Fantasy Gambling
Fantasy Gambling Rating: 4,1/5 9911 votes
FanDuel is the premier destination for sports fans online. In 2009, FanDuel reimagined the concept of fantasy sports, giving fans the ability to play one-day fantasy sports for real cash prizes. And despite many imitators, there’s still no better place to play.
- While online sports betting and online casino gaming is definitely illegal all over the US, except in states that have legalized them, fantasy sports just do not fit into the “gambling” category as they are considered to be games of skill. But critics say that the exemption wasn’t meant for fantasy sports contests as they are played today.
- Jun 07, 2008 The Unlawful Internet Gambling Enforcement Act, which took effect at the beginning of last year, includes a specific exemption for fantasy sports, provided the prizes are determined in advance.
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.
Can daily fantasy football sites score financial touchdown?
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.
CNNMoney (New York) First published October 6, 2015: 10:02 AM ET
Fantasy sports is gaining popularity around the world – and it is now big business. Articles relating to the NRL and AFL SuperCoach competitions now appear weekly in the Daily Telegraph and the Herald Sun tabloids. Leading daily fantasy operators FanDuel and DraftKings spent more than US$200 million on TV commercials during the 2015 NFL season.
Fantasy sports come in all shapes and sizes. This ranges from typical formats – including fantasy football, baseball and basketball – to the more obscure fantasy bass fishing, movies (predicting box office successes), and Congress (based on achievements of members of the US Congress).
Fantasy sports began as a niche hobby for statistically inclined sports fanatics. But, with the internet, it has evolved into a multi-billion-dollar industry played by 16% of the US and Canadian population – or 57.4 million people in total.
How do fantasy sports work?
Participants select a virtual team of real-life players from a professional sporting code.
For example, an AFL SuperCoach team may include Sydney forward Lance Franklin, Collingwood midfielder Adam Treloar, and Carlton defender Sam Docherty in a squad of a given number of players, each with a price attached. Each team has a maximum “salary cap” to spend.
During each round of competition, players are awarded “fantasy points” based on their actual game performance statistics. The points may be, for instance, four for a tackle, three for a kick, or two for a handball. Participants are matched against others in their fantasy league, and winners are determined by the best-scoring combination of players per round.
What are daily fantasy sports?
Traditional fantasy leagues are conducted over an entire sporting season. They involve a small entry fee, or can be free to enter. But, in recent years, the format of fantasy sports has changed dramatically, with the emergence of a fast-paced variant: daily fantasy sports.
Daily fantasy sports is played over a single game or a round of competition. Participants pay an entry fee, and the top-performing participants win money from the prize pool once the operator has retained a small commission.
In the US, daily fantasy sports is a US$3.2 billion per-year industry. FanDuel and DraftKings have a combined market share of 95%.
Daily fantasy sports in Australia
Estimates suggest there are 1.65 million (traditional) fantasy sports participants in Australia. This suggests daily fantasy sports competitions are a natural fit to the Australian market.
Rax Huq and Ryan Fitzgerald launched Moneyball in February 2015, the first and largest daily fantasy sports platform in Australia. Since its inception, it has experienced between 50% and 70% year-over-year revenue growth.
Fantasy Football Gambling Sites
However, Moneyball is no longer the only game in town. Multiple new daily fantasy sports companies have launched similar platforms, including Draftstars (a joint venture between CrownBet, Fox Sports, and Seven West Media). Sports betting company TopBetta has also moved into the Australian market after signing an advertising deal with Fairfax Media to promote its fantasy tournaments.
Is it legal?
In the US, it is illegal to place online wagers on sporting events. However, an exemption for fantasy sports has allowed the daily fantasy sports industry to develop.
Daily fantasy sports’ legality rests on an assessment of whether its outcomes are determined mostly by chance (gambling, therefore illegal), or the individual skillset of participants (contests, therefore legal). The Fantasy Sports Trade Association has left no doubt as to its position, devoting an entire page of its website to attesting “why fantasy sports is not gambling”.
Fantasy Gambling Sites
It seems contradictory, however, that US law bans online poker – which includes a substantial skill element – but not daily fantasy sports.
Daily fantasy sports also constitutes gambling as it involves staking something of value on an event determined – in part – by chance in the hope of winning something of greater value.
But, as online sports wagering is regulated in Australia, the legal environment for daily fantasy sports operators here has been far less complex. Australian operators are licensed by the Northern Territory Racing Commission, and their operations are guided by the South Australian Responsible Gambling Code of Practice.
Potential for harm
As with traditional betting forms, excessive involvement in daily fantasy sports – spending more time and/or money on the activity than is personally affordable – will cause users problems that may also affect the people around them.
Early studies on this topic have found a link between fantasy sports involvement and gambling-related problems among US college students. Certain structural features of daily fantasy sports – like high bet frequency, short event duration, high maximum bet amount, and short payout intervals – multiply the potential for harm relative to the traditional fantasy format.
Daily fantasy sports websites also allow users to quickly populate the same team into multiple simultaneous contests. This theoretically allows them to spend thousands of dollars in a matter of seconds.
However, daily fantasy sports’ unique characteristics may serve as protective factors. The key motivations for participating in fantasy sports – fee and no fee – include socialising, entertainment and competition, rather than gambling to win money.
Fantasy Gambling League
Click here to find out more about a University of Sydney study and take part in our survey, if you bet on sports and/or play daily fantasy sports.