Do Paid Fantasy Sports Leagues Violate Gambling Laws?

from the taking-the-fun-out dept

Perhaps online fantasy sports service providers have more to worry about than whether or not sports leagues can claim a copyright on player names and stats. Tech Law Advisor points to a new lawsuit filed by a lawyer who focuses on gambling laws. The lawyer claims that many paid online fantasy sports leagues violate state gambling laws. The actual filing is an interesting read (though it’s still not entirely clear why he’s filing this case) — especially since much of the case seems to hinge on whether or not fantasy sports are “games of chance.” This is the same argument that poker players have used to say that poker isn’t covered by gambling laws (something the current administration claims is untrue, and lawmakers are working on clarifying). However, many fantasy sports players would likely claim that it’s not a game of chance, but actually involves some element of skill, mixed with some element of luck. Just as in poker, you still need to play with the hand you’re dealt. However, page after page of the complaint focuses on showing why fantasy sports really are a game of chance, including the fact that the players’ and teams’ interests often aren’t aligned with the fantasy sports players’, and that players might get injured or suspended. Either way, we haven’t heard many stories of Gamblers’ Anonymous meetings being overloaded with fantasy sports addicts.

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Comments on “Do Paid Fantasy Sports Leagues Violate Gambling Laws?”

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Jeff (profile) says:

Re: Re: First online poker, now fantasy football

You’re outta yer tree. CANADA?!?! If I moved to Canada, I’d have to post everything I said in English and French. Talk about your harsh bilingual requirements!

Vous êtes l’arbre de yer de outta. LE CANADA ? !?! Si j’ai transféré au Canada, je devrais tout poster j’ai dit dans l’anglais et français. Parler de vos conditions bilingues dures !

Sanguine Dream says:

Next up someone will try to say that paying to enter a video game tournament that offers cash prizes (I’m looking you DDR players and fighting game players) is gambling.

But seriously I kinda have to agree with the notion that PAID fantasy sports are gambling. In poker you don’t just pick some cards and wait to see what happens. Even though you have no control over the hand you are deal you still have to play them correctly to win. Throw in bluffing and you have the chance of the person with the worst cards at the table winning the hand. In fantasy sports all you have to do is pick the right athletes then tune in to your source of sports news to see if you won.

And for the record: Lotteries, raffles, and drawings that you have to pay to enter = Legalized gambling.

Furnace says:

Re: Re:

Sanguine Dream you are way out of touch with reality. Have you ever played in a fantasy sports league? Obviously not as you have no clue what your talking about. I am very familar with both poker and fantasy sports. There is a big difference between posting a bet for each hand/game versus paying a fee for a service. I am not excusing leagues that charge hundreds or more dollars for participation because those are gambling, but most leagues are not this way. Most are free or have nominal fees for premium services.

The notion that you just pick players and sit back and watch the news to see if you won is asinine. Anyone who has done that has never won a fantasy league and probably will rarely win a game. A lot of fantasy players scout players and teams, change rosters, change starting lineups, and offer and except trades.

In some extreme ways (as mentioned earlier) fantasy sports can be considered gambling, but when money is involved poker is always gambling.

Brian says:

Re: Re:

Totally disagree with this guy that says that poker is not gambling because of skill with bluffing, playing cards right, etc.., but says fantasy football you just draft your players and hope for the best so it is gambling. Not hardly,lol. Not only is there much skill in drafting and picking players that you predict to be less likely to suffer injury by the way as part of skill of the draft, but you dont just stop there, ( lol ) as there is much more skill to add. You make the best trades and waiver pick ups thru out season to be the most competitive !!!

Matthew says:

Who the hell pays $499

…for a fantasy baseball team? THOSE people are some kind of sickos. HOWEVER, even when I did play a fantasy+ for $20 I wasn’t allowed the “prize” — a plastic trophy — because my state won’t allow such payouts. But this was valuable in regards to the extra bandwidth and live stat tracking provided. I cannot imagine anyone heavily profited.

This is exactly the sort of litigation that jams the courts up, preventing worthwhile agendas from being completed.

Allen says:

Too much time on our hands

We have porous borders where people and drugs can just come traipsing in, meth addiction ruining lives, gas prices skyrocketing, inadequate health care for millions, and this is what our government turns it’s collective eye to? This is worthy of even discussion much less litigation? I’m with Dylan, Canada doesn’t sound so bad sometimes…

Techie says:

How about.....

You dont like poker or fantasy sports because its”gambling” then don’t play!!!

Just like television, you don’t like what you see then don’t wacth it!!!

I’m tired of people like this lawyer trying to tell me what I can or cannot do….

It’s my money and if I want to go broke losing it all, that’s my choice!

I understand the government wanting to regulate it, hell it would be even a good source of tax revenue.

I have a friend that plays poker online for a living. Now he maybe one of the few who do, but he did claim all his winnings last year and paid in over 6K in taxes!

Anonymous Coward says:

I know of a certain individual who’s running a sports-related enterprise that’s somewhat of a “game of chance”. He’s actually gotten it cleared legally, however, with the assertion that it’s NOT a game of chance, but rather a game of skill. One could argue that fantasy leagues would fall under that umbrella as well. Though you can’t control what a player does on the field, you CAN control who you choose to play. At least in most jurisdictions, it seems, the lack of control is what defines gambling. That’s why those crappy carnival games that take in thousands of dollars are legal, but you’ll get locked up for raffling off your old boat in the neighborhood.

