Daily Fantasy Sports Leagues, one of the biggest fads of 2015, has taken over Sundays (as well as every other day of the week) of couch-sitting-schlubs who love sports and/or money. While some proclaim that the leagues are fun, they come with a huge ethical debate. This poses the question, “are daily fantasy leagues considered online gambling and should they be legal”?
Recently, daily fantasy sports has engulfed the fantasy sports world. It is a simple concept: go to the website, pick a league from the bunch, draft a team, get more fantasy points than the other team/teams, win cash, repeat. Fantasy sports have become a huge deal over the last decade. The concept started from rotisserie baseball, which was created by magazine editor Daniel Okrent in 1980. He and some fellow journalists started playing in a league and eventually wrote a book. Soon after, fantasy baseball led to fantasy football, basketball, hockey, auto racing, golf, and fantasy sports galore. This all grew substantially with the creation of the Internet. The most popular type of fantasy sports is football, with people having leagues with classmates, friends, coworkers, and even random people.
Fantasy football has become a cornerstone of football season. Many intense leagues have have huge cash winnings, trophies, bragging rights, punishments, and even wrestling belts for the winners. There was a seven-season television show about friends in a fantasy football league, known appropriately as The League. There are magazines and television shows devoted to helping people get an edge in their fantasy league.
People are starting to turn away from traditional leagues because more money can be won in daily fantasy leagues. Daily fantasy sports have many benefits over conventional fantasy sports. First of all, there is no full season commitment. There is no waiting for injured players to come back. A person can select a new team everyday. This is beneficial to some who cannot give full commitment to fantasy everyday. Another benefit is huge cash payouts. There are two main websites for daily fantasy sports, DraftKings & FanDuel, and they both give out huge cash winnings.
Daily fantasy has appeal to all sorts of people from both fantasy football and recreational gambling backgrounds. “I started playing fantasy football about 6 years ago, and I enjoy recreational gambling, as well,” says Language Arts teacher and daily fantasy sports participant, Glenn Fletcher. “I have traveled to Las Vegas, Biloxi, and gambled on cruise ships, which is legal once you get outside of US waters. A good benefit for me about playing in these types of fantasy leagues is that it can be as cheap as one dollar or as expensive as you want. Having the self-discipline to play in one or two dollar leagues keeps me from wrecking the home budget while having the pleasure of a little gambling fun.” added Fletcher “I play when I want with how much I want and I spend equal to or less than people who play the lottery.”
Such winnings have stirred controversy. In November 2015, daily fantasy sports became illegal in New York State, because it was ruled as gambling, which is against federal, state, and local laws. Traditional fantasy sports websites, such as ESPN and CBS Sports, are protected under the Unlawful Internet Gambling Enforcement Act (UIEGA) of 2006. UIEGA did not protect the legality of online poker. However, UIEGA does protect the rights to fantasy sports because they are defined as “skill based”. Mainstream fantasy sports websites do not cost money to join and most of the money earned by winners, are private pools accumulated through entry fees. DraftKings & FanDuel have only a few game modes that are privately-pooled. Currently, the Fantasy Sports Trade Association (FSTA) says that daily fantasy sports are protected under rules of the FSTA and the UIEGA. The real question now to find out if daily fantasy sports are legal is determining if they are skill based competitions.
While it is currently protected as legal by FTSA, it is not easy to justify daily fantasy websites, such as DraftKings & FanDuel, as legal. The UIEGA barely protects traditional fantasy sports as a whole because they are claimed to be “skill based,”which is mostly true. However, while fantasy sports do take some sort of skill of knowing the players and their previous statistics as well as the conditions of the games, one never knows how these athletes will perform until after the game is over. In traditional fantasy sports, one can just wait for next week with the same players on your team if you lose. In daily fantasy, the team will not go with a league participant all the way, which is similar to gambling.
For example, when high rollers in Las Vegas bet on a championship game, there only one game between two teams, with a 50% chance of winning. If before the season starts, they bet on a team to win it all with less money on the line than a championship game, there is much less of a chance that the high roller will win or lose — and all for less money. In daily fantasy, a person is giving up money in a day rather than in traditional fantasy, where the money given to join the league can be earned back before the season is over. Daily fantasy games also more luck based. Fantasy owners bet money on the assumption that a player who was drafted to their team will have a great game. Maybe the player could get injured in the first quarter or have bad game and then a participant’s team is probably not going to win. In traditional fantasy, at least, there is time for the player to heal in the coming weeks and money is less likely to be lost. Thus, in my opinion, these services should be considered online gambling.