In defense of fantasy sports gambling

The New York Attorney General’s office recently sent cease and desist letters to “daily fantasy sports (DFS) wagering sites DraftKings and FanDuel… ordering both companies to immediately stop accepting wagers inside New York.” Attorney General Eric Schneiderman said, “Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers.”

To understand the position of the AG, even if you don’t agree with the stance, it is important to know the difference between traditional fantasy sports and daily fantasy sports. In traditional fantasy sports, the person playing (“team owner”) either for free or for money will select the players on his fantasy team before the season begins, and will be able to trade, drop and add players during the season. Fantasy teams within a league will play games against one another in a season that mimics the real season of the sport in question. The owner of the fantasy team with the best record at the end of the season, or the team that wins a playoff at the end of the season, is the winner. Whereas in daily fantasy sports, the team owner does not have the commitment of playing a full season, they still must draft players however they only have those players for one game. The main difference between the two types of fantasy sports is strategy and duration. Even so, the NYAG’s office writes, “the legality of traditional fantasy sports has never been seriously questioned in New York.”

Both forms of fantasy sports require skill and knowledge of the games being played, whereas none of the games offered by the New York Lottery require any skill. This stance is a little ironic considering the letter from the AG’s Office states, DraftKings and FanDuel “has promoted, and continues to promote DFS like a lottery.” I guess the difference is that the NY Lottery is “legal gambling” (i.e. specifically authorized by statute) that somehow has none of the supposed “social and economic harms… of illegal gambling.”

A statement by DraftKings states, “New York’s actions today are an unfortunate example of a state government stifling innovation, technology and entrepreneurship and acting without full and fair consideration of the interests of consumers.”

New York is not alone in cracking down on fantasy sports wagering. ESPN reports, “Arizona, Iowa, Louisiana, Montana and Washington prohibit fantasy sports for money. Several additional states do not allow some forms of daily fantasy [sports].” ESPN adds, “The attorney general’s office has said it is not looking to get money back from New Yorkers who won on daily fantasy sites.”

Both companies, FanDuel and DraftKings, have filed lawsuits challenging the order by the NY AG. As with most things involving courts and legislation, it will likely take years for this issue to be resolved. It should not matter if fantasy sports, traditional or daily, are considered games of skill, which they are, or games of chance. The courts should recognize the rights of people to spend their money as they see fit, and all laws regulating or prohibiting gambling should be repealed.