A hearing on the fantasy sports case mounted by the\u00a0New York Attorney General Eric Schneiderman ended inconclusively.<\/p>\n
Daily\u00a0fantasy\u00a0sports sites FanDuel and DraftKings have always maintained that the services they offer\u00a0don\u2019t count as gambling because they\u2019re contests of skill. \u00a0Schneiderman defines daily\u00a0fantasy\u00a0sports as illegal\u00a0gambling\u00a0under New York state law, saying that \u201cwinning or losing depends on numerous elements of chance to a\u00a0\u2018material degree.\u2019\u201d If public officials in other states agree, it could be the end of the daily fantasy sports industry in the U.S.<\/p>\n
FanDuel and DraftKings have cited a 2006 federal law to distinguish themselves from\u00a0illegal gambling. But that law explicitly defers to state definitions of what counts as betting. In most cases, states determine the legal status of contests with cash prizes by examining\u00a0whether the\u00a0activity is based on skill (like playing in a bowling tournament) or chance (like pulling the arm on a slot machine). Many activities are\u00a0a mix\u00a0of both, of course, and states have different thresholds for how much chance is acceptable\u00a0before something becomes gambling. For\u00a0Schneiderman, season-long fantasy\u00a0sports\u00a0are tolerable in part\u00a0because\u00a0they involve long-term strategy over several months. Daily fantasy games can\u00a0turn\u00a0on a single play.<\/p>\n
New York\u2019s standard is in the middle\u00a0of the pack, according to Daniel Wallach,\u00a0a sports and gaming attorney with the firm Becker & Poliakoff. Wallach says about 10 states have said games involving any amount of chance count as gambling, while about 20 states say chance must be the \u201cpredominant factor\u201d in the outcome.<\/p>\n
While the legality of daily fantasy sports turns on the skill-vs.-chance question, the cases made by both\u00a0advocates and critics have a fundamental contradiction. At the same time Schneiderman argues that participating in daily\u00a0fantasy\u00a0sports resembles playing the lottery, he complains that a small number of top players win almost all the time. He even compares the games to poker,\u00a0which\u00a0many academics see as heavily\u00a0skill-based. Considering\u00a0that Schneiderman\u2019s letter doesn\u2019t\u00a0weigh in\u00a0on allegations of cheating, it stands to reason\u00a0that some players win all the time because they\u2019re just better than everyone else.<\/p>\n
FanDuel\u00a0and\u00a0DraftKings, on the other hand, describe daily fantasy as a\u00a0skill-based\u00a0activity when discussing legal matters. But they push back against the idea that the success of elite\u00a0players\u00a0makes it less likely for less-savvy\u00a0users to win.<\/p>\n
Schneiderman raises concerns\u00a0that\u00a0daily fantasy\u00a0sports\u00a0will lead to the same kinds of public-health and\u00a0economic\u00a0problems that illegal gambling has caused. Potential problem gamblers are likely to be lured by\u00a0\u201cthe quick\u00a0rate of play, the large jackpots, and the false perception that it is eminently winnable,\u201d Schneiderman\u00a0wrote.\u00a0\u201cUltimately, it is these types of harms that our\u00a0Constitution\u00a0and gambling laws were intended to prevent in New York.\u201d<\/p>\n
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A hearing on the fantasy sports case mounted by the\u00a0New York Attorney General Eric Schneiderman ended inconclusively. Daily\u00a0fantasy\u00a0sports sites FanDuel and DraftKings have always maintained that the services they offer\u00a0don\u2019t count as gambling because they\u2019re contests of skill. \u00a0Schneiderman defines … Continue reading