DEMI HALOMOUKOS – In recent years, Fantasy Football has exploded from teams amongst friends for small payouts to nationwide leagues with the opportunity to become a millionaire. With a simple google search, you can find countless websites eager to take your money in exchange for a chance to finally prove you are the next Don Shula. The way this works is participants log on to their site of choice and draft players for their team based on a salary cap. These teams can last throughout the entire season, or even just one week. Points are awarded each game for touchdowns, interceptions, and everything in between. And these points can lead to some serious money. Throughout the 2014-2015 NFL season, five of the most popular Fantasy sites will pay out over ten million dollars each week. One of the most popular money league sites, Draft Kings, paid out six million dollars in the first week alone. But the competition for these huge payouts is stiff. ESPN alone has an estimated fourteen million fantasy players this year. Although the participation rate has already skyrocketed, the numbers could be even higher without the looming question: is this legal?
The Internet Gambling Prohibition and Enforcement Act of 2006 was created to stop internet gambling, and it specifically addresses fantasy leagues. It explains that such leagues are allowed as long as the fantasy team is not based on the current membership of any actual team, the participants are made aware of the prizes before agreeing to participate, and winning outcomes are based on the skill and knowledge of the participant rather than the score or point spread of an individual game or performance of a specific athlete. Therefore, as long as you are eighteen years or older, participating in fantasy leagues for cash is perfectly legal.
Soon after this act, however, Fantasy Football came under fire. In the 2007 case Humphrey v. Viacom, Inc.,the plaintiff argued that the entry fees to participate in such leagues constitute wagers and the winner is determined by chance, not skill. The court denied these arguments and dismissed the case, determining that fantasy sports do involve skill and the entry fee is not a wager because it does not affect the potential prize money.But a more recent case, Langone v. FanDuel, Inc., arose in 2013 and addressed the developing daily sports contests. Although this case was also dismissed, the plaintiff raised many sound points in this emerging industry. While the court justified traditional fantasy sports on the basis that that they were predominantly skill based with season-long management, trades, and decisions on who to bench or play, with weekly leagues these long term decisions go out the window.
For now, Fantasy Football money leagues remain a carved out niche of the aforementioned act. However, now that more and more sites are focusing on weekly competition, there is less skill and team management involved chance and luck become the overwhelming factor. These leagues are taking a turn from sticking with a team from the start to finish of a season to picking big name players and hoping they have the game of their career so you can quit yours. It will be interesting to see if the law changes in response to this booming business, and while questions still linger about the legality of these activities certain potential businesses or players will stay out while those who have taken the risk will bask in the profits of this nearly five billion dollar industry.
