Just how legal are daily fantasy football leagues?

Being a sports fan in the 21st century means something different than it did 20 years ago. Where before one had to wait to read the daily sports section in the paper to find out what was happening with one’s favorite teams and players, such information is now available at a moment’s notice through the internet.

Statistical analysis is no longer so rudimentary, with a growing number of people becoming increasingly acquainted with more sophisticated advanced statistics and sabermetrics when judging performance.

And of course, maybe the biggest change has been the explosion in popularity of fantasy sports (especially football), in which competitors assemble teams of their favorite players and pit them head-to-head against their friends’ teams, with the outcomes being based on the players’ statistical performances. Fantasy sports are a generally harmless pastime, a fun way for the Average Joe to simulate the thrill of being a general manager and an outlet for competition between friends.

However, in recent years there has been a new trend in fantasy sports, one which is decidedly more controversial and some might even say sinister. If you watch or follow sports at all, you have probably already seen some its relentless advertising, which has undoubtedly gotten under some people’s skin. But love it or hate it, Daily Fantasy Sports are here to stay.

DraftKings and FanDuel, the two largest Daily Fantasy services, brought in $426 million and $363 million over the latest football offseason and are now both valued at over $1 billion.

To give those numbers some further context, the two sites’ combined $60 million entry fee haul from opening week of the NFL season was almost twice what sports books made in Vegas. The appeal of DFS is simple: a common selling point is that one is not locked into a season-long commitment as is the case in a traditional fantasy league.

Participants enter tournaments on a weekly basis and select their players based only on how they believe they will perform on that given Sunday. In addition, there is no option on the major sites to play for free against one’s friends, to simply experience the joy of friendly competition. Rather, the nature of the beast is money, putting in a little to try to make a lot.

If that sounds like gambling, it should, because there is absolutely no difference in principle. Under the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), provisions are made for fantasy sports and other “games of skill,” but this is merely arguing semantics over how large a part skill plays in the success of DFS players.

There certainly exists some element of skill in the game, but it is one based mostly on analytical savvy and capability, as well as the actual time commitment one is willing to take. The most successful DFS players treat it as their everyday job, critically analyzing thousands of subsets of data and placing entries in hundreds, if not thousands of tournaments, daily.

An everyday person who just wants to pick his favorite players and enter a few tournaments stands virtually no chance of earning any significant amount of money in the long run, despite the lavish promises offered by the industry in its advertisements.

Unfortunately for DraftKings, FanDuel, and the other DFS providers, a federal probe has been launched in an effort to make them face the music. Following the scandal of Ethan Haskell, a DraftKings employee, using alleged insider trading to win $350,000 from FanDuel with a $25 entry fee, the office of Preet Bharara, the US Attorney for the Southern District of New York, began its investigation. Bharara has had success in the past in his crusade against violators of the UIGEA, particularly in regards to online poker; his probe in 2011 forced the shutdown of several providers and saw multiple hundred million dollar settlements.

Whether or not he will experience a similar level of success in DFS remains to be seen, but the story will be an interesting one to watch in subsequent months.

Post Author: tucollegian

Leave a Reply

Your email address will not be published. Required fields are marked *