Daily Fantasy Sports: Gambling on Continued Legality


With the recent emergence of daily fantasy sports websites such as DraftKings and FanDuel, the nerdy pursuit of statistical supremacy of one imaginary team owner over others during the course of an entire season has been replaced by down-and-dirty bids to collect cash on the basis of a single weekend's sports action.

Daily fantasy is played much like regular fantasy, with players choosing lineups and scoring points based on individual player statistical achievements. Player fees fund the payout for winners at the end of the season. The difference between daily fantasy and traditional fantasy is that there is a new game, and a new chance to win, every day or week.

Investors appear enthusiastic. Bloomberg Sports reported in July that the two leading daily fantasy companies – DraftKings and FanDuel – had completed $300 million and $275 million financing rounds respectively.  

The U.S. Department of Justice hasn't put its bet down yet.

Season-long fantasy sports leagues operate under the federal anti-Internet gambling law's carve-out for bona fide fantasy sports games that reflect the “knowledge and skill of the participants” and are determined based on the statistical performance of athletes in real sporting events. 

Over a full season, knowledgeable football fans should be able to manage their teams to victory in traditional fantasy leagues. But on “any given Sunday,” as NFL observers like to say, anything can happen. Hunches, stray data points of questionable provenance, and plain old luck -- the standard tools of gamblers everywhere -- may trump knowledge and skill, allowing casual fans to triumph over the nerdiest of stat junkies, which can make the game resemble gambling.

If this difference is significant to federal law enforcement officials, it could be "game over" for daily fantasy websites.

Note: Daily fantasy sites currently block users in Arizona, Iowa, Louisiana, Montana and Washington, each of which has declared all forms of fantasy sports for money illegal.