Daily Fantasy Sports Leagues: Is it Gambling?

If you watch football or any other professional sport, there’s no doubt that you’ve probably seen commercials for DraftKings or FanDuel, the two biggest daily fantasy sports sites. Unlike the old fantasy sports systems, where players choose athletes and compete on a season-to-season basis, DraftKings and FanDuel offer daily and weekly fantasy games…at a cost.

Both websites have come under legal scrutiny recently, as states have begun seeing daily fantasy sports as another form of sports gambling, which is illegal in most states.

So how are companies like DraftKings and FanDuel still operating and advertising across the U.S.?

The answer lies in the 2006 Unlawful Internet Gambling Enforcement Act. This measure sought to regulate online betting and gambling, but a clause in the act exempts fantasy sports by claiming that the games require skill and statistical analysis.

This reading of the law allowed for sites like DraftKings and FanDuel to burst onto the scene. Each site is quick to define its service as a “game of skill.” However, states are beginning to enforce their own interpretations of the legality of daily fantasy sports. Illinois and New York recently took steps to ban daily fantasy sports. This trend of states enforcing stricter gambling regulations may be the beginning of the end for the online fad.

For fans of DraftKings and FanDuel, knowing just how skilled individuals have to be in order to profit may reveal the true level of skill required and the true risk of wagering on daily fantasy sports. According to Sports Business Journal,

DFS [daily fantasy sports] affords a huge advantage to skilled players. In the first half of the 2015 MLB season, 91 percent of DFS player profits were won by just 1.3 percent of players.

In other words, only the top 1% made a majority of the winnings.

When your hard-earned money is involved, it’s important to be informed. The Babcock Law Firm seeks to provide valuable legal information that will help protect you and your livelihood. For more information about recent legal issues and other law-related articles, continue browsing our blog and knowledge center.

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