Tarnished Twenty- The FindLaw Sports Law Blog

NY Lawsuit: Fantasy Sports Gambling 'Exploits the Financially Desperate'

New York recently passed a law allowing fantasy sports gaming to continue. This new law is now facing a legal challenge by an anti-gambling group.

Last November, NY Attorney General Schneiderman issued an opinion stating that sites like FanDuel and DraftKings were violating the state's gambling laws. Shortly after the sites stopped operating in NY, the state legislature passed a bill that removed fantasy sports gaming from the state's definition of gambling. The bill characterizes fantasy sports gaming as a game of skill rather than chance, and lays the framework for the state to regulate and tax the big money fantasy sports industry.

Anti-Gambling Group Sues

The New York legislature has determined the act of selecting a fantasy team and competing against other fantasy players is a skills contest. Under New York law, a skills contest is not considered gambling.

The challenge to the new law, being brought by the national group Stop Predatory Gambling and four New Yorkers, will fight this concept and seek to call fantasy sports gambling when they are played for real money.

According to the attorney who brought the suit, "The plaintiffs seek to protect the public from predatory gambling consistent with the constitution. They also intend to stop FanDuel, DraftKings and other internet gambling operators form exploiting the financially desperate and the addicted in New York."

Is It Gambling to Play Fantasy Sports?

Fantasy sports require players to select individual athletes on various professional sporting teams to assemble their "fantasy" team. Each users can select their favorite, or the best, players from every team in the league. Then, users are paired up and compete based upon whose players score the most points each week in real life.

Certain actions in each sport can gain a user's team fantasy points. For instance, when a defensive football player sacks the offense's quarterback in the big game on Monday night, the user receives fantasy points for that action. Prior to sites like DraftKings or FanDuel, fantasy sports were typically not played for money, though groups have been making personal bets and creating pools among themselves since the first leagues were created.

How Do Fantasy Sports Differ From Regular Sports Gambling?

In traditional sports gambling, which is illegal in New York, a better places a bet on the outcome of a particular sports contest. If they are correct in selecting the winner, they win the bet.

In fantasy sports, two fantasy teams are matched against each other, then depending on how each fantasy team performs, which includes how each individual player for the team performs in real life, points are assigned, and whichever team scores the most fantasy points wins.

Based on how fantasy sports work, the rationale that fantasy sports gaming is a skills contest rather than a game of chance seems fairly illogical. Then again, laws related to online gambling are already fairly illogical and inconsistent.

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