81
IS DAILY FANTASY A FORM OF
GAMBLING HIDDEN BY SKILL?
Joshua Taggart
I. INTRODUCTION
Championship Sunday, December 21, 2014. Reid has not slept
due to researching the perfect lineup for his fantasy football team.
His preparation listening to podcasts, mock drafts, tanking the
previous season and trading for higher draft picks, along with a
strong draft and the right pick-ups on the waiver wire have led him
to the opportunity of owning the “Brophy”, $200, and bragging
rights over his nine best friends. Across the street, Reid’s neighbor,
Charles is preparing for another Sunday of daily fantasy. With little
effort, Charles puts together the exact team Reid has been building
for years. Charles, simply logs on to the computer and chooses the
players he believes will perform the best on that particular day.
Throughout the day, Reid refreshes the score on his phone; after
the day games concluded Reid was up a point over his opponent.
Reid still had Andrew Luck to play and his opponent had no other
players left. Reid knew from previous experiences that negative
points are always a possibility, and though the temptation of
running the score up on his opponent would have made the
championship gratifying, his managerial skills told him to remove
Andrew Luck and take the win. Andrew Luck ended up scoring
negative two fantasy points. Unlike Reid, Charles lost his daily
fantasy league even though he had the exact same team as Reid.
Charles was playing against 10,000 fantasy players with each one
having a different lineup of players. This created a game of “chance”
that Charles couldn’t overcome with managerial skills.
This story contrasts the typical weekend of a traditional
fantasy player and a daily fantasy player.
1
Fantasy sports is a way
1
Daily fantasy is similar to how traditional fantasy sports games are played.
Players compete one or multiple players by assembling a team of professional athletes,
and earn points based on the actual statistical performance of the athlete. The difference
is daily fantasy sports are an accelerated format of traditional fantasy sports, which take
82 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
for Americans to be involved in a game more than just rooting for
their favorite team. Fantasy leagues allow sports fans to be the
owners and general managers of their dream team. Today, it is
estimated that around 56.8 million people play fantasy sports in
America and Canada, which includes 37.9 million males and 18.9
million females.
2
The Fantasy Sports industry [was estimated to]
generate 2.6 billion dollars in entry fees in 2015 through sites like
Draft Kings and Fan Duel.
3
The days of Reid searching the web for tips or listening to a
fantasy podcast to find that fantasy “sleeper” to save his season is
becoming a thing of the past.
4
Weekly fantasy is now available at
the click of a mouse, and the ability to win money daily or weekly is
appealing to fantasy players. Reid no longer has to stress about
“waiver pickups,”
5
“bye weeks,”
6
or a torn ACL to his star running
back. Weekly leagues allow Reid the ability to pick any athlete and
compete for the most points for one particular week.
Does this accelerated format of daily fantasy remove the skill
factor that traditional fantasy seasons contain and create a higher
level of chance? A deeper analysis needs to be made to answer the
question if daily fantasy sports are removing aspects of skill
place over a week or single day of competition, as opposed to an entire season. Louis
Bien, Everything you ever wanted to know about daily fantasy sports and why they’re
getting sued, http://www.sbnation.com/2015/11/24/9791608/draftkings-fanduel-daily-
fantasy-sports-lawsuit-new-york-internet-gambling (last visited December 1, 2016).
2
Industry Demographics, Fantasy Sports Trade Association,
http://www.fsta.org/research/industry-demographics/ (last visited December 21, 2016).
3
Darren Heitner, The Hyper Growth Of Daily Fantasy Sports Is Going To Change
Our Culture And Our Laws, Forbes,
http://www.forbes.com/sites/darrenheitner/2015/09/16/the-hyper-growth-of-daily-
fantasy-sports-is-going-to-change-our-culture-and-our-laws/#2d86df4c5f25 (last visited
December 21, 2016).
4
The term “sleeper” is typically a late-round pick or waiver-wire selection that
exceeds statistical expectations and becomes a prominent option in fantasy leagues.
Fantasy Football Glossary, NFL Fantasy,
http://www.nfl.com/fantasyfootball/help/fantasyglossary (last visited December 18,
2016).
5
Waiver wire means: “ the list of free-agent players within a fantasy league. Most
free agents are subject to a waiver process, as a player is placed on waivers after the
kickoff of the first game of the week or during a designated period (24 hours) after being
released from a team. Waivers help to ensure that all teams have the opportunity to
claim the best free agents, resulting in more balanced, competitive leagues.” Id.
6
A bye week is when a team gets an off week from having to play a game. Id.
Fall 2016] Daily Fantasy A Form Of Gambling? 83
required in season long fantasy football and moving closer to sports
betting.
This article reviews how daily fantasy is able to hide a game
of chance behind the illusion of skill. The only federal law that
explicitly protects fantasy sports is the UIGEA, however, there is
debate as to whether this would extend to daily fantasy. First, the
paper will investigate the role of the federal government in
gambling and how states differ in determining a game as gambling.
Second, an analysis will be made on how daily fantasy could be
hiding behind the skill of traditional fantasy sports. Lastly, a
conclusion will be determined on the legality of daily fantasy sports.
