Anyone who follows sports probably knows all about daily fantasy sports at this point. Gamblers have dabbled in it, casual players have tried it, and states are trying to legislate it.
Speaking of which, one of the biggest hold-ups with daily fantasy sports is that plenty of people see it as the same thing as gambling on sports. If betting is illegal in certain states, how is daily fantasy sports legal? It’s a fight that’s still going on in some locations, which has stunted the growth of the industry in general.
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What are Daily Fantasy Sports?
Daily fantasy sports (DFS) is a relatively new phenomenon in the United States. Unlike traditional season-long fantasy sports leagues, which have been around for decades, DFS allows participants to draft a new team each week or day (depending on the sport) and compete for prizes. While season-long fantasy sports are considered games of skill, daily fantasy sports have come under scrutiny by some who argue that it is a form of gambling. The randomness of a single game of action is nearly impossible to predict. Having the odds stacked against the individual player proves difficult.
So how is daily fantasy sports legal? The answer lies in two federal laws: the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 and the Professional and Amateur Sports Protection Act (PASPA) of 1992.
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The UIGEA prohibits financial institutions from processing transactions associated with online gambling. However, the law contains a specific exemption for fantasy sports games that meet certain criteria, including:
– The prizes are not determined by the number of participants or the amount of entry fees paid
– The outcome of the contest is not based on the performance of any single real-world athlete or team
It takes an entire team effort for individuals to have success in daily fantasy sports. If it’s a big player pool, the results are determined predominantly by skill rather than chance
As long as daily fantasy sports contests meet these criteria, they are legal under the UIGEA.
PASPA is a federal law that prohibits sports betting in all but four states: Nevada, Montana, Oregon, and Delaware. However, the law contains an exception for fantasy sports games that meet certain criteria, including:
– The prizes are not determined by the number of participants or the amount of entry fees paid
– The outcome of the contest is not based on the performance of any single real-world athlete or team
– The results are determined predominantly by skill rather than chance
As long as daily fantasy sports contests meet these criteria, they are legal under PASPA.
What States Ban Daily Fantasy Sports?
There are actually a few states that have banned daily fantasy sports games. These states are Arizona, Iowa, Louisiana, Montana, and Washington. While some other states have laws that make playing DFS games illegal, these five states have outright bans on the activity.
So, for those living in one of these five states, unfortunately, there is no way to take part in any daily fantasy sports games. However, there are still plenty of other ways to enjoy the world of fantasy sports. A person can always play traditional season-long leagues with friends or family members, or even join an online league with strangers. There’s also nothing stopping someone from traveling to a state with legalized daily fantasy sports and playing there. As long as a person is physically in a certain state, they can play there as much as they would like.
In the end, the bans on daily fantasy sports in some states shouldn’t stop people from enjoying the world of fantasy sports as a whole. There are still plenty of ways to get involved, even if playing DFS games specifically isn’t allowed for money.
What Does The Future of Fantasy Sports Look Like?
The future of daily fantasy sports looks promising. With more and more people playing the game, there is bound to be continued growth in the industry. This will likely lead to more innovation and new features being added to the games.
Additionally, as the player base grows, so too will the prize pools available in tournaments. This could make playing daily fantasy sports even more lucrative for those who are good at it. A lot of people get into playing contests because they want to win money. The competition is nice, but taking home that first big win matters.
There are enough companies behind daily fantasy sports pushing to see it go through and make significant money. When motivated by money, it’s usually very hard for companies to not find a way to keep them around. They continue lobbying to be included in other states without facing any ramifications.
How Daily Fantasy Sports Embraced Traditional Sports Gambling
After all the legal issues that Fandel, DraftKings, and other daily fantasy sports websites went through, there was a change in the overall perception of gambling concerning DFS. Sports decided to embrace gambling more and more, seeing it as a revenue stream that could help out in a lot of ways.
To stay competitive, both FanDuel and DraftKings started to offer actual sports betting in areas where it’s legal. Not all states have embraced it in the United States, and there are plenty of countries that have stayed away from sports gambling as well. For those who do allow it, customers will see a slightly different setup with these apps as soon as they log in.
It’s a crazy turn of events for these daily fantasy sports companies, as they now have sports embracing something that they tried to stay away from as much as possible. Since the stigma of gambling is fading away, they’re much more inclined to connect daily fantasy sports to it. Already having a built-in client base that signed up for daily fantasy sports helps tremendously.
Are Traditional Fantasy Sports Legal?
Traditional fantasy sports have been around for a long time, and no one has ever thought about the legality of them for the most part. Perhaps the biggest reason why is that most people just play in traditional fantasy sports contests with friends or family as a way to stay connected to the game.
There are stakes in quite a few fantasy leagues, but it’s not hundreds, thousands, or even millions of dollars in prize money in almost every case. Everyone contributing $20 or $50 and playing a season-long fantasy league is not going to attract someone with gambling tendencies trying to make a living this way.
Fantasy sports are still popular in some people’s minds, but others feel like it’s just too long to pay attention to the entire season. What ends up happening is the players forget to set the lineups or stay engaged in a fantasy league for months at a time. That gap in paying attention can hurt their roster and keep them from winning a title.
Daily fantasy sports fill that void of not only having more opportunities to win money, but cutting down on the length of fantasy sports. Only having to pay attention to set lineups one time is the preferred method by many. As daily fantasy sports opens up more and more, expect new players to try it out as a way to win big (and possibly make a living doing so).