Fantasy Sports: Fun or Gambling?

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The New York Law Journal reports that a man is using New Jersey’s qui tam laws to sue “ESPN cable network, CBS and The Sporting News [on the grounds that they] are getting away with illegal gambling by hosting pay-to-play fantasy leagues, complete with big cash prizes and wide-screen TVs.” The distinction at issue is whether fantasy sports are games of chance or skill. According to the article fantasy sports are “a $1.5 billion industry with more than 15 million players.”

As I understand it, distinguishing between games of chance and skill is difficult in part because states vary in how they approach the question. Nonetheless Reed Smith Hall Dickler (a firm that specializes in marketing and sweepstakes law) offers these guidelines on what is an illegal lottery “a game or contest in which the outcome is determined by chance, the entry requires some form of consideration, and the winner is awarded a prize.” In the fantasy case the consideration seems clear enough and prizes are awarded according the complaint. The chance issue is a little harder to define. The article notes that some consider the endless analysis of the statistics (now allowed thanks to C.B.C. Distribution and Marketing v. Major League Baseball Advanced Media) skill.

The Fantasy Sports Trade Association’s representative, Glen Colton, argues:

“I think that the premise that [a fantasy sport] is more chance than skill is simply wrong,” Colton said. “There are very large number of ways in which someone can skillfully and intellectually predict how a player is going to perform.”

For example, Colton said, a fantasy football player can study offensive coordinators’ techniques, evaluate who gets the ball more often — wide receivers or running backs — or study a quarterback’s performance.

All very nice but really isn’t that what people do when they study horse racing, football, baseball, etc. and bet? Plus according to Reed Smith Hall Dickler in at least one case predicting the outcome of a sporting event is an illegal lottery.

Of course in our world of let’s just change the law to make it fit this circumstance and ignore the possible inconsistencies (such as with offshore gambling prosecutions ) Mr. Colton noted “that a bill is pending in Congress that would declare fantasy sports a legal business, not gambling.”

And so in the words of Inspector Clouseau the problem may be sol-ved.

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4 Responses

  1. patrick says:

    to say that fantasy sports is not a “skill” game would be to say that general managers of professional sports teams are not acting in skill positions. In playing fantasy sports you are acting as the owner of a team: you are drafting players, making trades, cutting players and picking players up off the waiver wire.

    So, are you saying that there is no such thing as a good versus a bad general manager? If so, you’re wrong. read the book “moneyball” and you’ll realize that good teams are good for a reason–because the GM’s make smart decisions in trading and drafting players. The same is true for fantasy sports.

    Perhaps you should play fantasy sports before making a blog post such as this. As it stands, your argument has little merit.

    sorry if i’m being conclusory in my comments here. but your post was nonsense, and it deserves no better treatment.

  2. Kaimi says:

    Wow. That comment completely missed the point of your post. Not bad for total lack of comprehension.

    But back to your point, Deven. It’s absolutely true that the line between the two is blurred sometimes, and that a lot of items earmarked as “gambling” also involve some degree of skill. Your post highlights the fact that the disctinction is largely artificial. Yes, we can point to examples at either pole. Running a 40-yard-dash is (pretty much) entirely skill; flipping a coin is entirely chance. But there are a number of gradations in between; life doesn’t easily divide between “chance” and “skill” and as long as the two are given different legal status, we’re going to end up with a gray area which will ultimately be policed by the courts, the legislature, or both. Which is exactly what’s going on here.

    I’d say more, but I need to spend the rest of the evening doing research for my fantasy football team . . .

  3. patrick says:

    Kaimi,

    Yes, the post was talking about the distinction between games of skill and chance. I’m saying that fantasy sports are quite clearly games of skill.

    how was that missing the point? what was i not comprehending about the post?

  4. Deven Desai says:

    What you are not comprehending is that merely asserting it is skill gets you nowhere. Rather than making ad hominem attacks and broad statements, try and address the argument that the article makes on the other side and the post sought to highlight: skill and chance may be hard to parse.

    As the article countered:

    “For example … if a baseball pitcher throws out his arm, or a football player twists an ankle, or a coach pulls out a star player to give him a break — all of those circumstances are beyond the player’s and bettor’s control. ‘A player can perform well or poorly based on circumstances out of their control and out of the control of the bettor,’ …This falls into a game of chance.'”

    Of course managers employ skill in making dynamic decisions during a game. The post does not even bring that up. You do and that may be where the confusion arises. A fantasy player does not have that same role. ALSO recall that the post cited to at least one ruling that held predicting sports events is an illegal lottery.

    Your task (and I think it is an interesting one) is to show how fantasy sports is in fact truly different than someone studying horses and betting on a winner. Yes the fantasy player studies more people etc. but that is not really dispositive of the chance issue once the game is in play. NOW you may have details of fantasy sports mechanisms at hand that can support your claim that it is pure skill but you need to offer those points rather than saying “It is skill because I say so.”