II. THE FEDERAL GOVERNMENTS AND STATES ROLE IN
GAMBLING
“Gambling is primarily a matter of state law, reinforced by
federal law in instances where the presence of an interstate or
foreign element might otherwise frustrate the enforcement
policies of state law.”
7
A. Federal Government’s Role in Gambling
The federal government has passed many laws serving to
reinforce State laws regulating gambling.
8
Four federal statutes
impact Internet gambling: (1) Illegal Gambling Business Act, (2)
the Wire Act, (3) the Travel Act, and (4) the Unlawful Internet
Gambling Enforcement Act.
9
Though some of the following laws do not specifically address
fantasy sports, they play a role in understanding how the courts,
States, and Congress can work together in clarifying the legality of
daily fantasy.
7
Charles Doyle, Cong. Research Serv., 97-619, Internet Gambling: An
Overview of Federal Criminal Law (2012).
8
Id. at 1.
9
Id. at 8, note 56.
84 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
The Illegal Gambling Business Act (IGBA),
10
The Wire Act
11
and The Travel Act
12
did not address Internet gambling explicitly
but could be used to prosecute daily fantasy.
13
The Unlawful Internet Gambling Enforcement Act (UIGEA)
differs from the other three Acts mentioned above by explicitly
banning Internet gambling and related activity.
14
The UIGEA
forbids any person from engaging in a gambling business to accept
payments related to unlawful Internet gambling.
15
Congress’s
intent of passing the UIGEA was to prevent Internet gaming in the
United States.
16
However, the UIGEA carved out an exception for
fantasy sports.
17
The UIGEA creates the first exemption for fantasy sports in a
federal anti-gambling statute.
18
Although Congress passed this
exemption, daily fantasy was nonexistent when the UIGEA was
passed.
19
Former Rep. Jim Leach, a drafter of UIGEA, said,
“lawmakers, had no idea daily fantasy would ‘morph into today’s
caldron of daily betting.’”
20
Rep. Leach further argued that the
UIGEA does not provide daily fantasy sites with immunity against
other federal and state laws that limit daily fantasy activities.
21
Daily fantasy sites probably are safe from prosecution under the
UIGEA even though the exemption is tailored more for traditional
fantasy sports. However, daily fantasy sites should be cautious
10
18 U.S.C. § 1955 (2012).
11
18 U.S.C. § 1084 (2012).
12
18 U.S.C. § 1952 (2012).
13
For more detail on how these acts could be used to prosecute fantasy sports see,
Anthony N. Cabot & Louis V. Csoka, Fantasy Sports: One Form of Mainstream Wagering
in the United States, 40 J. Marshall L. Rev. 1195, 1199 (2007).
14
See Doyle, supra note 7, at 16.
15
31 U.S.C. 5363 (2012).
16
H.R. 4411, 109
th
Cong. (2006).
17
See Doyle, supra note 7, at 18 n. 124.
18
Jon Boswell, Fantasy Sports: A Game of Skill That Is Implicitly Legal Under State
Law, and Now Explicitly Legal Under Federal Law, 25 Cardozo Arts & Ent. L.J. 1257
(2008).
19
The evolution of the daily fantasy sports industry, Roto Grinders,
https://rotogrinders.com/static/daily-fantasy-sports-timeline (last visited December 20,
2016).
20
Tim Dahlberg, Former congressman says DFS is “cauldron of daily betting,
Associated Press,
http://bigstory.ap.org/article/7b3af0d8b0c04f059e8b301adf8b1784/former-congressman-
says-dfs-cauldron-daily-betting (last visited January 19, 2017).
21
Id.
Fall 2016] Daily Fantasy A Form Of Gambling? 85
about believing the UIGEA provides total protection.
22
After all,
this is “merely exempting fantasy from one specific law enforcement
mechanism, but not from the broad sweep of law itself.”
23
B. The role of the State in gambling
The States are in almost total agreement in defining gambling
as a game involving the three elements of (1) chance, (2) prize, and
(3) consideration.
24
However, the major problem with deciding if
daily fantasy is considered a form of gambling is the diversity in
how States write their anti-gambling statutes.
A state like New York defines gambling simply by:
A person engages in gambling when he stakes or risks
something of value upon the outcome of a contest of chance or
a future contingent event not under his control or influence,
upon an agreement or understanding that he will receive
something of value in the event of a certain outcome.
25
In comparison, Mississippi bans all betting on games (other
than dog fights).
2627
Mississippi then inserts specific carve-outs and
specific information.
28
Mississippi’s main definition of betting,
gaming or wagering is:
If any person shall encourage, promote or play at any game,
play or amusement, other than a fight or fighting match
between dogs, for money or other valuable thing, or shall wager
or bet, promote or encourage the wagering or betting of any
money or other valuable things, upon any game, play,
amusement…
29
22
Ira Boudway, How will the Government Change the Game for Daily Sports?,
Bloomberg Business, http://www.bloomberg.com/news/articles/2015-10-15/how-will-the-
government-change-the-game-for-daily-fantasy-sports- (last visited December 20, 2016).
23
See Dahlberg, supra note 37.
24
R.M. Weddle, Promotional Schemes of Retail Stores as Criminal Offenses Under
Anti-Gambling Laws, 29 A.L.R.3d 888 (1968).
