"Do fantasy games bend the rules?; Gambling laws need clarifying, some experts say" by Eddie Pells | Associated Press August 26, 2014
NEW YORK — Some of the newest incarnations of fantasy football look a lot more like gambling than intricate, outsmart-your-opponent strategy games.
Since 2011, the billion-dollar fantasy market has been infused with dozens of daily and weekly games. Those games allow players to win huge prizes quickly, sometimes in one week, sometimes in just one night.
With players betting thousands or even tens of thousands a night, legal experts believe it’s time to review the section of the 2006 federal law that was written specifically to protect fantasy sports from being banned the way online poker was.
‘‘There’s importance in clarifying the law,’’ said Marc Edelman, a professor at Fordham Law School who studies the law as it applies to fantasy sports. ‘‘As long as there’s uncertainty about the legality of these games, some potential businesses that might enter the marketplace stay out.’’
Seasonal leagues are largely the domain of billion-dollar companies like CBS and ESPN, with close ties to the NFL. For now, they have remained on the sidelines of the short-term business, leaving it largely in the hands of companies such as FanDuel, which is expecting to triple its base to 500,000 fans this season.
‘‘We have the most popular fantasy football game going,’’ said Kevin Ota of ESPN, which boasts an estimated 14 million fantasy players. ‘‘It’s been incredibly successful, and we’re focused on improving our game every year. We always keep our eye on opportunities to serve sports fans better.’’
ESPN officials say they have no immediate plans for weekly cash games.
Traditional leagues at ESPN and elsewhere received their legal clearance from the 2006 Unlawful Internet Gambling Enforcement Act, which was designed mainly to stop Internet poker. It included an important ‘‘carve out’’ for fantasy football. Meanwhile, most state laws define fantasy football as skill-based propositions, which keeps them legal.
‘‘It’s an easy argument with seasonlong games because you exercise a great deal of skill in operating a team,’’ said Las Vegas attorney Tony Cabot, who has practiced gambling law for three decades. ‘‘You have to figure out who to draft, play, trade and all those things to have a successful season. And because you’re doing all that, you’re betting on an outcome you can control.’’
The day-game world can be much different and the skill level needed to ‘‘run’’ a team that exists for only one week is far lower than that for a season-long enterprise.
And a growing number of fantasy sites have games that ‘‘look very much like prop bets or parlay cards,’’ Cabot says, with some games as simple as paying an ‘‘entry’’ fee, then choosing who, between two players, will finish a certain day with more receiving yards.
‘‘It depends on how you run your game,’’ Cabot said. ‘‘If you said, ‘We’re going to do fantasy, quick pick, random drafts,’ I say, ‘How can that be skill based?’ But if it’s a daily game where you’re doing a draft, have the ability to change players halfway through the game and make all these decisions, then it’s much closer to a traditional model.’’
In 2007, Cabot coauthored a legal paper titled ‘‘Fantasy Sports: One Form of Mainstream Wagering in the United States.’’ It offers a point-by-point deconstruction of the federal law that essentially legalized a growing industry that, to some, looks very much like gambling. One of Cabot’s key points is that the NFL, seeing the revenue and viewership possibilities of fantasy football, hired a well-paid lobbyist who helped smooth the way for an imperfect bill to become law.
Cabot’s conclusion is the process ‘‘ultimately has done a great disservice to reasoned policy making and, potentially, to the long-term future of the fantasy sports industry itself.’’
He counts the growing day-game business as one area especially susceptible to confusion. Edelman agrees.
The games are pretty much unregulated. They allow anyone over 18 to gamble on sports outcomes online, while traditional sports gambling is available online only in Nevada and, in some forms, Delaware.
The NFL keeps watching the numbers swell, while walking the line between using fantasy football to grow its game and maintaining its long-held, hard-line stance against anything perceived as gambling.
Now if you will excuse me a minute, I'm going to go check the point spreads that are published in the paper every day.
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Also see:
Duo hit pay dirt giving ‘Madden’ advice
DraftKings raises $41 million
Looks like it is all about big bu$ine$$.