Aaron says:

“Point of fact, poker is gambling. Anyone that has ever played poker knows that the cards are what wins. Sure, there is skill involved, but you still can’t win without the cards.”

Then all real sports are gambling, too. Can NASCAR drivers affect what happens in front of them? No, there is an element of luck in everything….even business. Can grocery stores not sell milk, because somebody might get in an accident on the way to the store (luck is involved)?

A person has NO control over the outcome of a slot machine. It’s purely a game of chance. Equating that with fantasy sports, or even poker (there’s a reason the same players are on TV every week) is really, really stupid.

Anonymous Coward says:

Re: Re:

Elements of luck are one thing, but poker is another. You see the same people on TV day after day because thats who the networks want to be on TV. Name me a sport where average joes or movie stars can join in tournaments and win? I don’t see Hillary Duff beating Tiger Woods now, do you?

When is the last time a longtime pro won the World Series of Poker?

Course, what Poker has to do with Fantasy Sports, I don’t know.

Dan Harrington said on ESPN when asked about his chances of winning going into the final table (filled with WSOP first timers) “I have 13% of the chips, you say I am the best player at the table, so that raises my odds up to 17%.

Seems like gambling to me when the best vs. the worst only have a 4% advantage. Course, thats more than the house gets in games of chance.

Anonymous Coward says:


Furnace yes you are right I don’t play either but it looks like you didn’t get my full point and maybe I didnt explain it right so I’ll try again.

What I mean is that in poker you have no control over what cards you therefore a large part (but not all since you still have to properly play what you get) of the game is chance.

In fantasy sports you may scout, trade, and mix up your lineup but ultimately you control who you have on the “field” on game day. You have a lot more control over wheather or not you win the game or not. And by “pick players and sit back to wait for the news” thats just what you do. No matter how strategic you are about it thats just what you are doing.

To me the notion of chance is a big part of the definition of gambling. I just think there is more chance in poker than fantasy sports.

Now I see where I messed up my post. When I said paid fantasy sports I meant the ones in which you can win more than bragging rights Mondy morning at the water cooler, not the ones that just charge you to use their site, service, etc.

Robert Dudek says:

Anyone who thinks poker is a game of pure luck is off their tree. I’ve made a consistent living playing poker online and (more recently) in B&M poker rooms. Over 18 months, I’ve had 16 winning months and in the 2 losing months I was barely in the red.

Over many tens of thousands of hands, each player gets nearly the same amount of good and bad cards and the nearly the same amount of good and bad luck. The skill in the game is derived from the wagering strategies, not the cards.

As the old saying goes, over the short term poker is nearly 100% luck; over the long term it is (nearly) 100% skill.

I also participate in a baseball fantasy league and I can tell you that the best “owners” consistently win. They have superior knowledge and are able to overcome bad luck (i.e injuries or surprise trades out of the league) better than others. But there is no guarantee that the very best “owner” will win every year.

Both of these things are mixes of chance and skill, depending on the timeframe we are talking about.

Chess is a game of (more or less) pure skill; lotteries are pure chance. Most non-athletic games are in between.

kathy mathews says:

fantasy football

What about when professional football athletes play fantasy football? Is there a possibility that they will taint the the game eventually? And there are companies who now look at this as an addiction where time dedicated to Fantasy Football verses time they need to concentrate on work is counter productive to their own bottom line.

steve says:

fantasy sports

if fantasy sports are gambling than u can also consider almost everything in life gambling. in fantasy sports u draft a team an then watch them play. making lineup changes every week. playing the better players. also u can make trades and waivers to improve your team. how is that luck? Pay close attention and u will win. so if this is gambling than the nfl, mlb, nhl, and nba are also gambling on the players they draft every season for their teams. they dont know weather or not they will be injured or how the players will actually pan out. In business any company hires employees and they may lose the company money, so wouldnt that b e gambling also? So really if u want to be pickey everything in life could be considered gambling, right? Fantasy sports is not completely chance, and just like everything else in life people who have more money can afford to play for more in a skill game such as fantasy sports.

glenn (user link) says:

Do Paid Fantasy Sports Leagues Violate Gambling Laws?

The Unlawful Internet Gambling Enforcement of 2006 says
Fees for Fantasy Sports are NOT Bets or Wagers.
The Unlawful Internet Enforcement Act of 2006 passed in September included a carve-out for fantasy sports WITH an official definition of guidelines for prizes and rules.
If you do as the rules say you can charge for fantasy sports.
But be careful some states don’t allow fantasy sports.

Mike says:

Fantasy sports

The Unlawful Internet Gambling Enforcement Act of 2006, which was an amendment to the larger and unrelated Safe Port Act, included “carve out” language that clarified the legality of fantasy sports. It was signed into law on October. The bill specifically exempts fantasy sports games, educational games, or any online contest that “has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events, including any non-participant’s individual performances in such sporting events…”[38]

So Fantasy sports is not going any place. I have also found a new fantasy site that is easy to play and fun.

bobbyheart (user link) says:

Under the UIGEA of 2006 fantasy sports is not illegal. My brother and I have created a website called which is a fantasy sports betting website and we have done hours of research and have spoken to numerous lawyers about these laws and indeed it is not illegal nor is fantasy sports.

The way our website works is you sign up for free and get 10k of fantasy money each week. The object is to bet on sports with this fantasy money and accumulate as much fantasy money as possible. The person who is most profitable for each day, week, and grand prize period wins the REAL CASH PRIZE for that period.

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