Lawmakers are reviewing the legal status of daily fantasy sports (DFS) competitions in several states in order to determine whether popular services such as DraftKings and FanDuel are permitted by state gambling laws.
Daily fantasy sports services allow players to compete online by selecting professional athletes for their fictional team and comparing real-world performance statistics over an agreed-upon period of time. Teams with the best results often win prizes or cash.
Legal reviews of pay-to-play DFS have been started by lawmakers in Maryland and Ohio, and lawmakers in Michigan, Minnesota, and Pennsylvania have introduced or announced plans to introduce bills addressing the legality of DFS services. In New York, state Attorney General Eric Schneiderman declared DFS competitions to be a form of “illegal gambling,” under the state’s laws. DFS companies have challenged the ruling in state court.
‘It’s Going to Happen’
Michelle Minton, a consumer policy fellow at the Competitive Enterprise Institute, says prohibition and restrictions send consumers into risky underground markets.
“Whether or not fantasy sports betting is legal, it’s going to happen,” Minton said. “When online gambling was largely considered illegal in the United States, Americans still spent billions of dollars wagering on websites operated overseas. That’s what will happen if daily fantasy sports betting is thrown back into the black market: Most will continue to play online but in a much less secure environment.”
Minton says DFS competitions are games of skill and knowledge.
“The classic fantasy sports game, where you choose a lineup of players, most certainly is a game of skill, and the more knowledge of the players and teams you have, the more likely you are to win,” Minton said.
Showdown in New York
Daniel Wallach, a sports law attorney with Becker and Poliakoff, a commercial law firm based in Fort Lauderdale, Florida, says the outcome of New York regulators’ war on fantasy football will have consequences for sports fans across the nation.
“If [DFS] loses New York, it could potentially lose a lot more,” Wallach said. “In New York, it is fighting for existence.
“New York is the financial center of the world and home to pro sports leagues,” Wallach said. “Being forced out of New York could create a ripple effect throughout the industry and with the daily fantasy sports’ business partners.”
Gabrielle Cintorino ([email protected]) writes from Nashville, Tennessee.
Nathaniel J. Ehrman, “Out of Bounds?: A Legal Analysis of Pay-To-Play Daily Fantasy Sports,” The Sports Lawyers Journal: https://heartland.org/policy-documents/out-bounds-legal-analysis-pay-play-daily-fantasy-sports/