25
N.Y. Penal Law § 225.00 (2007).
26
Miss. Code Ann. § 97-33-1 (1972).
27
Mississippi provides a separate statute that provides harsher penalties for betting
on dog fights. See Miss. Code Ann. § 97-41-19 (1972).
28
Id.
29
Id.
86 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
The best approach to determine daily fantasy’s legality is to
decide how an individual State defines daily fantasy, which will
create options of prosecution on the federal level.
30
Daily fantasy
went through a defining moment in the year 2016. New York’s state
Attorney General Eric Schneiderman decided to rule daily fantasy
as illegal online gaming.
31
However, Governor Andrew Coumo five
months later signed legislation that made daily fantasy a “game of
skill.”
32
This legislation has allowed residences of New York to
legally play daily fantasy and for the state to regulate the daily
fantasy sites.
33
Other states, however, are not as kind to daily
fantasy and some have banned daily fantasy entirely.
34
FanDuel
and DraftKings announce in the “terms of use” that a resident of
Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Louisiana,
Montana, Nevada, Texas, and Washington is eligible to create an
account, but not eligible to play in games that offer prizes.
35
Not
only does this suggest that State law decides the legality of daily
fantasy, but daily fantasy sites are beginning to take notice that
their “games of skill” may also be a game of chance.
States test for gambling in different ways, which could provide
daily fantasy different classifications in each state. The test used
by a majority of States is the “Predominant Purpose Test.”
36
This
test simply determines if the outcome of the game is determined
more by the player’s skill or overwhelming chance.
37
This creates complications when trying to analyze if daily
fantasy is a game of chance or skill. For example, chess has been
30
See Doyle, supra at note 8.
31
Brent Schrontenboer, New York Legalizes Daily Fantasy USA TODAY (2016),
Brent Sports - http://www.usatoday.com/story/sports/2016/08/03/daily-fantasy-sports-
fanduel-draftkings-legal-new-york/88039822/ (last visited January 18, 2017).
32
Id.
33
Id.
34
Scholarly research indicates that there are nine states that consider daily fantasy
illegal or banned; sixteen states have laws or reviews being considered; and twenty-three
states consider daily fantasy legal. Jason Breslow, Is It Gambling? How States View
Daily Fantasy Sports, Frontline, http://www.pbs.org/wgbh/frontline/article/is-it-
gambling-how-states-view-daily-fantasy-sports/ (last visited January 15, 2017).
35
Terms of Use, Draftkings, https://www.draftkings.com/help/terms (last visited
January 20, 2016); Terms of Use, FanDuel, https://www.fanduel.com/terms (last visited
January 20, 2017).
36
Boswell, supra note 19, at 1264.
37
Id.
Fall 2016] Daily Fantasy A Form Of Gambling? 87
determined to be a game of complete skill.
38
However, courts
disagree on games like black gammon and poker being
predominantly skill or chance.
39
Further, courts consider betting on
sports a game of chance.
40
Daily fantasy complicates the
predominant factor test by being a subject of sports but adding
components of choosing players and making moves like chess.
Some states have narrow anti-gaming laws prohibiting games
that have a tremendous amount of skill.
41
The “Any Chance Test”
approach prevents games that include any form of chance from
being bet or wagered on.
42
Considering there is some form of chance
in daily fantasy and traditional fantasy, both could be banned from
being wagered on in a state that applies the “Any Chance Test.”
Other states apply the “Material Element Test”, which can
find a game as chance even if 51% or more of the game has an
element of skill.
43
States that apply the “material element test”
could find daily fantasy illegal if the court subjectively finds one
material element of chance. However, the Material Element Test
most likely would be considered second-rate to other tests because
it relies on subjective analysis with no real benchmarks in
determining what is a material element in fantasy sports.
44
38
Id. at 1204 n. 59.
39
Id. at 1204 n. 61. “See, e.g., Charnes v. Cent. City Opera House Ass’n., 773 P.2d
546, 551 (Colo. 1989) (holding that, in Colorado, poker is an illegal gambling game of
chance); see also Colo. Op. Att’y Gen. No. 93-5 (Apr. 21, 1993) (opining that, in Colorado,
poker is a game of skill, but, nevertheless, illegal under specific statutory
language); United States v. Marder, 48 F.3d 564, 569 (1st Cir. 1995) (holding that, in
Massachusetts, video poker is a lottery in which chance predominates). But
see Commonwealth v. Club Caravan, Inc., 571 N.E.2d 405, 406-7 (Mass. App. Ct.
1991) (holding that, in Massachusetts, video poker games are games of skill).”
40
Emanuel V. Towfigh, Article: Dangerous Games: The Psychological Case For
Regulating Gambling, 8 Charleston L. Rev. 147, 163 (2013).
41
Kaitlyn Dunphy, Following Suit with the Second Circuit: Defining Gambling in
the Illegal Gambling Business Act, 79 Brooklyn L. Rev. 1295 (2014).
42
Id.
