If you are a casual sports fan and watch TV then more likely than not you have been bombarded by daily fantasy sport commercials. Fanduel and DraftKings, the two leading daily fantasy websites, have employed an impressive marketing push. This push is demonstrated in the seemingly endless non-stop overload of commercials advertising the fact that their websites are giving away millions of dollars per week which end up in the pockets of “average joes.” The push has been successful–in the sense you would have had to be living under a rock to not have heard of Fanduel or DraftKings. However, the marketing push has not only been seen by potential customers, but it has also captured the attention of state officials and Congress, which has called for a hearing on the legality of fantasy sports betting.

Sports betting is illegal throughout most of the United States, causing many to question how these websites are legal? Fanduel and DraftKings both advertise they are games of skill, opposed to games of chance, and thus fall under an exception created under the 2006 Unlawful Internet Gaming Enforcement Act. The way the games operate is that you choose individual players to be on your team and based on their individual performance, your team may or may not win. Fanduel and DraftKing’s argument of being a game of skill seems to settle on the premise that paying attention to details, such as matchups between players, is a skill.

This distinction could be controversial and could lead Congress to modify the current law. Currently, five states have banned these daily fantasy games and it is possible that more will follow. The NCAA recently came out and stated that student-athletes involved in playing these daily fantasy games risk ineligibility and could face a one-year ban. I would not be surprised to see professional sports come out with a similar statement regarding its players.

It will be interesting what the future holds for websites like Fanduel and DraftKings.

– Brad Roberts

 

 

 

 

 

 

 

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3 Responses to Fantasy or Nightmare? The Legality of Fanduel and DraftKings…

  1. tricker says:

    It’s interesting to consider the potential conflict of interest that exists when professional athletes play daily fantasy games. Maybe this is different than traditional sports betting that involves a player betting on the outcome of a game because an individual player or coach has little control over the outcome of a daily fantasy league. The concern of a participant or coach throwing the game isn’t as prevalent. It seems like it would be difficult for a player or coach to manipulate a daily fantasy league’s outcome. But participants wagering money on events they are participating in does give one pause, and I agree that the NFL and other professional sports leagues will look hard at banning this. I guess there are other concerns that might drive a ban, but any ban at this point probably has more to do with appearances than need.

  2. Christopher Borns says:

    I agree that it will be interesting to see how this all shakes out, but I find it hard to buy the argument that Fanduel and DraftKings are really any different than traditional forms of sports gambling in that they both rely on the outcome of a sporting event (or, in the case of Fanduel and Draftkings, multiple sporting events) that the participant has no control over in order to divvy out winnings. While some background knowledge is required for both, the actual outcome, as it relates to users of Fandual and Draftkings, is based on chance.