Gambling and the Law®
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The law of gambling can be simple, or enormously complex. For example, all gambling requires three elements: prize, chance and consideration. But creating a successful game that has only two of those elements can be extremely difficult. Similarly, some forms of online gaming are legal, but only a legal professional can tell you whether your plans meet the requirements of the law.
Professor I. Nelson Rose is recognized as one of the world's leading authorities on gambling law. He is an internationally known scholar, with more than 1,500 published works, and public speaker, often the keynote speaker on gambling issues. A 1979 graduate of Harvard Law School, he is a Distinguished Senior Professor at Whittier Law School in Costa Mesa, California, where he taught one of the first law school classes on gaming law, and a Visiting Professor at the University of Macau.
Day 6 Productions
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To help save endangered wild elephants, my wife, Patricia; daughter, Lauren; son-in-law, Hamish; and I founded Day 6 Productions. I created these ceramic “Ellie Funts,” with Hamish, a production potter. We give 15% of the proceeds to the David Sheldrick Wildlife Trust, which rescues baby elephants, whose mothers were killed by poachers. www.Day6Productions.com.
Are Daily Fantasy Sports Legal?
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Gambling and the Law®:
Are Daily Fantasy Sports Legal?
Technology is speeding up changes in the world of gaming. It took almost two centuries for poker to evolve from Straight Poker – five paper cards dealt face down with no draw – to Internet Hold ‘Em linking players using computers in different states and even on different continents. Decades passed before three-reel mechanical slot machines were replaced by electro-mechanical gaming devices; then decades more before those made way for 100% computerized video games with virtual reels, and online slots with no physical cabinets at all. Even bingo took years to evolve from a game played with beans on hard cardboard cards, to printed papers daubed with ink markers, to linked machines that are almost indistinguishable from slot machines.
There has always been a latest new thing in gaming. But those are coming faster and faster, usually in completely unpredictable ways. Internet gambling, especially online poker is still being fought over in state legislatures. But the real growth area, a couple of years ago, was social casino games. Today it is daily fantasy sports.
The introduction of daily games has been as big a boost to the world of fantasy sports betting as the invention of the under-the-table camera was to T.V. poker.
But, is daily fantasy legal?
End Game for Daily Fantasy Sports?
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Gambling and the Law®:
End Game for Daily Fantasy Sports?
Daily Fantasy Sports is Rocky Balboa.
Like Rocky in the big fight scene in Rocky I, DFS operators have been on the ropes since the beginning of October. But, also like Rocky, they continue to battle on, taking a beating that would floor any lesser competitor.
For example, during one week in September, “DraftKings was the single biggest advertiser on television.”[1] DFS operators have slowed their spending, in part because media companies are reluctant to run commercials for what might be illegal gambling. Still, DraftKings, FanDuel and their smaller competitors continue to spend enough to “move the needle” on the total amount spent by all advertisers for all products and services throughout the entire United States.[2]
Much of DFS operators’ bruises have been self-inflicted. DFS sites are staffed by people who like to play fantasy sports. This is true of every gaming operation that puts an existing game to the Internet. But DFS operators should have learned the lesson of Absolute Poker, where an insider was discovered to be a “super-user,” with the ability to see every other players’ down-cards.
[Add discussion of Absolute not being destroyed by bad press]
DraftKings and FanDuel say they had already taken the obvious first step of banning their employees from participating in DFS on their own sites. We have to hope and assume this also covers not passing on inside information to family and friends.
What Should Daily Fantasy Sports Do Now?
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Gambling and the Law®:
What Should Daily Fantasy Sports Do Now?
The two big Daily Fantasy Sports (“DFS”) operators, FanDuel and DraftKings, and their backers, are, in the immortal words of former President George H.W. Bush, in “deep-doodoo.” But lawyers with legal shovels can probably dig them out.
As recently as last year, the DFS industry’s problems were relatively insignificant. As in the early days of Internet poker, operators were making so much money that they could afford to brush off the few scattered questions about the games’ legality.
The explosion of interest in DFS, fed in part by unprecedented massive television advertising campaigns, was bound to raise challenges. DraftKings and FanDuel are more than just important advertisers for ESPN. “In fact, some 59% of the media advertising revenue growth in the last quarter ($134 million) came from the fantasy sites.”[1] But a scandal at the end of September 2015 brought operators attention they did not want, including threats from government officials that the DFS operators would be arrested unless they stopped taking players from Nevada and New York.
The scandal could have been easily avoided. A manager of DraftKings accidentally released confidential information about which real-world athletes DFS players were selecting, and then, perhaps coincidentally, the same manager won $350,000 playing fantasy football at rival FanDuel. This, of course, looked like the DraftKings employee used inside information to give himself an advantage in choosing which players to put on his FanDuel fantasy team.
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