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Daily fantasy sports companies eye breakout NFL season

In this Wednesday, Sept. 9, 2015, photo, an employee in the software development department of DraftKings, a daily fantasy sports company, walks past screens displaying the company's online system stats in Boston. The daily fantasy sports industry is eyeing a breakout season as NFL games begin. And its two dominant companies, DraftKings and FanDuel, are touting lucrative opening week prizes to try to draw more customers as more competitors pop up. (AP Photo/Stephan Savoia)

JEFFERSON CITY • Fantasy sports players could contribute “several million” dollars to state coffers under a plan to legalize and regulate the popular online games in Missouri.

In testimony before a House committee Wednesday, state Rep. Scott Fitzpatrick, R-Shell Knob, said the more than 900,000 fantasy players in Missouri would pay taxes on their winnings, while fantasy sports operators would have to pay a $5,000 fee to register with the state.

That all could bring “multi-millions of dollars” that Gov. Jay Nixon wants to spend on education, Fitzpatrick said.

“Any earnings the players have on this in Missouri, it’s in the millions of dollars. They are going to pay taxes on that. It is contributing to the income tax that we receive at the state,” he said.

Fitzpatrick is sponsoring legislation that would regulate industry giants like FanDuel and DraftKings, which operate daily fantasy sports games throughout the nation. Smaller operators based in St. Louis also would be affected by the proposal.

The two national companies are fighting legal battles in a number of states including Illinois, where Attorney General Lisa Madigan has said the activity is illegal.

Lawsuits also are underway in other states, including New York.

Fitzpatrick’s plan includes a registration fee and requirements that ensure no one under age 18 can play. Companies doing business in Missouri would have to undergo annual audits. Companies would face $1,000 fines if they broke rules.

Industry officials told lawmakers they support the proposal.

“We would welcome a regulatory environment,” said Derek Hein, a DraftKings representative.

Hein dismissed claims that playing fantasy sports is akin to poker or casino games.

In daily fantasy sports, players pay an entry fee and then pick real athletes for their teams. Winners are based on the performance of those players.

“I think we’re actually closer to stocks than we are any of those other games,” Hein said.

The measure was discussed but likely won’t be voted on until next week.

The legislation is House Bill 1941.

Kurt Erickson is a reporter for the St. Louis Post-Dispatch

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