43
See United States v. DiCristina, 726 F.3d 92, 98 (2d Cir. 2013) (defining a game of
chance “under New York Law as ‘any contest, game, gaming scheme or gaming device in
which the outcome depends in a material degree upon an element of chance,
notwithstanding that skill of contestants may be a factor therein’”); See also, Thole v.
Westfall, 682 S.W.2d 33, 37 n.8 (Mo. Ct. App. 1984) (explaining “chance must be a
material element in determining the outcome of a gambling game. It need not be
the dominant element”).
44
Jeffrey C. Meehan, The Predominate Goliath: Why Pay-to-Play Daily Fantasy
Sports are Games of Skill Under the Dominant Factor Test, 26 Marq. Sports L. Rev. 5
(2015).
88 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
Montana’s approach to dealing with fantasy sports seems to be
a Statute that States could look to for guidance. Montana allows
fantasy leagues that do not place wagers by telephone or the
Internet.
45
The statute allows friends and families to play
traditional fantasy leagues but bans daily fantasy from taking
place.
46
Further, Montana allows for traditional leagues to play for
money because they are not placing bets on the Internet or
telephone.
47
These traditional leagues would also be able to play
NFL and ESPN fantasy apps because they are not placing their
wagers by telephone or the Internet. Traditional leagues usually
pay money directly to a league manager voted on by the league that
will hold on to the money until the end of the season. Daily fantasy
sites seem to take Montana’s law seriously because Montana
residents are banned from participating in pay to play fantasy
games on daily fantasy sites.
48
One important note is Montana’s
lottery does have a weekly fantasy league that can be accessed from
specific taverns, which raises money for the struggling horse racing
market in Montana.
49
III. IS DAILY FANTASY HIDING GAMBLING BEHIND SKILL?
The main focus of this section will be towards the States that
have not explicitly blocked daily fantasy sports. The main issue is
that States, Congress, and courts need to come to a conclusion about
the legality of daily fantasy. The reason this conclusion needs to be
made is that FanDuel and DraftKings continue to contend their
games are skill rather than illegal games of chance.
50
First, to decide if daily fantasy is gambling one must
determine what courts look for in deciding if a game is “skill” or
“chance.” The character of the game determines the chance or skill
45
Mont. Code Ann. § 23-5-802 (2011).
46
Id.
47
Id.
48
Terms of Use, supra note 49.
49
Fantasy Football, Montana Lottery,
http://www.montanalottery.com/FantasyFootball (last visited January 19, 2017).
50
Erik Matuszewski, Fantasy Sports Luring Wall Street in Its Fastest-Growing
Sector, Bloomberg Businessweek, http://www.businessweek.com/news/2014-01-
05/fantasy-sports-luring-wall-street-in-its-fastest-growing-sector (last visited January
18, 2017).
Fall 2016] Daily Fantasy A Form Of Gambling? 89
element not the skill of the player.
51
This means that for skill to
predominate chance it is measured by the average skill of a
majority of players likely to play the game, not by standards of
experts or a limited class of people.
52
The best way to determine if daily fantasy is a game of skill is
to compare and contrast it between traditional fantasy sports. Daily
Fantasy seems to be the target in most states, not traditional
fantasy, which makes traditional fantasy a benchmark for States to
look at when determining the legality of daily fantasy.
53
A. Traditional Fantasy vs. Daily Fantasy
Daily fantasy players use the same argument as traditional
fantasy players; that they take in an abundance of variables when
choosing a fantasy lineup. A lobbyist for the Fantasy Sports Trade
Association even made the argument in front of the New Jersey
committee that daily fantasy is more skilled based than traditional
fantasy.
54
The lobbyist argued that because more information must
be gathered in a shorter time to create a team that this creates a
higher level of skill.
55
Further, the argument was made that season-
long fantasy is chess and daily fantasy is speed chess.
56
However, traditional fantasy leagues are set up completely
different than daily fantasy leagues. The debate of daily fantasy
being like traditional fantasy comes from four distinct differences:
51
38 Am Jur 2d Gambling § 4 (2nd 2015).
52
Id.
53
Attorney General Eric T. Schneiderman sent a cease and desist letter to FanDuel
and Draft Kings describing traditional fantasy’s legality since 1980. Schneiderman:
Daily Fantasy Sports is Neither Victimless or Harmless, New York State Attorney
General, http://www.ag.ny.gov/press-release/ag-schneiderman-issues-cease-and-desist-
letters-fanduel-and-draftkings-demanding (last visited November 19, 2016). Texas
Attorney General Ken Paxton position is that traditional fantasy sports are legal under
Texas state law. Darren Heitner, Texas Attorney General Says Daily Fantasy Sports Is
Prohibited Gambling, Forbes,
http://www.forbes.com/sites/darrenheitner/2016/01/19/texas-attorney-general-says-
daily-fantasy-sports-is-prohibited-gambling/#7786b503107a (last visited December 20,
2016).
54
FSTA Lobbyist: Season Long Fantasy Involves Less Skill Than DFS, Legal Sports
Report, http://www.legalsportsreport.com/6014/less-skill-in-seasonlong-fantasy/ (last
visited December 27, 2016).
55
Id.
56
Id.
90 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
(1) the duration of the contest, (2) type of competition, (3) how
players are selected and (4) prizes.
