the professional sports leagues oppose sports betting at casinos and racetracks, but support and prosper from the betting that is taking place every day in daily fantasy sports? To date, the leagues and others have not sufficiently explained the difference between fantasy sports, sports betting and other forms of gambling.”

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