May 19, 2017  Gambling and the Law®: Are Daily Fantasy Sports Legal? Technology is speeding up changes in the world of gaming. It took almost two centuries for poker to evolve from Straight Poker – five paper cards dealt face down with no draw – to Internet Hold ‘Em linking players using computers in different states and even on different continents. Jan 11, 2015  Bernal called it a 'complex parlay wager' and said daily fantasy sports share similar traits with online poker because the entry fees of many low- or middle-income 'fish' are pooled to feed the. Nov 11, 2015  So is daily fantasy gambling or not? Fantasy sports are legal — for now — because laws in most of the country has it defined as a skill game. 'It's a joke that between online poker.

Some 56 million fantasy sports players are plunking down money hoping to win big prizes based on the outcome of real world games.

Sure sounds like sports gambling, which happens to be illegal in every state except for Nevada.

But fantasy sports is perfectly legal.

The reason: a series of court decisions and a 63-word provision of federal law that classify fantasy sports as a game of skill.

For the most part, games of skill are allowed under federal law. Illegal gambling is considered to be a game of chance.

Fantasy sports works like this: Fans choose from real players in a draft or an online selection process to assemble a fantasy team. The players' real-game statistics are compiled and compared to see whose fantasy team has done the best.

The Unlawful Internet Gambling Enforcement Act of 2006 specifically mentions fantasy sports as something allowed under the law, as long as people are not betting on the outcome of a single game or the performance of a single player.

Because fantasy sports 'owners' must make decisions to pick multiple players for their teams, they are participating in a game of skill.

That legal status is unlikely to change.

Fantasy sports has grown into an estimated $1.5 billion industry. Many of the major media and Internet companies such as Disney's(DIS) ESPN unit, Yahoo(YHOO) and CBS(CBS) have become major players in the business.

Two standalone companies specializing in daily fantasy games -- DraftKings and FanDuel --have each raised about $300 million from investors.

Fantasy sports is illegal in five states -- Arizona, Iowa, Louisiana, Montana and Washington, according to the Fantasy Sports Trade Association. That trade group is pushing for legislation to change the law in those states.

On Monday, DraftKings and FanDuel announced they have banned employees from playing fantasy games after allegations surfaced that a DraftKings employee reportedly made $350,000 on FanDuel's football game when he had insider information about which players were being chosen by other fantasy team owners.

Right now there really is no government authority that oversees fantasy sports, the way gambling regulators oversee sports gambling in Nevada. The scandal involving DraftKings and FanDuel could bring calls for greater government oversight of the industry if not calls for an outright ban on the games.

Are you playing fantasy sports? How much are you putting up and what's your record? Email Ahiza Garcia and your story might be included in a CNNMoney article.

The NFL’s Roger Goodell, left, and NBA’s Adam Silver are just two pro sports commissioners in favor of allowing daily fantasy sports to continue. (Image: dailymail.co.uk)

Why Is Fantasy Sports Legal But Online Poker Isnt Real

Pro sports commissioners from the NBA, NFL, and MLB are all in agreement that playing daily fantasy sports (DFS) does not constitute gambling, but all also concur that the market is in serious need of regulation and oversight.

It’s a rather stark contrast from DraftKings CEO Jason Robins describing what his company offers as a “mashup between poker and fantasy sports” just three years ago. “The concept is almost identical to a casino,” Robins said at the time.

During three separate interviews with ESPN Radio’s Mike & Mike, MLB Commissioner Rob Manfred, NFL Commissioner Roger Goodell, and NBA Commissioner Adam Silver all expressed supportive views on the budding daily fantasy contests.

“Fantasy is not gambling, in my view,” Manfred said. Though Goodell is adamantly opposed to the legalization of traditional sports betting as he feels it could comprise the integrity of the game, he wholeheartedly welcomes DFS.

“We believe daily fantasy is different than that (sports betting) because it’s essentially a matchup of players,” Goodell stated. “There is not influence so that it can influence the outcome of a game.”

Regulation Needed

Poker advocates argue that if DFS doesn’t constitute gambling and is fundamentally skill-based, then so is the card game.

In both formats, the house acts only as a facilitator of the game, daily fantasy operators receiving entry fees while poker venues take rakes. And unlike the majority of other gambling ventures, in poker and DFS players try to outwit their opponents.

However, for reasons unbeknownst to poker enthusiasts, their game will linger in the gambling realm while DFS pushes to create a new betting but not gambling industry.

If there’s one thing most agree on, it’s that regardless of whether daily fantasy involves skill or luck, or perhaps a little of both, it’s that the market needs regulation.

“The biggest concern is the one that attracted the most publicity,” Manfred explained. “You want to make sure that the fantasy organizations have appropriate safeguards in place to ensure that things are fair.”

The NBA’s Adam Silver concurred by saying, “I think regulation is in order. People should know what percent of the pool of money is paid out in the same way you would at a track or at any other event where wagering is involved.”

New York Attorney Investigating

The big four sports leagues all have vested interests in permitting daily fantasy due to minority ownerships in DraftKings and FanDuel, which is why they are understandably campaigning for regulation over restriction.

New York Attorney General Eric Schneiderman is looking a bit deeper.

“These are totally unregulated gambling venues,” Schneiderman revealed on CBS October 8. “DraftKings and FanDuel have no public regulation, they are exempt from the Internet Gambling Act of 2006.”

Why Is Fantasy Sports Legal But Online Poker Isnt Good

The Fantasy Sports Trade Association is taking the first proactive measure, announcing the formation of the Fantasy Sports Control Agency this week to create a “strict, transparent and effective system of self-regulation.”

Schneiderman doesn’t believe self-regulation will suffice.

“At the end of the day we’re going to see government regulation. This is a big business that did not exist when the statute of Internet gambling was passed,” he concluded.

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