1. Duration of the Contest
The main subject of every debate involving daily fantasy
begins with the length of the game.
57
Traditional fantasy is usually
set up between ten or twelve players each owning a team made up
of drafted professional athletes.
58
Throughout the season, teams are
matched up in a head-to-head scenario in a rotating schedule.
59
The
teams with the top records will then match up accordingly in a
playoff-style format.
60
Daily fantasy differs from traditional fantasy by allowing a
player to draft a new team each day.
61
This allows the player the
opportunity to play when he wants instead of a grueling week-to-
week management of players.
62
Daily fantasy still has the same
goal as season long fantasy, which is to accumulate the highest
point total for the day or week.
63
The difference is once the day or
week is completed so is the player’s team.
There seem to be consensuses that fantasy sports leagues
lasting the length of a season involve skill and knowledge.
64
However, no court has directly addressed daily fantasy’s much
shorter duration as meeting the same test.
65
Langone v. Kaiser &
FanDuel was a case brought to challenge the legality of daily
fantasy and many had hoped this would bring a broad legal
57
Cabot & Csoka, supra note 14, at 1211.
58
Jim McCormick, So you want to play fantasy football?, ESPN,
http://espn.go.com/fantasy/football/ffl/story?page=nfldk2k10howtoplay (last visited
December 14, 2016).
59
Id.
60
Id.
61
Stephen Perez, Daily Fantasy Strategy: How to play 50/50, H2H, GPP contests,
Sporting News, http://www.sportingnews.com/fantasy-nba-news/4635471-daily-fantasy-
sports-dfs-strategy-how-to-play-5050-h2h-gpp-win-cash-prizes-one-day-draft-kings-tips
(last visited December 19, 2016).
62
Id.
63
Id.
64
Lawsuit Has the Potential to Provide a Landmark Ruling for Fantasy Sports,
Klein, Moynhin, and Turco,
http://www.kleinmoynihan.com/lawsuit-has-the-potential-to-provide-a-landmark-
ruling-for-fantasy-sports/ (last visited December 19, 2016).
65
Id.
Fall 2016] Daily Fantasy A Form Of Gambling? 91
standard impacting the legality of daily fantasy.
66
Unfortunately,
the case was dismissed under Federal Rule of Civil Procedure
12(b)(6) because the plaintiff failed to make a specific claim.
67
One way of proving that daily fantasy is more chance based
than traditional fantasy is by using “law of large numbers”
theorem.
68
The theory sets out that as, “number of trials of process
increases, the percentage difference between the expected and
actual values goes to zero.”
69
Simply, a player of skill will unlikely
have a decided advantage if there is a small number of games being
played that are a high percentage of chance. For example, a
traditional skilled fantasy player can overcome injuries to an
athlete because he has the ability to use skill and knowledge to win
games later in the season.
70
However, daily fantasy players do not
have the same opportunity to use their skill or knowledge due to
the short duration of the game.
71
The contrast of traditional and daily fantasy is similar to day
trading and investing. Day traders use some amount of skill, but
similarly to daily fantasy players, daily traders must analyze the
market for one day.
72
This is different than investing, which
requires an investor to use his skill to analyze the future market.
73
Further, investors are able to use their skill to sell and trade stocks
to create financial gains if an investment begins to perform poorly.
74
The duration of daily fantasy seems to remove enough skill to align
closer to a game of chance.
2. Type of Competition
Comparing the various competitions of traditional fantasy and
daily fantasy is another way to differentiate the amount of skill.
66
Id.
67
Langone, supra note 31.
68
See Anthony N. Cabot, Glenn J. Light & Karl F. Rutledge, Alex Rodriquez, A
Monkey, and the Game of
Scrabble: The Hazard of Using Illogic to Define the Legality of Games of Mixed Skill an
d Chance, 57 Drake L.Rev. 383, 408 (2008)
69
Id.
70
Cabot & Csoka, supra note14, at 1210.
71
Id.
72
Michael A. Tselnik, Note: Check, Raise, or Fold: Poker and the Unlawful Internet
Gambling Enforcement Act, 35 Hofstra L. Rev. 1617, 1654 (2007).
73
Id. at 1655.
74
Id.
92 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
The three most common traditional leagues are (1) the re-draft
league (2) keeper leagues, and (3) dynasty leagues.
75
Traditional
fantasy leagues have a better argument for being a game of skill
due to the strategy involved with each league.
76
Re-draft leagues start with a new team each season.
77
Though
re-draft leagues are similar to daily fantasy the factors that have to
be considered in a re-draft league are different.
78
Keeper leagues
and dynasty leagues allow for the fantasy player to keep players or
a whole team for years. These three leagues add more skill than
daily fantasy by evaluating players that can contribute to a player’s
fantasy team for seventeen games or multiple years.
79
One bad
move can seriously hurt a player’s team for a season or years, unlike
a daily league where you get a whole new team of players the next
day.
80
Skilled traditional fantasy players start their season as soon
as the previous season ends. Transactions never stop taking place
in the real sports world, which directly affects fantasy sports. One
example is a running back becoming part of a pass first offense
versus a run first offense could affect his stats.
