Fantasy Football Betting
Fantasy football is a massive industry, estimated at a yearly economic impact of $4 billion. Sites such as Fanduel, Draftkings and DraftDay help to rake in this giant amount of income. It is a time-honored tradition for countless men (and women!) beginning in the fall of every year. There is no question that fantasy football is popular. One question that remains, though, is why is fantasy football betting legal? Why isn’t it considered gambling?
Fantasy Football Betting – why is it legal
Just to make sure one understands, it is legal to bet on fantasy sports. The Unlawful Internet Gambling and Enforcement Act of 2006 (http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.o4411:) establishes the legal guidelines for online gambling for any fantasy or simulation sports game that, “has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and…has an outcome that is determined predominately by accumulated statistical results of sporting events…”
In other words, fantasy football is considered a game of skill, not chance. Fantasy football, according to this Act, is a game of skill in that the participants use their superior knowledge of the players they are betting on. Unlike online casino games such as poker, fantasy football is not deemed a game of luck. This is a major distinction between the two.
A full explanation can be found on our page why Fantasy Sports is legal.
One caveat, though, is for residents of Montana, Louisiana, Washington, Iowa, Arizona, and Puerto Rico are prohibited from playing daily fantasy games where they risk their own money. Residents of those states and Puerto Rico are, however, allowed to play in Freeroll contests and other similar free games since they are not risking their own money.
Legal precedent also suggests that fantasy football is a game of skill. This distinction is discussed in a 2006 paper from the North Carolina Journal of Law & Technology, (http://www.forbes.com.law/). According to this journal, there is an element of chance, such as when your favorite player gets injured. However, the actual presence of chance cannot, in and of itself, classify an activity as gambling.
In 2007, the legal question of skill versus chance was challenged again in 2007 by a Colorado lawyer who sued three pay-for-play online fantasy sites, and the Court ruled, “The court disagreed [with the plaintiff] …and dismissed the case. In doing so, it indicated that fantasy sports are games of skill because players actively manage their teams, employing their sports knowledge and making strategic decisions,” (http://www.law.illinois.edu/bljournal/post/2007 /11/09/The-Legal-Attack-on-Fantasy-Sports.aspx).
The editor of Forbes sports edition says he tends to agree more with the Colorado lawyer. He is not so sure that choosing the best players for that week is more than luck or chance, especially since a player’s performance can vary from week to week, (http://www.forbes.com/sites/robertlaura/2012/09/14/fantasy-football-teaches-valuable-investment-lessons/).
While it's an on going battle Fanduel Vs Draftkings for the market leadership, the question remains: Is Fantasy Football betting a game of chance, and therefore, gambling? Or is it completely based on the fantasy football players’ knowledge of the individual football players and their skill at predicting the football players’ performance based on past performances? This is a hot topic of debate that will surely stick around for a while.