A Legal Fantasy: the rise of one-day fantasy sports leagues.

September 26, 2014

If you’ve watched televised sports or ESPN lately, you have no doubt noticed the incredible proliferation of commercials promoting “one day fantasy sports leagues.” They generally feature some supposedly average Joe who is now bicep-curling bags of cash hard won playing fantasy football. If you’re anything like me you have two thoughts every time you see these commercials. First, I came in second place in my fantasy league three years ago, why am I wasting my time in law school? Followed by, wait, I thought Internet sports gambling in the U.S. was illegal?
For those not familiar with fantasy football, it’s not a new concept. In fact the fantasy sports idea is older than most people realize, as ESPN documented. But, it was the Internet’s ability to collect, organize, and score player data in real time that made fantasy football the phenomenon it is today.
NFL fandom is the closest thing America has to feudal combat: men whose loyalties lie with the team battling for the pride of their birth-city, reverence for tradition and heroic myth, along with mascots, wearable regalia, and other meaningless pageantry. For decades these men and by extension the NFL fan base, were a relatively static demographic, fantasy sports was a game-changer and a boon for the NFL.
Fantasy football expanded the NFL’s reach beyond just those enamored with the feudal lore, beyond the dishwasher at the local restaurant with the New Orleans Saints tattoo on his calf, to include Grandma and the office receptionist too. Fantasy works because if there’s one thing human beings love, its masking games of chance as meritocratic competition. Like a casino with the screen above the roulette table displaying the results of previous spins—when we think that data about past independent events is always useful to predict the outcome of future events, we put our chips down.
True, fantasy football isn’t as nakedly a game of chance as roulette. But players consume the cottage industry of magazines, websites, and TV shows that have sprung up around fantasy, like the saps that think that because the roulette wheel landed on red the last four times, black is more likely to be next.
Wait, how is this legal?
I’ll admit that when I first saw these commercials, I assumed these were fly by night corporations probably incorporated on some sandbar in the Western Caribbean. My intuition was way off, these companies have the most plain language and simple “legal” pages I have ever seen on a website. Draft Kings actually titled their page “Why it is legal.” FanDuel’s legal explanation is clear and succinct:
Fantasy sports is considered a game of skill and received a specific exemption from the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA 2006). FanDuel uses exactly the same rules as any other season-long fantasy sports format, the only difference is that our games last only one day or one week.
Draft Kings emphasizes that “[t]he legality of daily fantasy sports is the same as that of season long fantasy sports.” There is some irony in highlighting that fantasy sports are “a game of skill” while simultaneously touting the short (one day or one week) nature of these particular “contests.”
Any casual player of fantasy sports probably recognizes that most “skill” involved in fantasy football comes from the ability to maneuver the months long slog that is a full 17 week season. It’s been my experience that the “skilled” player is the one who can combat the inevitable injuries on their roster by taking the time to research obscure back-up players available on the waiver wire, pick them up and start them in place of an injured player. That is, of course, assuming that listening to sports talk radio, reading blogs, and possessing an enough free time to vet the credentials of some random NFL team’s 4th string running back can be considered a “skill.”
When the timeline of a “season” is shortened to one day, research becomes less important, and it begins to look a lot more like chance than skill. It’s nearly the difference between playing 300 hands of poker and playing one. It’s a lot more about the cards you draw when betting on one hand of poker, versus the skill in how you play your cards in 300 hands.

 Peyton Manning’s ability to throw touchdown passes is a skill; my mother’s ability to accurately predict how many touchdowns he will throw seems a lot more like chance.

Our laws give blessing to numerous vices, ideally we tax them at a rate somewhat proportionate to the damage they cause society. Questions about morality, taxes, and the effectiveness of prohibition laws are sure to be wrestled with in this debate; CNN published a great Op-ed by attorney Danny Cevallos tackling some of these issues. The fact that I’ve already used two different gambling analogies to explain this concept is also probably indicative of something.
However, the one thing that is certain is that Internet sports betting laws need to be updated—whether that is newer more strictly tailored prohibition, or legalization and taxation. I don’t think its to speculative to wonder if statutory interpretation and thereby enforcement of these laws might be different if the same system employed by sites like Draft Kings and Fan Duel was instead being run from behind the counter of a seedy Patterson, New Jersey bar—instead of by some IT professionals in Manhattan.