81
Other variables
affecting a player’s stats could be the offensive line the team has,
coaching, free agents, and even the type of grass the team will play
in eight games out of the year. There is also a skill factor of knowing
how to evaluate a player in order to know when to play, bench,
75
Alex Welch, Fantasy football 101: Different types of leagues, SB Nation,
http://www.sbnation.com/fantasy/2013/8/19/4618590/fantasy-football-101-standard-ppr-
keeper-leagues-rules (last visited December 21, 2016).
76
Michael Trippiedi, Daily Fantasy Sports Leagues: Do You Have the Skill to Win at
These Games of Chance?, 5 UNLV Gaming L.J. 201, 208 (2014).
77
Id.
78
Edelman, Marc, Navigating the Legal Risks of Daily Fantasy Sports: A Detailed
Primer in Federal and State Gambling Law, 2016 U. Ill. L. Rev. 117 (2016).
79
How To Play Fantasy Football Traditional Season Long Leagues, Fantasy
Footballers,
https://fantasyfootballers.org/how-to-play-fantasy-football/traditional-season-long-
leagues/#League_Types (last visited December 18, 2016).
80
One example from a real life experience is the legal troubles Adrian Peterson
experienced in 2014 affected traditional fantasy teams including my own after deciding
to give up my first round draft pick for the opportunity to keep Adrian Peterson. This
drastically crippled my team to start the season, but I was able to trade and pickup
players to compete in the championship game.
81
Michael Turner faces diminished role, Associated Press,
http://espn.go.com/nfl/trainingcamp12/story/_/id/8297078/atlanta-falcons-pass-first-
offense-limit-michael-turner-carries (last visited December 21, 2016).
Fall 2016] Daily Fantasy A Form Of Gambling? 93
release, or trade a player. A fantasy player’s job is comparable to a
general manager of a sports team.
82
In comparison, daily players
only have to pick a team for that particular day, which means the
totality of the components involved in traditional fantasy is not
present in daily fantasy.
83
Daily Fantasy type games are much different than traditional
fantasy. The three type of games are: (1) Head-to-Head, (2) 50/50s
or double ups, and (3) Guaranteed Prize pools.
84
The head-to-head
matchup is similar to season long fantasy where a player is
matched up against one other player.
85
50/50’s contains a large
group of people playing in a league for the day and if a player’s team
is above the 50
th
percentile that person wins a prize.
86
Guaranteed
Prize Pools (GPP) pay out large amounts of prizes to the top ten
percent players.
87
There is major disagreement considering daily fantasy games
as skill. A lawyer for Fantasy Sports Trade Association made the
argument in front of New Jersey Assembly Committee that skill is
even more important to the outcome of daily fantasy than season
long contests.
88
Further, in People vs. FanDuel, Inc., an affidavit by
an MIT Professor laid out three key points as to why daily fantasy
is based on skill: (1) what the player does have a direct effect on the
contest, (2) skilled well-informed players are more likely to do
better than non-skilled players within a set period of games, and (3)
a player can get better the more he plays.
89
82
Id.
83
Schneidermann, supra note 52.
84
Steve Buzzard, Analyzing the Different Types of Games in Daily Fantasy Sports,
Football Guys,
http://subscribers.footballguys.com/apps/article.php?article=14Buzzard_DFS_Game_Ty
pes (last visited December 20, 2016).
85
Id.
86
Stephen Perez, Daily Fantasy Strategy: How to play 50/50, H2H, GPP contests,
Sporting News, http://www.sportingnews.com/fantasy-news/4635471-daily-fantasy-
sports-dfs-strategy-how-to-play-5050-h2h-gpp-win-cash-prizes-one-day-draft-kings-tips
(last visited December 12, 2016).
87
Id.
88
Dustin Gouker, FSTA Lobbyist Tells Lawmakers: Season Long Fantasy Involves
Less Skill Than Daily Fantasy Sports, Legal Sports Report,
http://www.legalsportsreport.com/6014/less-skill-in-seasonlong-fantasy/ (last visited
December 21, 2016).
89
People v. Fanduel, Inc., 2015 NY Slip Op 32332(U) (Sup. Ct. 2015). Affidavit
provided:
94 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
Marc Edelman (the author of A Short Treatise on Fantasy
Sports and the Law and Navigating the Legal Risks of Daily
Fantasy Sports) argues that the issue of whether fantasy sports are
gambling lies between clearly legal and explicitly illegal.
90
The
variety of games and laws in each State creates no magical “one size
fits all” answer.
91
This is why Daily sites are hiring counsel, not
operating in certain States, and a lengthy “terms of use” page is
easily accessible on sites like FanDuel and DraftKings.
92
3. Drafting
Drafting is one of the largest aspects of owning a fantasy team.
Three types of drafts are used for traditional fantasy: (1) Snake
Draft, (2) Straight Draft, (3) Auction draft.
93
Each type of draft
requires an aspect of knowledge and skill to build a championship
quality team.
One difference between daily fantasy and traditional fantasy
is that once a player is chosen in traditional fantasy leagues that
player is no longer available. In daily fantasy, multiple teams are
allowed to have the same players, which creates less strategy as a
traditional player.
