A U.S. House of Representatives subcommittee convened a hearing about online gambling laws and daily fantasy sports (DFS) in order to learn more about the laws and consider whether to impose federal regulations on popular DFS services, such as DraftKings and FanDuel.
The U.S. House Subcommittee on Commerce, Manufacturing, and Trade held a hearing in May 2016 examining DFS and the applicability of existing federal anti-gambling laws to the new industry.
DFS allows individuals to compete online by selecting professional athletes for imaginary teams. The players’ real-world performance statistics are scored over an agreed-upon period of time, and the individual with the highest score wins, sometimes receiving cash or prizes as a reward.
Can’t Stop the Fun
Doug Walker, an economics professor at the College of Charleston, says government can’t effectively regulate technological change and shouldn’t try to suppress it.
“Any time these issues come up, like online gambling and casino games, what seems silly to me is that the government tries to get involved and stop it, as if they can keep up with technology and write laws that are going to prevent people from engaging in this behavior,” Walker said. “The politicians aren’t as smart as the people developing technologies to do things people want to do.”
Michelle Minton, a consumer policy fellow at the Competitive Enterprise Institute, says government efforts to suppress various kinds of entertainment drive people into the criminal underground.
“Just because there is a ban on something doesn’t mean the activity has stopped,” Minton said. “It just means it has moved to the black market. That’s what has happened with sports gambling. It’s now a huge market—a multi-billion-dollar, every year, industry—and the illegal market is bigger than the legal one.”
Leaving It to the States
Minton says state lawmakers should be the ones deciding what’s best for the people they govern and that the Constitution agrees with that principle.
“Gambling regulations, in terms of oversight, have always been left to the states,” Minton said. “The Constitution doesn’t say anything about gambling, doesn’t give that power of regulation to Congress. Therefore, [I] think it should remain with the states and individuals.”
Minton says state-level regulation works just fine and the legitimate fantasy sports providers try to obey the laws.
“Many of the states determine what gambling is based on whether or not they consider it a skill game or a pure luck game,” Minton said. “Each state has their own ways of determining that, and DFS tries to operate within those laws. They have said they’re a game of skill, so they don’t count as gambling and therefore should be legal.”
Elizabeth BeShears ([email protected]) writes from Trussville, Alabama.
Jon Boswell, “Fantasy Sports: A Game of Skill That Is Implicitly Legal Under State Law, and Now Explicitly Legal Under Federal Law,” Cardozo Arts & Entertainment Law Journal, March 1, 2008: https://heartland.org/policy-documents/fantasy-sports-game-skill-implicitly-legal-under-state-law-and-now-explicitly-legal/