Are Fantasy Sports Legal?

In Blog by Tim Solomon0 Comments

Fantasy sports in just a few years has become a multi-billion dollar industry. The latest version of this is Daily Fantasy Sports (DFS). A fast paced and simple way for people to engage in fantasy sport competitions. With prize pots over a million dollars and no season long commitments, DFS has skyrocketed the popularity of fantasy sports.

Over 50 million American are winning and risking real money on real-life sports competitions. But how can this be when sports betting is illegal in the US?

“Over 50 million American are winning and risking real money on real-life sports competitions.”

The 2006 Unlawful Internet Gambling Enforcement Act was signed into law. It’s purpose was to help prevent unlicensed online gambling. Besides regulating online gambling it also defined when fantasy sports competitions. Like poker, fantasy sports are considered games or contests of skill. The law clearly defines when fantasy sports is not considered gambling.

Fantasy sports and other games of skill are difficult to define. There is no clear way to say how much skill a player implements in playing verses chance.

The fact is that the UIGEA predates the creation of DFS and FS as we know it today. Regulators did not necessary take into account whether or not it is truly legal. With only a handful of states allowing sports betting, the future for Daily Fantasy Sports might be a contentious one.

There is no clear way to say how much skill a player implements in playing verses chance.

Laws on gambling are generally decided on the state level not federal. So while the federal law explains in detail when fantasy sports is considered gambling, states have the ability to contest this.

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Five states have already banned fantasy football and only one – Maryland – has declared it legal.

Currently there is movement in the US congress to change that. Traditional casinos and gambling operators have been lobbying to develop the emerging market. And major operators like DraftKings and FanDuel are flooding TV and internet with ads that bring greater exposure to industry.

It could be seen however that this increased exposure my speed up the time tables to greater regulation in fantasy sports. Rep. Frank Pallone (D-N.J.) called for a hearing on the matter. “Despite how mainstream these sites have become … the legal landscape governing those activities remains murky,” he said in a statement.

About the Author

Tim Solomon

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Timothy is the Business Development Manager for Fantasy Network. Follow Tim on Twitter @tlcsolomon or contact him by email tim@fantasynetwork.com

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Are Fantasy Sports Legal?
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A look at the legality of Daily Fantasy Sports
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