94
A traditional player selects fantasy players to
fill starter positions, along with backups to fill in for players based
on bye weeks and bad match ups against an opponent during the
season. Also, when drafting in traditional fantasy a player must
take into account, which opponents are in their division.
95
The
reason for this is most leagues set up two matches throughout the
season with divisional opponents. This could mean if a team has the
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=hA6u1Mg3
E4vZGP_PLUS_XLAb9Ow==&system=prod (last visited December 20, 2016).
90
Marc Edelman, Some Daily Fantasy Sports Are Legal, Others Not So Much, US
News, http://www.usnews.com/debate-club/are-daily-fantasy-sports-gambling/some-
daily-fantasy-sports-are-legal-others-not-so-much
(last visited December 17, 2016).
91
Id.
92
Id.
93
Definitions of these type of drafts are available at: Fantasy Football 101: Types
of Drafts, SB Nation, http://www.windycitygridiron.com/2011/3/1/2022378/fantasy-
football-101-types-of-drafts (last visited December 21, 2016).
94
Entering the Same Team Multiple Times: Is it a Good Play?, Roto Grinders,
https://rotogrinders.com/articles/entering-the-same-team-multiple-times-is-it-
profitable-103881 (last visited December 21, 2016).
95
Boswell, supra note 19 at 1264.
Fall 2016] Daily Fantasy A Form Of Gambling? 95
quarterback for the New Orleans Saints that player may want to
draft the top wide receiver for the Saints to equal out points if the
quarterback is throwing touchdowns. This type of strategy is not
present in most daily fantasy games due to playing against
thousands of players at one time.
96
Daily fantasy’s strongest argument for having a high level of
skill comes from games that involve auction/salary cap drafts. The
auction/salary cap aspect creates skill by introducing an economic
analysis. The fantasy player has to strategize the value of real life
players to the amount of salary cap he has available. This is
different from valuing players based on draft spots, which could be
argued as increasing the amount of skill due to the financial
analysis being made.
The fantasy player has multiple strategies when creating a
fantasy team through auction drafts. The fantasy player may
decide to choose a few high priced players and add low priced
players to fill out the rest of his roster.
97
Another strategy is to
choose a team of all average priced players.
98
The argument for daily fantasy having an aspect of skill in
drafting players is present, but it still does not have the element of
micromanaging a team on a weekly basis.
99
If a player gets hurt in
a game or the player doesn’t perform well that week it is not going
to affect traditional fantasy players over a seventeen-week
period.
100
4. Prizes
Prizes are an important factor in determining the legality of
daily fantasy. In the past fantasy sports was a way for a group of
friends to get together and compete similar to the story in the
introduction. The money aspect of traditional fantasy is usually just
96
Joshua Brustein, You Aren’t Good Enough to Win Money Playing Daily
Fantasy Football, Bloomberg Business, http://www.bloomberg.com/news/articles/2015-
09-10/you-aren-t-good-enough-to-win-money-playing-daily-fantasy-football (last visited
December 21, 2016).
97
Dr. Renee Miller, Strategies for playing daily fantasy football, ESPN,
http://espn.go.com/fantasy/football/story/_/id/13090670/best-strategies-how-play-daily-
fantasy-football (last visited December 10, 2016).
98
Id.
99
Boswell, supra note 19 at 1264.
100
Cabot & Csoka, supra note 14, at 1211.
96 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
an added bonus to increase the thrill of playing.
101
Before Daily
fantasy existed, the argument was made that the money involved
in fantasy sports was so minimal that these games could only have
a substantial negative effect on the crime rate and economy if every
participant were to compete in a great number of fantasy games.
102
Fast-forward to today, fantasy sports is a fifteen-billion-dollar
industry with over fifty million players. People are even becoming
professional daily fantasy players. There are prizes of over one
million dollars being paid out to players, which is more than the
twenty-five dollars a team of ten traditional fantasy players will
pay for a league spanning seventeen weeks.
103
Daily fantasy
supporters make the argument that daily fantasy would never
reach the level of traditional betting, and only small groups of
players consistently play in high-level games.
104
Further, they
argue one to ten dollar games are available along with free games
if players choose to participate.
105
However, the true purpose of daily fantasy is to win money.
There is no companionship created with daily fantasy because you
are playing against thousands of people. Even if you play in a head
to head matchup you never communicate with your opponent. The
passionate connection a season-long player has with his team is
never able to form because he is moving on to a hotter fresh team
the next week. States may want to look at how they have handled
online poker versus social poker to allow for traditional fantasy
while regulating daily fantasy.
106
Another problem with daily fantasy is the fact that the top 1
percent of bettors, also pay lots of entry fees, enter a variety of
games, and enter diverse lineups, which allows them to pull in 91
101
Boswell, supra note 19 at 1264.
102
Michael J. Thompson, Give Me $ 25 on Red and Derek Jeter for $ 26: Do Fantasy
Sports Leagues Constitute Gambling?, 8 Sports Law. J. 21, 25 (2001).
103
Recapping this week’s two million dollar winner, DraftKings,
http://playbook.draftkings.com/nfl/recapping-this-weeks-two-million-dollar-winner/
(last visited December 20, 2016).
