HomePublicationsNewsletter ArchiveNewslettersVolume 20Issue 29Panel Discusses Daily Fantasy Sports at Global Gaming Expo 2014

On Wednesday, October 1, 2014, a panel of daily fantasy sports operators and sports wagering consultants discussed the evolving fantasy sports industry and its implications on traditional sports wagering activities. The panel, entitled “Legal and Booming: Fantasy and Sports Betting in the U.S. and Beyond,” focused on various legal and operational considerations for those offering fantasy sports games in the United States.

The panel was moderated by Ms. Lynne Levin Kaufman, Partner at Cooper Levenson, P.A., and included Mr. Jason Robins, CEO of DraftKings, Owen O’Donoghue, Gaming Marketing Solutions Team at Facebook, Mr. Dennis Driver, Head of Trading and Betting Operations for GTECH, and Mr. Joe Asher, CEO of William Hill.

Ms. Kaufman began by noting that approximately 36-40 million U.S. players participate in some form of fantasy sports annually. Mr. Asher noted that Nevada, the only domestic jurisdiction that offers full-scale sports wagering, has seen recent growth in live sports wagering, which has not been negatively affected by the state’s recent authorization of mobile wagering platforms.  In addition, as noted by Mr. Driver, the international sports wagering market has seen significant growth in European and Asian markets as jurisdictions expand or authorize sports wagering. Mr. Driver also noted several current issues facing international sports wagering operators, including protecting against match fixing and monitoring and regulating exchange wagering operations.

The issue of daily fantasy sports contests has unique legal implications due to the federal Professional and Amateur Sports Protection Act of 1992, which only allows for full wagering on sports in Nevada and limited sports lotteries in Oregon, Delaware, and Montana.

Mr. Robins stated that he believes the contests are skill-based and, therefore, no “wagering” activity is occurring because the element of chance has been minimized. In addition, he noted that data supports the assertion that daily fantasy sports are a game of skill by showing player improvement over time and the continued success of skilled players. In support of this argument, proponents have also cited the Unlawful Internet Gaming Enforcement Act of 2006, which contains an exemption from the definition of “bet or wager” for fantasy sports games that have “outcomes [that] reflect the relative knowledge and skill of the participants” and that are based on the individual outcomes of professional athletes that do not all play on the same team. (31 USC 5362(1)(E)(ix)(II)).

Notably, the panel did not discuss in detail the unique laws in some jurisdictions which broadly outlaw wagering on contests or activities where the outcome is uncertain. There also was limited discussion of the impact of fantasy sports shifting from season long contests to weekly or daily contests on the “skill” argument.

Mr. Robins noted, at the prospect of legalized sports wagering on a national level, that the expansion would benefit the overall fantasy sports market as there appears to be a continued demand for such products. The panel agreed that fantasy sports options will continue to expand as interactive entertainment platforms evolve, but that the dynamics will depend upon whether legalized sports wagering expands.

 

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