Daily Fantasy Sports (DFS) is one of the most popular betting events US players lay their money on. At some betting companies, DFS punts are proven to be the most lucrative sporting event. This hasn’t gone unnoticed by the New Jersey Division of Consumer Affairs, which has decided to set new fees for the operators. The fees in question are DFS permit fees, and they may prove to be fatal for some smaller businesses.

The new permit for DFS will mean new profits for the local government since the operators are raking in big cash from their DFS offers. If the operators wish to acquire the permit, they will have to pay a $500 application fee, but it doesn’t stop there. The permit will bring in new annual fees as well. The whole system is based on tiers. Small betting operators that earn less than $50,000 from DFS will have to pay a $5,000 annual fee. On the other end of the spectrum, we have companies that earn more than $250,000 who will have to pay $50,000 for the annual fee.

Although this may seem like progressive taxation aimed to be fair for all NJ casinos, it may prove to be counter-effective. Note that only two operators belong in the top-grossing tier, and those are DraftKings and FanDuel. This means that everybody gets off cheap while the two of them will have to pay top dollar in order to stay in business. However, DraftKings and FanDuel earn millions a year from sports betting, so this measure won’t hurt them a bit.

Apart from the annual fees, the Division also demands operators have their offices and betting shops in Atlantic City in order to be subjected to the inspection of their software. Given the fact that Atlantic City aims to invest in casino marketing, this measure is more than understandable. Now, this is where another problem lurks, and this time it means bad news for small operators. It would mean renting costly premises inside the city limits, which can set small operators back significantly. DraftKings and FanDuel, again, won’t even notice it since they earn enough to cover both expenses. Fortunately, the Division is still taking comments from the public, so it remains to be seen whether this law will be enacted.