104
Brustein, supra note 95.
105
Ehrman, Supra note 100 at 108.
106
A compilation of the legality of social games in each State is available at: Home
Poker Law, Home Poker Games, http://www.homepokergames.com/homepokerlaw.php
(Last visited December 4, 2016).
Fall 2016] Daily Fantasy A Form Of Gambling? 97
percent of profits.
107
Meanwhile, the casual bettor pays an average
of $49 in entry fees but loses half of the time.
108
Nigel Eccles, the
chief executive of FanDuel, believes this gives evidence that daily
fantasy is skill.
109
However, the technique top bettors are using is
similar to buying a lottery ticket. A person who buys enough tickets
and diversifies the combination of numbers, at least increases the
chances of winning relatively more than buying one ticket.
110
Daily
fantasy’s structure allows for a greater return than the lottery
because 22 percent of contestants will win every game.
111
Skill may
play some factor in the top 1 percent of daily fantasy players
winning 91 percent of profits, but if daily fantasy were pure skill
the major betters would not need multiple attempts at joining a
daily fantasy game.
112
Further, Timothy Fong the co-director of the gambling studies
program at UCLA agrees there is emerging evidence showing daily
fantasy as skill, but the issue is not players getting better with
experience.
113
Fong argues that the issue is the classification of the
game.
114
Poker is also a game of skill, but when it is played for cash
prizes it is tightly regulated in the United States and generates
small revenues, unlike daily fantasy.
115
107
Drew Harwell, All the reasons you (probably) won’t win money playing daily
fantasy sports, The Washington Post, https://www.washingtonpost.com/news/the-
switch/wp/2015/10/12/all-the-reasons-you-probably-wont-win-money-playing-daily-
fantasy-sports/ (last visited January 5, 2016)
108
Id.
109
Id.
110
Jeff Barker, Statisticians question logic of buying multiple lottery tickets as jackpot
rises to $1.5 B, Baltimore Sun, http://www.baltimoresun.com/business/bs-bz-powerball-
maryland-odds-20160111-story.html (last visited December 5, 2016).
111
See Harwell, Supra note 116.
112
For example a daily fantasy game consisting of 740 players with an entry fee of
$300 will award a prize to the top 155 finishers. The prizes of first place to 155
th
place
range from $30,000 to $600. A player that enters multiple lineups will be able to increase
his relative chances of at least being in the 155
th
spot. The risk in daily fantasy seems to
be worth more than playing at the casino because there is a guarantee that 155 entries
will return at least double of the entry fee. Draft Kings,
https://www.draftkings.com/lobby#/featured (last visited January 5, 2016).
113
Timothy Fong, Daily Fantasy Sports Games Are Clearly Gambling, US News,
http://www.usnews.com/debate-club/are-daily-fantasy-sports-gambling/daily-fantasy-
sports-games-are-clearly-gambling (last visited December 21, 2016).
114
Id.
115
Id.
98 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1
With daily fantasy giving prizes to participants, this satisfies
the consideration and prize elements of the common law definition
of gambling.
116
Traditional fantasy also meets these
requirements.
117
However, Daily fantasy is taking money off the top
of these bets and creating larger revenues than online poker.
118
The
determination as to whether daily fantasy is gambling will be left
for the court to decide if the duration, type of contest, and the way
players are drafted satisfy enough skill to overcome the amount of
chance involved.
IV. CONCLUSION
This article reviewed how daily fantasy is able to hide a game
of chance behind the illusion of skill. The only federal law that
explicitly protects fantasy sports is the UIGEA, however, there is
debate as to whether this would extend to daily fantasy.
The true test of the legality of daily fantasy will come from
individual state statutes. This creates a great deal of difficulties in
determining if daily fantasy is gambling. The majority of state
statutes most likely would not determine daily fantasy as illegal
gambling.
States that are looking to ban daily fantasy, while still keeping
traditional fantasy should look to adopting a similar statue as
Montana. Further, Montana running a weekly fantasy system
through their lottery helps the argument that daily fantasy is a
game of chance.
Ultimately, daily fantasy leagues align closer to sports betting
than traditional fantasy leagues. Daily fantasy does have some
attributes that make traditional fantasy sports leagues a game of
skill. However, daily fantasy does not incorporate the totality of
skill that it takes to run a traditional fantasy sports league, which
ultimately makes it a game of chance. The freedom that sites like
DraftKings and FanDuel have experienced will most likely be
threatened as States take a more aggressive approach to regulating
116
Anthony N. Cabot & Louis V. Csoka, Games People Play: Is it Time for a New Legal
Approach to Prize Games?, 4 NEV. L. J. 197, 216 (2004).
117
Id.
118
Eric Chemi, Online poker vs. daily fantasy: Which creates more winners?, CNBC,
http://www.cnbc.com/2015/10/02/online-poker-vs-daily-fantasy-which-creates-more-
winners.html (last visited December 19, 2016).
Fall 2016] Daily Fantasy A Form Of Gambling? 99
daily fantasy. Though direct legal action has been rare, legislation
is beginning to be brought that could hurt the profit of these sites.
These sites can only hide behind the “skill” element for so long
before the “chance” element begins to reveal itself.
