Fantasy Sports: Fun or Gambling?
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.