Is DFS Legal or not?
In response to millions of Americans joining the new trend of online fantasy sports betting, many are asking, is daily fantasy sports legal? Major daily fantasy sports sites such as DraftKings or FanDuel are growing larger than ever, especially in the marketing department. The two giant corporations have taken to television broadcasting with at least a few ads for each broadcasted game.
These fantasy sports sites allow you to draft a new team each week without risking seasonal injuries or cold streaks. You can prepare an entirely new team with zero season-long commitment every week. As well the behemoth DFS platforms, several other smaller to medium sized daily fantasy sports sites are growing in popularity as the sports betting alternative takes the US by storm.
The industry has grown immensely in recent years, with a now running count of over 57 million users in the US alone. Although not all states have deemed fantasy sports legal, most states in the Union see this type of gameplay as a game of skill and thus legal. If you wish to seek some gambling thrill and a chance to win real money, you can legally do so through online fantasy sports betting.
The History of Fantasy Sports
Fantasy sports began early in the 1960’s and then later emerged online in the late 90’s with the invention of the Internet. Similar to the initial concept of the game, the purpose of fantasy sports is for players to select a team comprised of individual athletes from different teams. The score or point system is directly proportional to the player’s performances, which cumulate in a point total. Nowadays, sports fans can wager real money online to create a lineup to go face to face with other players’ lineups in a tournament competition.
The 2006 Unlawful Internet Gambling Enforcement Act is a Congressional piece of legislation that outlines all illegal forms of gambling on the Internet. The act’s primary purpose is to manage banking transactions between illegal gambling distributors and gambling consumers. The UIGEA purposely caused the withdrawal of several large businesses by banning their online gambling methods and tightening future regulation. Online fantasy sports betting is the booming industry it is today thanks to the UIGEA.
Where the UIGEA Ties into Daily Fantasy Sports
The UIGEA is vital to the fantasy sports industry because US Congress exempted online fantasy sports betting from the list and deemed the gambling method a game of skill. The reason for such a ruling came from hard evidence of skill based variables that impact the gameplay. Participants or team managers that continually practice and skillfully research several statistics and game factors have a far better chance of winning. Therefore, the UIGEA explicitly leaves online fantasy sports out of its definition of gambling.
For a Daily Fantasy Site to legally operate through federal law and gambling regulations, the platform must abide by several conditions:
- Prizes and awards must be determined and shown to players before the tournament begins
- The number of participants in and the amount of fees gathered cannot determine the prize value
- The game outcome must be determined by player's knowledge and skills, as well as the accumulation of various statistics on athletes and teams.
- The result of the gameplay must not be based on a point spread or the overall performance or score of a team
- The outcome must not be based solely on one athlete
What Sport's Prohibit Betting on Fantasy Sports?
Although the UIGEA is considered a federal bill that covers all 50 US states in the Union, the law also allows states to have their own legal definitions for gambling. Additionally, states have the right to authorize or deem any method of gaming illegal if passed through a vote. These states that constitute online fantasy sports include:
In these states, such sites as DraftKings and FanDuel do not offer cash events or tournaments. State gambling regulation does, in fact, take precedence over federal regulation due to states having their own gaming allowances to regulate the industry.
The Predominant Purpose Test vs. The Any Chance Test
The reason that online fantasy sports betting is legal in most state legislations is due to the game’s degree of luck and skill using the Predominant Purpose Test. The test determines if there are any elements of chance in a certain game. A game will pass the test if the majority of its elements revolve around skill. However, states that deem fantasy sports illegal use the Any Chance Test, which require that there be zero percent of luck involved.
Fantasy Sport's Future
For all you sports fans out there that are interested in trying your hand in fantasy sports betting, the time is now. At the moment, many sites are facing further regulation and management. However, the future for fantasy sports is still brilliant and will continue to thrive. Many smaller daily fantasy sports sites are making headway amongst the giants of FanDuel and DraftKings. Check out all of our reviews for info on the top fantasy sports sites as well as all of the bonuses being offered now.
Have fun and good luck!