The hot button issue in Daily Fantasy Sports today centers around the debate over whether or not it can be classified as gambling. At the current time, the legality is being questioned by some, but there really doesn’t appear to be a case. Laws governing the legality of fantasy sports are included in the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) which allow the industry to operate and thrive. This fact is the most commonly quoted argument against seeing Daily Fantasy Sports as a form of gambling; The government didn’t deem it as such, so neither will we. Yet the similarities between the two are hard to ignore.
Game of Skill
No one will argue that it is in the best interests of operators such as DraftKings and Fanduel to continue to shout from the rooftops that it is NOT GAMBLING. After all, should it be designated as such, the large niche which they have carved out would disappear in an instant. They rely on the word “skill” to justify their argument.
As noted on the DraftKings website;
“We are a US-based skill games company, and all of our contests are operated 100% legally under United States and Canadian law. The US Government and 45 of the 50 states consider fantasy sports a game of skill.” How the industry defines itself and thus how it is perceived by those with the power to enact laws are very important in the grand scheme of things, even though to the casual user it may seem like semantics. Arguing over what defines a word while arriving at a stalemate.
Fantasy Sports Trade Alliance
DraftKings along with all other operators are handcuffed by the wording of a bill. In order to become a member of the Fantasy Sports Trade Alliance, of which all paid operators subscribe, one must adhere to the following conduct as outlined in their Paid Entry Contest Operator Charter;
“The signatory company will avoid the use of gambling terms in the promotion and marketing of their games. They will not market their as fantasy sports gambling, or fantasy betting. Gambling terms include (but are not limited to): gamble, gambling, betting, bet, wager, rake, rakeback, parlay, juice, vigorish, vig, pot and spread. Generally accepted terms are ‘entry fees’, ‘prizes’ and ‘commission.’ Furthermore, when briefing journalists, signatory companies will emphasize the skill nature of the game and maintain a clear divide between fantasy sports and sports betting”
It’s clear to see how the industry leans with regards to being designated as gambling, but how does it stack up to the term?
Looking at the definition of gambling as defined by Merriam-Webster, one can see why the anti-gambling narrative of the industry is strong; Gamble: 1. a: to play a game for money or property 2. b: to bet on an uncertain outcome 3. to stake something on a contingency: take a chance (Ref: Merriam-Webster.com)
Daily contests fit all of the requirements to be defined as gambling. You are playing a game for money, whether against a person or the house is inconsequential, based on an uncertain outcome for an expected return. Skill plays a heavy hand in all forms of gambling, and fantasy sports are no different. An argument could be made that DraftKings agrees with this sentiment, although they would not dare voice such a thought towards their North American market.
The UK market appears to be a different story as DraftKings have their sites set on entering; Applying for and receiving a UK Gambling Commission license. What many may claim as semantics is rather telling. They are looking towards business in a market well versed in all forms of gambling, which recognizes fantasy sports as such, while denying the hobby as gambling in a market still in it’s infancy towards all regards. A distinction must be made, but ultimately that distinction is up to the end user. Whether skill based or gambling, always do it responsibly.