A bipartisan N.C. House bill would have North Carolina join an increasing number of states that require fantasy sports operators, such as FanDuel and DraftKings, to register their companies with the state in order to conduct business.

The four primary sponsors of House Bill 279, introduced Wednesday, include state Reps. Ed Hanes, D-Forsyth, and Jon Hardister, R-Guilford.

If signed into law, the requirement would go into effect Jan. 1.

Fantasy sports, as defined in the bill, are those offered online in which participants select real-life players for fantasy teams. They use the players' game performances to determine winners or losers, whether on a points system or cumulative statistics.

The bill, however, does not affect such activities as NCAA Tournament pools or individual fantasy sports leagues.

Hanes said similar legislation became law in eight states in 2016.

"This area is growing fast," he said. "This bill take the best provisions from those laws and makes appropriate adjustments for North Carolina. We've seen in other states that the model works, having gone through a full football season and more with similar regulations in place."

The N.C. Secretary of State's Office would regulate the operators.

Hanes said that office would have the authority to issue rules regarding any evidence that operators must show to support their calculations.

"These same provisions have proven successful in every state that has passed a similar law," he said. "This is part of why we need this legislation, to make sure any company offering contests here is playing by the right set of rules."

The initial registration fee would range from $2,500 to no more than $10,000 annually, while the renewal fee would be the lesser of $5,000 or 10 percent of an operator's net revenue from the previous year. Some operators create limited liability companies in each state in which they operate.

FanDuel and DraftKings offer daily fantasy competitions where participants can choose a different lineup each time they play. Their prizes can range from hundreds of dollars to more than $1 million, according to the fantasy operators.

Those claims, however, have been successfully challenged as misleading by some states.

In October, The New York Times reported that DraftKings and FanDuel agreed to pay between $8 million and $12 million to the New York Attorney General's Office to settle claims that they engaged in false advertising when they spent nearly $500 million blitzing the national airwaves with commercials in 2015.

According to the industry website Legalsportsreport.com, 11 states have laws in place to regulate daily fantasy sports operations and competitions that have led one or both operators to curtail or not take customers from those states.

North Carolina is among 32 states in which the two operators as well as other fantasy operators are active.

The bill would require the operators to verify that participants are at least 18 years old; reserve enough money to cover all cash prizes; not conduct fantasy contests involving college and high school athletes; prevent members of the operators' workforce and immediate families from playing games with cash prizes; and not share information about athletes' playing status that is not already known publicly.

In January 2016, Texas Attorney General Ken Paxton declared his opinion that daily fantasy sports constituted illegal gambling under the state's laws. Texas prohibits bets on game or individual performance.

The North Carolina bill clarifies that it does not consider fantasy contests as gambling, lotteries or gaming as described in state laws on gambling.

The bill contains penalties for making false statements about how the fantasy competition is conducted, and requires annual audits and declarations of ownership changes.

This article is a reprint from the Winston-Salem Journal. To  view the original story and comment, click here.